Win every part of it

2022-07-28 0 By

In a changing business environment, resisting change is the most dangerous thing a company can do.Innovation, streamlining, flexibility, team professionalism, and CEO quality are the key factors for enterprises to achieve change and optimization.We let the historical numbers speak for themselves when it comes to the leaps and bounds of technological innovation over the past 50 years, and the message behind them is sobering.The development of the field of science and technology presents a typical “black Swan effect”. The subversive “black Swan effect” event changes the environment of enterprise development with an unimaginable impact.Since the world’s first personal computer came out in 1975, a giant “black swan” has appeared almost every 10 years, causing huge impact on the industry and even causing reshuffle: the birth of the router in 1985, the birth of the Internet in 1995, the birth of the smart phone in 2005, some enterprise giants have died out, and some industries have risen rapidly.Here’s a look at the 30 stocks that made up the Dow Over the past 60 years. In 1960, the top names on the list included Union Chemical, Alcoa, American Can, International Paper, Eastman Kodak, and so on.Today, only four companies — General Electric, DuPont, United Technologies and Procter & Gamble — still make up 13 percent.If you look at the Fortune 1000 over the past 50 years, the changes have occurred almost every decade, and at an increasing rate: from 1973 to 1983, 35 percent were new companies;Between 1983 and 1993, the figure was 45 per cent;Between 1993 and 2003, 60% were newcomers;Between 2003 and 2013, more than 70% of companies were new to the list.With the rapid development of technology, every entrepreneur faces unprecedented challenges. The most dangerous thing to do to stay invincible is to refuse to change.Fortunately, there are both risks and opportunities. Once we are determined to carry out reform, the reform rate may develop in a J-shaped curve. The growth rate will gradually increase over time, and gradually transition from cost optimization, performance optimization and efficiency optimization to reform optimization.Business development and change may be explained by a few basic laws of physics: the more friction there is, the harder it is to grow.Newton’s first law tells us that a body in motion has a tendency to stay in motion, and a body at rest has a tendency to stay at rest unless it is forced to change this state by an force from another body.Human nature is averse to change and tends to rely on past experience to subconsciously resist what one is not comfortable with.However, the pursuit of innovation and change requires restraint of these inherent weaknesses. It requires every entrepreneur to encourage a corporate risk culture, motivate employees to have the courage to fast trial and error, abandon stagnant work processes, gradually build decentralized teams, and be good at empowering bottom-up innovation.Start lean, stay lean.Newton’s second law, “resultant force = mass × acceleration,” tells us that scale is often the enemy of growth and innovation, and that small and beautiful are often the path to development.In the process of enterprise development, always keep a light body.A good entrepreneur must always be alert to the pitfalls of scale.Early signs of preventable corporate redundancy include an emphasis on physical conditions and facilities, form over content, management bloat and an emphasis on the unquantifiable rather than the quantifiable.Entrepreneurs always need to focus on the metrics that really matter — customers, order books, revenue, gross margins, churn, profitability, cash flow — and let the real numbers speak for themselves.Develop under pressure.The ideal gas law says that there is always a balance between pressure, volume, and temperature.This is just like the optimal balance between capital cost, growth speed limit, market size and unit benefit in the rapid development of an enterprise.In the development of enterprises, we must maintain the focus on phased products and fields, and do not blindly expand.Take advantage of flexibility.Inspired by the law of mechanical leverage, startups need to be good at seizing opportunities, taking advantage of opportunities and dancing with elephants.A big company, it’s likely to think that its main competitors are other big companies.But that’s not always the case. With leverage, startups can be smaller, and they can be real competitors to bigger companies.The “5S advantage” for startups is stark: Stealth, Speed, Smarts, Svelteness, and Simplicity.Such flexibility is not to be sniffed at, and has great potential to disrupt industry giants.Reduce “disorderly increase”.The principle of increasing entropy is that entropy (disorder index) increases over time.Take Google for example. The products of its employees’ “disorganized time” include GMAIL, NEWS, Google NOW and other excellent products.Another example of increasing disorder is that with the rapid popularization of new media such as wechat and Weibo, the disorder of information transmission is becoming more and more obvious, and the whole media ecology is also developing rapidly towards social media.In this case, any positive or negative news of an enterprise will reach exponential diffusion speed under social media.The interaction between enterprises and customers is becoming more and more close, especially for enterprises facing the mass consumer groups, customers decide the success or failure of the enterprise brand.Therefore, every enterprise needs to constantly cultivate new perspectives in the social media environment. The functions of sales, public relations, customer service, business development and other functions need to integrate social marketing to help enterprises improve their own popularity and reputation, and expand industrial influence.What is the most important factor in the success of a business?In addition to Entrepreneurship, which has been one of the most frequently used words in the national media over the past few days, we also need to Professionalism.There are many reasons why a large number of startups fail to grow into the great companies they were supposed to be, but perhaps the biggest is the lack of strong execution and team culture.So, how to build strong execution and excellent team culture?Emphasis on professionalism is one of the keys.Professionalism covers many things, some of them in detail.For example, when I went to work on Wall Street after my master’s degree in 1992, my friends told me that as an expert on Wall Street, the first thing I had to do was change