"Companies don’t compete against other companies. Networks compete against networks." - Competing in a Flat World
I'm often asked, "what is a network orchestrator?". It is not a concept that I created from thin air. As the network orchestrator of a global business solutions firm, one of my primary goals is to help our clients understand that network orchestration goes beyond connecting people at a business function.
One of the best explanations of a network orchestration is presented by Dr. Victor K. Fung, Dr. William K. Fung and Yoram (Jerry) Wind in their book, Competing in a Flat World. In the book, they examine the role of the network orchestrator related to focus, management and value creation. The network orchestrator focuses on the following in comparison to traditional methods:
1. The complete network in the firm vs. the firm. 2. Empowerment of the components of the network vs. rigid controls. 3. Creating value through integration vs. the command and control method.
At S4X, we do not own manufacturing plants. We do not own distribution centers. We are not investment bankers. We are not a law firm. Although we have a location in Indiana, we are not an Indiana Life Science company.
We create solutions for our clients utilizing a global virtual business network. We orchestrate the formation or a specific network for a given client situation. The result is a flexible solution which can be short-term or long-term. All the components of the solution work to create a true client centric solution because we focus on the client situation versus the individual needs of the components.
Think of S4X as the guest conductor for an all-star jazz band at an international jazz festival. We work to bring the various talented musicians to create a beautiful melody for the audience.
It takes more than one link to create a chain. In a similar fashion, the supply chain of a company involves several links to be complete.
As a business consulting firm, we are currently involved with the creation of a supply chain management company. When I say supply chain, I'm describing a business focused on warehousing, fulfillment, logistics, transportation and the underlying technology. Going through the process of educating myself about this industry has given me a deeper respect for the connection points necessary to make a business run.
Most companies tend to think that the most important supply chain is the one which helps achieve a client interaction. What about the supply chain that helps a company function. Have you ever though about what it takes to get that pen you are using to your office and into your hand? Here's a clue: it doesn't just magically appear at Staples. Whether you are an Indiana life science company or a marketing firm from South Africa.
What does your internal supply chain look like? Do you manage it the same as your client-facing supply chain?
The time for complaining about the economy is over. Whether you are a start-up dealing with business formation issues or a existing company looking for ways to grow your business, it's time to walk through the door.
Business owners need to take a step back from the noise and review the landscape. Broadly speaking, business are failing and people are losing jobs. Upon further review, some businesses are failing due to bad management or lack of investing in their infrastructure during the good times. If your organization is looking to survive or grow, you may want to explore strategies outside of working with banks or grants for funding sources to assist with growth.
For example, one of our clients, a start-up, is working on closing their first round of funding. They will use the funding to begin production of their product. In concert with the funding round, they have secured LOIs (Letters of Intent) and other agreements which will generate revenue in their first year. As a potential solution, we have been approached by and are in talks with several marketing firms which can make the investment. The marketing firm would be the strategic partner and investor. The revenues of both companies are projected to benefit from this partnership.
Although we are a business consulting firm based in Indianapolis, we are observing the success of alternative business models from Seattle to South Africa.
Have you been successful with strategic partners investing in your business?
During the last four days, we have been working on four new private equity projects. Yes, deals are still being done. These projects range from $7 to $100 million. The industries represented by these projects are information technology, commodities, life science and hospitality.
The point I am trying to make is that despite the gloom and doom in the news, many companies are still moving forward and growing revenue. From emerging markets to a virtual business, we are assisting our clients through the private equity process. Even in the hospitality sector where the demographic trends suggest many negatives, our clients are selecting opportunities to position themselves to benefit down the road.
By understanding that private equity has not gone away, many small and middle market firms have an opportunity to capitalize on the crisis. Our strategic partner, David Castor, spells out some of the nuances in his blog series on private equity.
We enjoy working with our clients on these types of projects. Not only does the revenue increase but jobs are retained. That is really exciting.
Is your company looking for opportunities for growth? Contact us to learn more about finding your equation for growth.
It is often said that your reputation is defined by your community and the company you keep.
