Platt Perspective on Business and Technology

Some thoughts concerning a general theory of business 16: considering first steps toward developing a general theory of business 8

This is my 16th installment to a series on general theories of business, and on what general theory means as a matter of underlying principle and in this specific context (see Reexamining the Fundamentals directory, Section VI for Parts 1-15.)

I began this series with a discussion of general theories and what they consist of, as a matter of general organizing principle (see Parts 1-8.) And after laying a foundation in that, for focusing in on a general theory of business as a special case, I began addressing the more specific intended topic of this series as laid out in its title. And I have focused essentially entirely since then on the organizational level of the business as a whole, first treating these entities as if they were essentially monolithic in nature, and then opening the box a little to consider their functional and organizational structure too – at least at the level of granularity that would appear on a standard table of organization. But even there, my focus was on how they fit together and functioned together in collectively comprising the business organization as a whole.

As a matter of organizing this series and its narrative if nothing else, I have chosen to address this fundamentally single business level of conceptual organization as a baseline that I would organize the series as a whole around. And then in the course of writing Part 15, I stated that I would turn from that to:

1. Consider the basic issues raised and considered in this series, from the perspective of the individual business stakeholders.
2. And then I will expand the scale of consideration outward from that of the single complete business enterprise to consider supply chain and related value chain systems and I add, business and marketplace ecosystems.

I will, of course recurringly return to reconsider the baseline middle ground organizational level of the individual business organization, and both when focusing in on the individual and when telescoping out to consider the larger business and economic contexts, that businesses reside in and function in. But I offer this as a brief anticipatory outline of what is to follow.

I begin all of this with Point 1, as restated and reorganized from Part 15, above. And I begin that by at least briefly connecting what I will offer here, to a progression of series and individual postings that I have been offering in this blog as my Guide to Effective Job Search and Career Development (see its Page 1, Page 2 and Page 3 listings.)

My goal for that Guide is to offer what experience and insight that I can, on finding and securing jobs and working successfully in them, and both at the individual job and career step level and in an explicit career and overall career development context. I have worked with a fairly wide range of businesses and in a variety of industries and in a fairly wide range of types of positions, and I have actively sought out opportunity to learn from others in this. As such, I probably have seen first-hand and directly experienced a wider range of job and career possibilities than most. But I am still just a single individual and offer what I can there, as filtered through the biases and assumptions of my own experience. As such, I still offer a limited perspective there, and even if a relatively comprehensive one with over 550 short essays included in it as of this writing. But there are a few fundamental points of observation and experience that underlie all of that, that I would start from here as essentially axiomatic assumptions, going into this general theory discussion:

• Even when we work for a single employer as an in-house employee and throughout our work life, we should still think of ourselves as if we were consultants, who might find ourselves having to work with a next employer and a next consulting client as developing and emerging circumstances dictate. No job or job opportunity can safely be presumed to last forever, as a tacit and unconsidered assumption.
• An employing business and its underlying assumptions and sense of self-interest are separate and distinct from those of our own. And while our employment with such an enterprise might seem long-term and even open-ended, we can never assume that as an absolute given. Business employer, and personal employee needs and interests can come to differ and diverge and change, and even disruptive change in employment options and possibilities can arise.
• So always think of yourself at least in part as an independent consultant, even if you are working in-house and long-term with one “client” employer. And always think of yourself at least in part as an independent small business, and with your own needs: short-term and immediate, and long-term firmly and clearly in mind.

This is important, and I add this is a point of observation and of conclusion that underlies how I address Point 1 of the above list. Any general theory of business that seeks to address the organizational level of the individual needs to address this type of consideration, and both for those who are entrepreneurial (i.e. who take this approach) and for those who simply see themselves as someone else’s employee.

And with this in place, I offer here, an at least preliminary to-address list of Point 1 oriented issues and perspectives that I will delve into in this series as I consider its level of organization:

• From the perspective of the individual employee, whether hands-on and non-managerial or managerial, or executive or owner, and with consideration of a still wider range of stakeholder types as well.
• From the perspective of how each of these groups of stakeholders see themselves and other stakeholder types, and in both risk and benefits, risk management terms and in game theory terms,
• And according to how the members of these groups see themselves as strictly in-house employees with their leaving their longer-term planning in the hands of their employers, or as more independent entrepreneurs and consultants who take direct ownership over and responsibility for their own work and career planning and its execution.