my clothes. The clothes I wore as a Yale student were no longer appropriate. The standard dress for investment banks was a white shirt, tie and dark suit with cuff links.But in fact, the appearance of things is not the most important, more important is professional behavior.Professional knowledge and ability: It is necessary to be an expert in your industry, but for a person who aspires to be a manager or leader, knowledge should be multifaceted.That’s why I need to take courses like EMBA and FMBA today, because they provide a learning and communication platform for comprehensively understanding enterprise management and improving leadership.Team spirit: We need to build trust, respect and consideration among teams.Consideration is a very important word, although it comes last.When your colleague fails to live up to expectations for one reason or another, give him some understanding, respect and encouragement so that he can make up for what he has fallen behind.Values: We often talk about positive energy today. What is your attitude towards customers and partners?How do you feel about your friends and family?Being nice to your family, being nice to your colleagues is also a very important part of our values.If you over-market or cheat your customers, you may achieve some of your goals in the short term, but in the end it will hurt your company and yourself.Responsibility: everyone is engaged in their own work, including every small work, have the responsibility of completing the task best.Ability to solve problems: many problems in the business society are much more complex than those in books, so we must come up with creative ways to solve problems, because there is no ready answer, which also tests one’s professional ability.You need to be able to solve problems creatively, and this process is often done under great time pressure, which is often the case in the business world.If an enterprise wants to achieve good development, it has high requirements on the quality of the CEO, who needs to set strategy, focus on products, lead a team and make good accounts.Attach importance to strategic choice.As a CEO, you need to be mentally prepared and technically ready on day one.Think, if the giant enters this industry, how should the enterprise respond?There is the question of strategic choice.The Internet industry is fundamentally different today than it was in 1999.Today, big companies like BAT, and Xiaomi have covered a significant portion of the market opportunity.But let’s not complain, this is not a monopoly, is the business development of every industry must go through the process.Isn’t the same with traditional industries?Now to do mineral water, do brand home appliances business, the success rate is quite small, this is not a determination or how much money, but in the existing pattern, the opportunity is really less.But is there a chance for new products and business models in the Internet industry?There must be.A few years ago, we thought China’s Internet news landscape was basically set, but Toutiao has done a very good job in recent years.When we went to learn about Toutiao, we did what VCS do most often — compare competing products.There were A lot of big companies doing similar things, so we didn’t do A Series A investment.We were wrong. Fortunately, we realized the technical advantage of their product and added the next round.Another example was in 2008, when JINGdong was faced with a huge e-commerce platform in the market, Liu Qiangdong chose to run his own e-commerce business.At the time, no company, including offline retailers, had really managed to do supply chain, warehousing and distribution all right, but his unusual strategic choice proved to be the right one.Deeply involved in the product.You don’t need technical or programming expertise to do a good user experience, but you do need to care about the product and the user experience.The CEO is also the product manager and the team is responsible for execution, but the CEO should be deeply involved and involved to help the team polish the has built its own logistics to ensure delivery within a relatively accurate time frame, delivering goods within 24 hours in hundreds of cities.You may also remember photos of Liu delivering the goods himself, which shows that they are sending a clear message — deliver on time.Train young people in advance.The failure rate of parachuted executives is not low.Growth companies are at war every day, and the war is changing so fast that suddenly a senior executive of a large company comes along. Can he adapt quickly?Not necessarily.I tend to look for younger people who may not have that much experience, not necessarily from a top MBA or investment banking or consulting, but with ideas and a good business sense that fits in with the core innovation of the team and allows them to grow with the company.How do you train them?Actual combat is the best training.You put a promising young man in the field and he will progress much faster than he would in a programmed job in a big company.If you have a company years from now where the original founding executives are doing all the big roles and the young people don’t have a chance to grow up, I’m afraid there’s a problem.Focus on data analysis.There is one department in a startup that is often overlooked: finance.This is a cognitive bias.But money is a lifeline, and without financing, no amount of corporate ambition can be achieved.A good finance department is an important sounding board for a company’s business.In America’s top 500 companies, cfos take over from retiring ceos.The CFO helps the CEO see the health of the business and figure out the company’s future strategy.Of course, if the CEO is a person who can calculate accounts, he can’t make decisions.I think there are at least two numbers that most companies have to focus on: the first number is gross margin.This determines whether a company has real bargaining power or pricing power, and is a number that the CEO needs to pay attention to and be sensitive to.The second number is unit economy.For example, what is the combined revenue of Internet OTAs (online travel agents) per customer?These include the cost of acquiring customers in the first place;Secondly, conversion rate and turnover rate;Finally, there are operating costs associated with serving customers.To calculate comprehensive income, we should analyze each link in detail, such as how to reduce acquisition cost, improve user experience to improve conversion rate, and use technical means to reduce operating cost, etc., all of which need to be quantified.* This article was originally published in Manager magazine