As
a global business consulting firm, we are fortunate to work with a
phenomenal community consisting our clients and partners. Although the
confidential nature of our relationships prevents me from mentioning
our entire community, I want to mention a few companies that have made
2008 a great year for our team.
Our relationships with our virtual business partners including the entrepreneurial business law firm, Alerding Castor, and the creative business blogging firm, Compendium Blogware, have helped us to expand our platform of services and geographic reach. Most recently, we have expanded our reach to Africa.
We look forward to continuing our relationships in 2009.
What do you want your equation to look like for 2009?
I've been reading a few new books lately. While reviewing my notes from Thirteen Days by Robert F. Kennedy, I was reminded of the lessons that can and should be learned from alternate sources.
In the book, a quote from Basil Liddell Hart is mentioned with regard to proper negotiations.
"Keep strong, if possible. In any case, keep cool. Have unlimited patience. Never corner an opponent and always assist him to save face. Put yourself in his shoes--so as to see things through his eyes. Avoid self-righteousness like the devil--nothing is so self-blinding."
Although this quote refers to military-related negotiations, the lessons are transferable to other industry settings. For example, one of our current projects for a client includes business formation activities and negotiating licensing agreements for their patented product. In order to complete these agreements, we must follow some of the lessons from Mr. Hart's quote.
In another situation, we have been retained to consult on an equity raise for an Indiana life science company. During the raise, we have to always consider the situation through the eyes of our investors.
As a global knowledge management firm, we also encounter the complexities of international negotiations which include the need to understand the cultural differences. This is especially true while working in emerging markets.
What lessons have you learned from your negotiations?
The temperature outside has dropped 30 degrees in the last 24 hours here in Indianapolis. With the frigid temperatures and strong winds, a strategy from staying warm has to be implemented. One of the key strategies is to dress in layers rather than wearing one big coat.
In business, we are all experiencing a change in the weather. If we try to use a one-size-fits-all solution, we may not be able to weather the storm. We prefer to advise our clients on incremental solutions similar to wearing layers of clothing to protect yourself from the cold weather. You've heard about the principles of Kaizen and Six Sigma. For those that don't know, Kaizen focuses on ocuses on continuous improvement. Six Sigma focuses on improving processes and eliminating defects.
As a business consulting firm, we help our clients (including virtual business clients) to implement the components of these principles that work for their given industry. From a law firm to an Indiana life science company, we partner with our clients to develop incremental solutions which can help to provide stability in a time of "quick fixes".
When the winter temperatures hit our area, we prefer to use layers and dress for long-term warmth. What does your winter clothing look like?
In our role as a business consulting and knowledge management firm, we assist our clients in several areas including business formation. I'm excited to tell you that we have been working on the creating a new business of our own.
We are finalizing the formation of a specialized division focused on emerging markets in South Africa, Zimbabwe and Southern Africa. We expect to finalize by the end of the year. Due to this expansion, we are welcoming a new member to the S4X family. Brighton Dube will be our Senior Managing Director for Southern Africa Strategic Initiatives.
I'll keep you posted on what the equation for the division looks like. Is Africa in your equation?
Making a virtual company work takes careful planning. The major components are relatively simple. Those being attorneys, accountants, C-Level executives and understanding your product.
What if you are an Indiana life science company looking to working with a South Africa life science company? Not only due you have cultural issues, you will also have different regulatory issues to manage. Additionally, how will you ensure the communications are seamless and real-time?
With regard to the communications, we are working with a client to utilize the online social networking infrastructure in a business social networking environment. The goal is to create a collaborative culture and decrease communication cost.
For the regulatory component, our client and partner, Safis Solutions provides excellent advice for ensuring compliance. Gretchen Bowker, Director of Regulatory Affairs and Compliance Services has a great article relating to virtual companies in the October 2008 Safis Solutions Newsletter.
How do you manage the components of your virtual business?