I am going to begin addressing these points and their issues in my next installment to this series, with a discussion grounding scenario that begins with the individual career developer and the hiring and promotion-directed strategies that they follow, and ends with the approaches that those same individuals follow when actually working at a business. And as part of that, I will also consider the strategies and the tactics of others who work with them or who otherwise become stakeholders to these transaction flows (games.) My goal there will be to ground a perhaps more abstract line of discussion in more real world jobs and careers terms, and with a more familiar experience-based foundation point that I will be able to refer back to while discussing Point 1 issues in general.

And I will discuss all of this from the perspective of:

• The individual as they work and plan and carry out their careers, and
• From the business process and execution side as individuals work to achieve goals and priorities and stretch goals and their priorities, in meeting business needs.

And as my goal here is to offer a general theory of business that would offer value in an emerging 21st century, and not just serve as a retrospective on the 20th century, I will of necessity also address:

• The issues of globalization here, where outsourcing is just one piece to that puzzle,
• And workplace automation, where a combination of artificial intelligence and robotization are reshaping what employment and even employability mean.

I am going to begin all of this in my next series installment, with the above-cited grounding scenario and will proceed from there to address in turn the rest of the issues noted here. Meanwhile, you can find this and related material about what I am attempting to do here at About this Blog and at Blogs and Marketing. And I include this series in my Reexamining the Fundamentals directory, as topics section VI there, where I offer related material regarding theory-based systems. And I also include this individual participant oriented subseries of this overall theory of business series in Page 3 of my Guide to Effective Job Search and Career Development, as a sequence of supplemental postings there.

Technology as the tide that raises all boats 9 – but often unevenly 6

This is my 9th installment to a discussion that I initially began as a single stand-alone posting in April, 2012, but that needs reconsidering. I focused in that posting, on a key issue that enters into a determination of how and when change rises to a level of significance so as to qualify as true innovation (see Outsourcing and Globalization, postings 25 and loosely following for Parts 1-8, and Part 1 of that in particular as the foundational urtext for this narrative.)

I focused in Part 8 of this, on the pace and scale of change and of innovation, considering two related but nevertheless categorically distinct arenas where innovation can take place:

1. Innovation within the business and in how it is structured and organized and in how it functions, operationally, and
2. Innovation in what that business brings to market as products and services offered.

My primary area of focus there was a continued discussion of the relative potential pace of change and of innovative change in particular and in both of these contexts. Then at the end of Part 8, I said that I would continue from it here, with explicit consideration of:

• Globalization and the scale of the marketplace, and its capacity to create and support progressively finer-scale niche markets even as it drives global conformity too, and
• The realities of the technology diffusion and acceptance curve, and of push-back pressures from the marketplace as they would serve to limit and shape the pace of accelerating innovation acceptance and of innovation occurrence as well, where technological factors alone might dictate faster and faster.

I begin this posting and its line of discussion with the first point and by acknowledging what should be obvious to essentially everyone, and everywhere now: a combination of ubiquitous, anywhere to anywhere communications and computer-supported connectivity and information sharing, has effectively limited the barriers that have traditionally divided us, and removed them entirely for many purposes.

• Since the advent of wireless telephony, and certainly since the advent of inexpensive, computationally powerful, readily available smart phones, globalization has meant all of us and everywhere at least significantly starting to come together as a single overall globally connected community.

China has its great firewall: its Golden Shield Project to try to limit and control the global conversation at least as far as it would include their own citizens. And at least some other nations actively seek to control their people, for their being able to join this conversation flow too. As an extreme case in point example of that, consider North Korea where all phone conversations are monitored, no average citizen has access to computers or the internet, and cell phones do not exist – except for a small and carefully monitored minority.

The more restricted the access to this globalization that the citizens of a country are, the more forcefully that country and its citizens are pushed into being de facto late and last adaptors to change taking place around them. The more openly connected a people are, the more visible and the more accessible the change taking place around them can be for them, and the more pressingly intrusive it can become too as new keeps rushing in to supplant current with next and with a still newer next after that. And this can serve to pressure people towards the faster adaptor end of the innovation acceptance diffusion curve.

I am going to return to that set of issues a bit later in this series. But let’s step back from it, at least for the moment to consider a key element to the first of the two topics bullet points offered above: scale in globalization. I wrote of two at least apparently conflicting drives in that bullet point that are emergent to globalization per se, and certainly in a ubiquitously connected context: its capacity to create and support progressively finer-scale niche markets and its drive to create global conformity too (as the dynamics behind the Pareto principle weed out perhaps many possible alternatives, leaving single “best” or at least most accepted alternatives predominating, and wherever change leads to possible diversity.)

