Let's talk Strategy

I love Business strategy. One of the fundamental moves I always enjoy is to force my competitors to drain their resources while I spend sparingly. The United States lost that game in Vietnam, and seems to be losing it again. As a result of an expenditure of a few $'00,000 to fly planes into the World Trade Center and Pentagon, the US has spent approaching $300 Million in Afghanistan, and much more in Iraq. That is not to speak of the lives lost, and disabilities suffered (at a rate of almost ten for each death). I wonder how we keep on failing over many years to learn that basic strategic effectiveness is not dependent on spending levels.

Has LinkedIn peaked already?

Few businesses last very long these days. In the Online Social Networking space a number have been and gone - Tribe, Friendster, Ryze, were all strong for a period of time. AOL, with AIM pages, missed the opportunity. Orkut waited too long. Bebo became a geographically limited one, as are so many of the foreign language ones. At the start of the year, MySpace and LinkedIn seemed unassailable, with FaceBook in a very secure niche.

Now, increasingly, in a world where change is critical, LinkedIn seems static, and even boring,while FaceBook has acquired more adult users and allows them to have a window into the life of the people to whom they link. The acceptance of third party Widgets is allowing them to avoid the mistakes which others have made. No one company can develop all the cool widgets which people want, so by opening up the environment, it can ensure that it always stays at the leading edge.

It may not last, but FaceBook has the best strategy for now.

People think they are more ethical than they are

Research at Harvard Business School has found that people predict that they will behave more ethically than they so, and that they look back on past behavior and think of it as more ethical than it was.

This is an important lesson for companies which want to make sure that they behave ethically. The detailed rules of behavior have to be laid out, not just a pious intent.

Is the CFO missing the valuation of the company?

An article in today's New York Times pointed out that there is nothing immutable about the way a company values its assets. Even today many will recognize that it misses intellectual property such as technology and brand value.

Are most companies unethical?

It is typical these days for many companies to delay payment of invoices to smaller suppliers as long as they they can. They do this thinking it is simply being clever. However, a few years ago many companies thought that backdating stock options was being clever. Others thought that null trades, where nothing really changed hands, but revenue was booked in both directions, was exceptionally clever. So how clever is it to avoid paying legitimate debts until you have gone past agreed terms?

One of the Principles of Mars, Inc., a company which is a passionate believer in ethics, is prompt payment of suppliers. In fact, it is also good business since other companies want to do business with such a company. Therefore, the manager who initiates a policy of slow payment is not only acting unethically, but is doing his or her company a disservice.

Why are the people who know the least, the least likely to ask?

As someone who has spend all his career moving between line management and consulting, I have seen again and again, that the really capable individuals have the self confidence to admit when they do not know something. This means that they will ask for help and learn. No one knows what they do not know, but the smart people will recognize that there is a lot which they do not, and will check to find out. As both a participant and an observer, I have become fairly good at predicting which managers will fail, and which will succeed, simply based on their attitude to learning.