In recent BusinessWeek article titled Why Clean Tech Is Taking Biotech's Shine, the author makes an observation on the linkages between the life science and clean tech industries and the entrepreneurs in each. Although I don’t agree with the complete analysis, I understand the similarities.
The article made me think about the linkages we see from a business consulting perspective everyday. In addition to the common skill sets of our clients. We look to other industries such as the hospitality industry for examples of best practices or transferable linkages. For example, an Indiana life science company’s sales team could learn from a team that serves them while dining at a fine dining establishment such as Moe’s Steakhouse. From touch points to playing a particular role for the particular client, there are many lessons to be learned.
On a more technical level, professional services firms such as a solo practice law firms can learn many lessons from a start-up IT firm. Consider business development. A start-up IT firm will use guerrilla marketing including blogging to make things happen. Forget the yellow pages. The solo practice firm could be successful by using just this aspect of the IT ecology.
Whether you are hiring new people or growing your current market share, you can learn from the indirect linkages you have with other industries. Have you checked out your indirect peer group lately?
During a recent lunch meeting, I met with a couple of partners in private banking. Our conversation centered on helping their clients beyond the private banking services. I mentioned executive office suites. To my surprise they did not know about the concept and business model. I though I would share a little of the information I shared with my partners.
Occupancy costs are an important factor when determining the location of your business. Executive office suites offer a solid alternative to leasing space in a typical office building. In this model, a company leases on a short-term basis (typically 6-12 months) an office space which includes shared administrative services, conference and break rooms and additional services depending on the situation. An example of a executive office suite company is Regus.
We recommend executive office suites to our virtual business, emerging markets and workingarket clients. For those in the start-up or business formation phase, the executive office or virtual office is a good way to establish a business presence.
For our part, we are working with the folks at Regus to establish our offices in South Africa and Dubai. I'll let you know how the process works out for us.
Do you really need all the office space you are leasing? You might want to check again.
Over the past few weeks, my friend Dave Castor of Alerding & Castor and I have discussed the virtues of strategic alliances. In my opinion, one of the major reasons for success or failure is lack of real communication.
An good example is the BioCrossroadsLINX collaboration between Indiana and San Diego. Spearheaded by BioCrossroads, this project is focused on the Indiana Life Sciences industry. The collaboration allows for both sides to benefit while maintaining there strategic advantages. Through multiple meetings and open dialogue on the proper strategic implementation, this alliance works.
Open communication is only one part of the deal. I watched this quick video from the folks at The Deal.com this morning that helps with the other key business issues.
A global market requires terms that are more representative of its realities. A description based on geography is like comparing apples to oranges. Whether your organization is located in London, South Africa or Dubai, the landscape of your industry should be described by how you interact with complimentary and competitive organizations.
In the New York Times yesterday, the article titled,"Cost-Cutting in New York, but a Boom in India", mentions the terms "knowledge process outsourcing" and "off-shoring". While these are standard terms, do they actually describe the nature of the relationship and the interaction. Why not keep it simple and say our "research department" or "customer service department". Global organizations already operate under a virtual business model. If you have more than one location, you are operating virtually in some form. As a result, I think there is not a need to add the geographic description.
As demographic trends continue to evolve, business solutions from diverse global locations will increase. Have you explored global partnerships? If not, why haven't you?
Ideas + Experience = Companies (Yes, money is a part of this equation but not in the context of this post)
Last week, I attended Innovention 2008, the annual Indiana Life Science industry event hosted by the Indiana Health Industry Forum.
Two of the panel discussions during the event had divergent comments with regard to the state of the life science industry in Indiana. One panel suggested multiple technologies with high commercialization potential exist in Indiana but there is a lack of experienced individuals to capitalize on the potential. On the other panel, the comments indicated that the experience can be pulled together via a virtual business model. In the former, the glass is half empty. In the latter, the glass is half full.
I agree with the latter opinion. We are working with our clients and network to license some of the technologies and capitalize on the potential. If you are a budding entrepreneur looking for a business formation opportunity, this model may work for you. If you are an established organization, this model may create services or products for increased business development.