When anyone and seemingly everyone who would potentially fit into and support a niche market can do so, it becomes possible to achieve a sufficient available consumer base for it, to make it feasible for businesses to produce and sell to it, in meeting its niche defined needs. And it becomes practical and feasible for businesses to actively pursue and meet the needs, and profitably so, for more finely, narrowly defined niche markets too. This in and of itself means support for diversity and for several and even many alternative product or service possibilities and all at once, each achieving real market success. But the forces behind that empirically observable diversity winnowing mechanism: the Pareto principle, keeps cutting back on at least widely available choice, at the same time with the emergence of market dominating winners too.

• Think of the balance of diversity and its supportive pressures, and of conformity in the form of Pareto principle winners,
• As representing the creative destruction dynamic, that is sometimes offered as a working definition of disruptive change per se. Old is swept away by change, and so are many and even most emerging change options too. And it is not always going to be apparent, and certainly not up-front, which particular new will thrive, or even which new possibilities will even survive as the flow of change advances.

And this brings me to the second of the above two topics bullet points, which I have in fact already begun to address when discussing and analyzing the issues of the first of them:

• The realities of the technology diffusion and acceptance curve, and the pressures of the marketplace that would limit and shape the pace of accelerating innovation acceptance and of innovation occurrence as well.

I am going to more fully discuss this and its implications in a next series installment. Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. I also include this in Outsourcing and Globalization – and see that directory for related material. And I include a link to this posting as a supplemental addition to Section VII: Reexamining Business School Fundamentals (reconsidered), of Reexamining the Fundamentals too.

Some thoughts concerning a general theory of business 15: considering first steps toward developing a general theory of business 7

Posted in blogs and marketing, reexamining the fundamentals by Timothy Platt on June 13, 2017

This is my 15th installment to a series on general theories of business, and on what general theory means as a matter of underlying principle and in this specific context (see Reexamining the Fundamentals directory, Section VI for Parts 1-14.)

I began addressing business strategy and operations from a game theory perspective in Part 12 and Part 13 and continued that in Part 14, successively examining win-win, win-lose and mixed strategies and how they arise as best perceived approaches in business contexts. And my primary focus there was at the level of the complete business enterprise, as a more monolithic entity that would follow a single, if mutable strategy and game theory approach. I have at least touched on how different areas of a single business can pursue differing game theory-based approaches to meet their specific needs, and in support of a single overarching business strategy. But I have mostly focused on businesses as a whole there.

1. I am going to more explicitly consider how different areas of a single business can pursue differing game theory approaches, and even in support of a single shared business mission and vision and a single overarching strategy and business plan. And I will at least begin doing so here in this installment.
2. After that I will consider the basic issues raised and considered in this series, from the perspective of the individual employee, whether hands-on and non-managerial or managerial, or executive or owner. I add here that a still wider range of stakeholders has to be considered here so I will throw a wider net when delving into this set of issues, than would be included within the boundaries of any one organization.
3. And then I will expand the scale of consideration outward from that of the single complete business enterprise to consider supply chain and related value chain systems and I add, business and marketplace ecosystems. If Point 1 here addresses a baseline middle ground level of consideration, Point 2 focuses in to a deeper, finer grained level that underlies it and this Point 3 telescopes outward to consider the wider context that Point 2 issues take place in.

But I begin this at the organizational level of functional areas and separate offices and related facilities within a single business entity as they might pursue different mixes in an overall mixed game strategy approach.

I begin this with the fundamentals, as initially laid out in a complete business-as-single-unit context in Part 14, where I repeated how and why a business would pursue a win-win approach, and why it would preferentially find greater value and reduced risk from pursuing a win-lose approach:

• Win-win makes the most sense, offering higher overall value and reduced risk, long term when a business, or in the context of this posting, a unit or functionally distinct element of that business, faces long-term stability, and with reciprocity for value offered where it is shared. I couched this in supply chain and similar business-to-business collaborative contexts in earlier series installments as listed above, and in terms of business-to-market and business-to-customer dealings where positive value shared and offered lead to increased business and increased revenue and profits generated.
• This same basic paradigmatic model applies essentially entirely as-is, within businesses too and certainly when a functional unit or area under consideration is viewed as working with other areas of their own overall business as if in a supply chain system with them, and when they are viewed as serving the needs of a marketplace, and even if that means in-house clients and customers.
• Win-lose on the other hand, applies and both for entire businesses and for functionally separable units of them, when they enter into value creating transactional processes with other areas of a business that would only be expected to continue for a limited duration,
• Or that would be carried out under conditions of greater perceived risk and uncertainty as to how value would be exchanged (where that, for example can mean either uncertainty as to payout, or limitations to the overall pool of value that could be paid out that would not necessarily cover all value owed),
• Or for some combination of these win-lose oriented strategy-shaping constraints.

Win-win would probably seem fairly obvious as an approach within a business, and certainly when the success of any given unit or functional element in an enterprise is tightly linked to the success of the business it is part of as a whole, and to the success of all other areas of that larger entity. Where would you expect to see a more win-lose game strategy apply here? I have in fact discussed businesses and business contexts where win-lose is the only approach that would make sense within a business, on a number of occasions in assembling this blog. And I begin addressing this general area of consideration by citing a few of those relevant contexts here, at least in general terms:

• Consider the perhaps all too familiar situation in which a business has at most a limited level of some critical resource that would have to be shared by multiple employees and even by multiple here-competing teams or other units within a business (e.g. a single very expensive and costly to maintain piece of equipment that has become a functional bottleneck for the business as a whole, but that it cannot readily afford to buy more copies of.) Now consider what happens when the various business units and their managers and staffs compete for access to this one crucial resource and with all involved facing very tight completion deadlines for their work that calls for it, and with intense pressures from higher up on the table of organization for everyone to meet their performance goals and on time if not before then.
• Even if the business as a whole seeks to pursue a more purely win-win approach with other collaborating businesses, circumstances that would be difficult to fully control can bring units within it into more win-lose competition. And there, one of the goals of the leadership of such an enterprise would be to limit this, and to find a way to resolve the resource bottlenecks in place in their systems that engender it.
• As a second, in effect intentionally staged example of within-business win-lose competition, I cite an approach to business leadership that I have seen play out. Some business owners and executive leaders intentionally create competitive conflict between the people and the teams of employees and managers that work for them. And this can literally take the form of assigning the same exact goals to more than one individual or team and under terms where everyone involved knows that the winner of these races will be rewarded and the losers punished. Yes, this is toxic; some managers are toxic in how they lead and manage and through setting up win-lose conflicts that are at best only mildly damaging and certainly to morale and to achieving employee buy-in.

I offer that last example for a variety of reasons. First of all, I do so because it does in fact represent a real world within-business win-lose scenario that I have seen play out and even in businesses that by all outward appearance seem to be quite successful. And when other workplace factors are added in that would influence stay or go decision making on the part of employees caught up in these conflicts, this type of competition might not in and of itself lead to a real increase in key employee turnover either. So I am not necessarily citing this as a reason for change management becoming necessary: I am simply citing it as a challenging workplace environment where win-lose competition can become relatively commonplace and certainly on high priority projects.

Beyond that, I also cite this to note a point that should be obvious but that is often overlooked in discussion of business and management practices and processes: a truly general theory of business should address bad and questionable processes and practices and as thoroughly as good and best ones, and how they related to each other and how they would be distinguished from each other.

I am going to continue this discussion and addressing those issues in a next series installment, where I will turn to consider the second numbered point of my above repeated to-address list, and the individual employee, manager, executive or owner and their issues.

In anticipation of that and as a closing comment to my perhaps toxic seeming second win-lose competition example from above, I briefly recount an in-house competition that I have seen and participated in, in a differently run business, which for purposes of this narrative, I identify as an up and coming high tech firm: Alweron Inc.

• Alweron took on a major project as the successful bidder in a competition held by a national government agency. And the initial project proposal that they offered did in fact fit entirely within their current technology and technical solutions comfort zone, which is why they were able to bid to complete at the cost and within the timeframe that they offered.
• Then, as sometimes happens and certainly in a cutting edge technology context, the lead project manager and their team assigned to this work, ran into a roadblock, where they came to realize that a key element of their solution could not be made to work, at least with what for them was their currently available off the shelf technology.
• They got creative and in effect held an in-house stretch-goals contest, coming out of a company-wide brainstorming session that all employees and managers could participate in, as they sought to arrive at a best approach for resolving this impasse. And three teams came together, each attempting to solve this problem with a different, novel innovative solution that they had initially sketched out in principle in that brainstorming session. The winner of this contest would be rewarded with extra vacation days that year and with a cash bonus, upon delivery of their working solution, and with the first to cross this finish line with a cost-effective problem resolution declared to be the winner. Early delivery, ahead of the designated and agreed to deadline for completion, would mean a larger bonus too, as this would help the business as a whole to complete the overall project ahead of schedule and achieve an early completion bonus from the agency that was paying for this project to be done in the first place.