There are those groups of people in Indiana that continue to think the Indiana Life Science initiatives are still a fad or gimmick. Unfortunately, these are the same people that will be left behind the economic train as Indiana continues to diversify its economy. I'm not saying the Life Science Industry is the only industry in Indiana. There are several other key industries including Information Technology, Logistics and Advanced Manufacturing.
Governor Mitch Daniels, Governor, State of Indiana
Nate Feltman, Commerce Secretary, State of Indiana
Mary Walshok, University of California - San Diego
John Diekman, Founder and Managing Partner, 5AM Ventures
President France Cordova, President, Purdue University
President Michael McRobbie, President, Indiana University
This collection of speakers could spend their time at any number of events. Yet, they find it important to attend this one which is focused on Indiana Life Sciences.
If you are looking to increase your business development activity, you may want to explore potential opportunities in the Life Science Industry to stay ahead of the curve and your competitors.
When most people think of ecology, the thought of the natural environment, green-friendly and reducing carbon dioxide usually comes to mind. Being an ecologist in your business environment, you focus on several of the same principles as an ecologist dealing with nature. A balance of good ideas, good management, access to capital and an understanding of the capabilities of the people involved. From idea generation to business development activities, the ecologist of the business environment must pay close attention to how all of these components interact. Additionally the business ecologist must keep the environment in a state of balance in order to achieve the goals of the system.
In a recent article in the Indianapolis Business Journal, the Indiana Life Science environment is on display. The article describes a new venture, NICO Corp., a early-stage company in the Indiana Life Science environment. Several business ecologists are a part of the environment of this new venture including David Johnson, CEO of the BioCrossroads initiative; Jim Pearson President and CEO or NICO Corp; and NICO’s attorney, Ice Miller partner Harry Gonso. These ecologists and several others help to grow companies like NICO Corp. and move the Indiana Life Science environment toward "a self-sustaining life sciences sector" according to Mr. Johnson.
On a global level, the emerging markets in the South Africa Life Science environment are being cultivated by its business ecologists including CSIR. The Council for Scientific and Industrial Research (CSIR) in South Africa is one of the leading scientific and technology research, development and implementation organizations in Africa. It undertakes directed research and development for socio-economic growth. "Harnessing biosciences for a healthier and wealthier South Africa", this goal of CSIR represents the many facets of an ecologist including how your business environment interacts with other non-business environments.
Two similar sets of ecologists and environments that are miles apart ultimately have the same goal.
What are you doing to keep your business environment in balance? Take the time to become an active business ecologist. You may find greater opportunities to help foster a more balanced and sustained environment.
You never know what will happen when you connect a client, business partner or friend to something you think they may find helpful. Social networks can connect people in unexpected ways...
A few months ago, I sent an email to my clients and my personal network. The email included a link to a YouTube clip for the trailer for Two Million Minutes, a documentary on global education.
One of my clients from Indiana sent me a surprising reply. She mentioned that she had a passion for global education on a local level. This particular client is in the Indiana Life Science industry and does not have activites in the edcuation sector at the present time. From this reply, my client and I have had further discussions on global education and other opportunities to work together beyond our current endeavors.
If you haven't seen the movie, check it out or read the blog from Executive Producer, Robert Compton at http://www.2mm.typepad.com/. It may start a dialogue with a client or friend which could lead to potential collaborations. The current state of education is something for which everyone has an opinion.
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"Companies don’t compete against other companies. Networks compete against networks." - Competing in a Flat World
It takes more than one link to create a chain. In a similar fashion, the supply chain of a company involves several links to be complete.
During the last four days, we have been working on four new private equity projects. Yes, deals are still being done. These projects range from $7 to $100 million. The industries represented by these projects are information technology, commodities, life science and hospitality.
It is often said that your reputation is defined by your community and the company you keep.
A global market requires terms that are more representative of its realities. A description based on geography is like comparing apples to oranges. Whether your organization is located in London, South Africa or Dubai, the landscape of your industry should be described by how you interact with complimentary and competitive organizations.
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