This was as much a win-lose scenario situation, as is presented in the above outlined more toxically presented in-house competition scenario. But rather than being set up to pit employees and teams against each other, to keep everyone a bit scared of possible failure to perform and succeed, this win-lose contest was organized and run to encourage out of the box creativity, and with bonus and longer-term career enhancement potential. The overall orientation of this was positive, rather than negative and affirming rather than threatening.

I am going to discuss business processes and practices from the perspective of the individuals involved, with a focus on assumptions made and the contexts that decisions and their follow-through are made in. Here, to note a point of difference between these two in-house competitions, both of them were set up as competitions between employees and groups of them that would see themselves as opponents to each other. But the second of them was not set up in such a way as to make this a basic workplace norm. And it was not set up with a goal of bringing employees and managers there to see each other as opponents, and even at least potentially as enemies in a drive to meet senior executive and owner expectations. A general theory of business has to include and both descriptively and predictively explain that too.

Meanwhile, you can find this and related material about what I am attempting to do here at About this Blog and at Blogs and Marketing. And I include this series in my Reexamining the Fundamentals directory, as topics section VI there, where I offer related material regarding theory-based systems.

Reconsidering cause and effect assumptions in feedback-driven systems: implications for real-world business and economic systems planning

Posted in macroeconomics, reexamining the fundamentals by Timothy Platt on May 28, 2017

Feedback-driven systems fundamentally violate at least some of the basic underlying assumptions that underlie traditional cause and effect models. Or rather they tend to violate tacit assumptions that many and even most people tend to make concerning cause and effect and what those terms mean. The reason for that is very simple; in a truly causally connected linear once-through system, cause and effect are categorically distinguishable and both for their temporal order and for their respective fundamental natures. They are completely separate in nature and function then. And most of us at least occasionally, approach causality as if it routinely arose in a vacuum in this manner, and with a clearly definable starting-point causation and an end-point consequential effect. But causation almost always actually arises in the course of ongoing interactive processes where resultant effect leads to next-step cause and even in a tightly cyclical manner. It is rarer that causation per se can be simply and entirely viewed and understood outside of any possible pertinent context, and certainly when considered in complexly organized systems such as flows of business supporting operational processes.

Let’s consider such a linear once-through system as noted above, as a starting point for further discussion:

• If I hold a baseball out in front of me and let go of it, that action on my part coupled with the predicable action of gravity on the ball, as a complex of causal factors in play there, leads to the results of that ball falling and in time hitting whatever surface is immediately below it.
• Cause and effect are readily categorically distinguishable in this scenario, as each side to the cause and effect relationship described in it takes place in a particular temporal order, and right up to the point where that ball actually strikes the ground and the scenario ends.

But in a cyclical cause and effect-driven process, effect as arrived at in any one turn of that cycle becomes input for the next round of activity. And this brings up new types of functional relationships, and particularly as activity in one round in such a recurring process might have impact that continues past the end of that one cycle itself. This possibility in effect defines what feedback is, that effects achieved in any given cycle in a recurring process do not simply end there, but rather have longer term and recurring consequences that can be dampening overall, or additively expanding in cumulative influence (e.g. as negative and positive feedback respectively.)

Effect, in effect becomes cause or at the very least a parametric shaper of it in cyclically structured causally driven systems. And this has implications that are not always taken into account, and particularly in complex systems as arise in business operations and economic systems modeling.

Let’s consider this in the less abstract context of a specific working example, as drawn from economics: calibrating where a best tax rate would fall for maximizing revenue generated for a government, along a Laffer curve.

The basic concept of the Laffer curve seems to be relatively intuitively obvious. The maximum overall amount of revenue that a government can secure and bring in through taxation depends on the tax rate that it imposes as a percentage of revenue generated in the communities and society that it governs. If a government sets its tax rates at 0% it is not going to generate any revenue from that, and if it seeks to impose a 100% tax rate, it is unlikely to generate any revenue then either. In between it can generate a positive taxation-based revenue flow for itself. And the Laffer curve model seeks to predict at least categorically where as a matter of tax rate imposed, it can maximize the taxation-based revenue that it can receive. That percentage determination, of course depends on what assumptions are being made and both with regard to outside societal factors and with regard to government activity and its involvement in the overall economy as well.

Let’s at least begin to examine the assumptions made here with a brief and selective consideration of the high end of the curve for tax rate imposed. In a closed economic system where at least one crucial resource that is essential for day-to-day life, is monopolistically controlled by the state, and when that state can and would offer all goods and services that its citizens could or would access and use, then it would have the power to impose a 100% “tax” rate – in effect imposing a state-ownership form of servitude on one and all. And the wealth of that society as a whole and any “revenue” generated through its state-owned and controlled systems would go to and remain in the state and its hands.

• Money, as such would be more an accounting abstraction than anything else in such a dystopian, all government controlling society, but its movement would be entirely into government hands and coffers and would be maximized for that – not zero in value.

Now let’s consider less centrally controlling, but still significantly restrictive and controlling systems in which a government in effect skews the marketplace and its monetary value flows: its cumulative cash and monetizable value transfer flows. The more significantly a state controls and shapes availability of goods and services, and particularly for essential ones, the higher the tax rate it can impose and still receive greater overall revenue flow value from that.

Different economists arrive at very different understandings as to where a maximum revenue generation point would be for a conceptual model such as the Laffer curve. And the line of argument that I have just been offering here represents just one point of assumption that can lead to differences in what is concluded – and particularly when different people start out with different automatically assumed, axiomatic assumptions as to what would and would not arise in and shape a real-world marketplace. And I would argue that feedback and process cyclicity in general, drive the positioning of where a tax revenue generation maximum would fall, along any given proposed Laffer curve representation of an economy, as ongoing experience and feedback from it by members of the general public determines the overall levels of revenue generation that they will sustain that would be taxable.

The points that I make here apply to business systems too, and even in the extreme example form that I made note of above where a government controls and owns essential products and services, and taxes for access to them. Here and in a business systems context, consider the historical examples of geographically relatively isolated company towns, where a single business is both the major employer and economic driver of a community, and owner of essentially all stores and related businesses there that provide day-to-day essentials such as food and clothing. Members of such communities can all in effect become as if serfs to those community and region-dominating businesses, and in a manner that parallels the situation faced in my above-offered government controlling example. And I add that where money per se becomes essentially an in-government abstraction there, company towns and businesses that own them have commonly, historically paid their employees not in nationally minted currency but in their own company script – that only their company owned businesses would accept as if legal tender.

• Where that magic number maximum for tax revenue generated falls on a Laffer or similar curve, depends entirely on what political and politically-shaped economic assumptions are made, and particularly when they are simply assumed and axiomatically so.
• And where that magic number falls along such a curve, crucially depends on what feedback and societal response patterns are assumed and on how members of such a society calculate what is and is not in their own best interests to do.

And this conceptual gap in how a Laffer curve model is more usually formulated is at least partly informative as to why I see problems in the basic underlying model as whole in framing any given specific tax policy: it is presented as if it were a systematically analytical model but it leaves too much out, that is not going to be addressed and certainly in anything like partisan political debate, that would go into actually meaningfully applying it in setting taxation policy.

As a final thought here, I acknowledge one that I have been implicitly basing this posting on up to here on a number of unstated assumptions too, and on assumptions that I readily acknowledge are not always going to be valid. When you review the maximum personal income tax rates that nations impose upon their citizenries as of this writing, you find extreme ones for high percentage that would not fit all Laffer curve calculations and certainly as they would be arrived at for nations such as the United States (see List of Countries by Tax Rates.) Finland, for example, is listed as having income tax rates that go as high as 61.95% when combining maximum national and municipal tax rates and added-in social security taxes too.) Even this though, would actually fit the basic model if you consider the value of services provided by the state, as balancing competition to pressures that higher tax rates can impose on overall productivity levels in an economy. But on the other hand, there are low-end for income tax rate nations, that in effect have what amounts to negative tax rates for their own citizens. Some of the major oil producing nations have in effect subsidized their citizenries in this way. And if the Laffer curve breaks down for the occurrence of any circumstances where a 0% income tax rate would make sense financially for a government, it certainly does not address nation states making ongoing support payments of this type. This can only be addressed by changing the basic assumptions to allow for nation states that own significant means of value production: such as oil production, where they in effect share the wealth with their own citizens and even to a level that makes all of their citizens wealthy.

I add this final detail here to highlight that I have only begun to touch upon the types of assumptions that an economic paradigm model such as the Laffer curve rest upon. And differences in what is assumed behind it, can and do render the resulting calculated curves into what can amount to veritable Rorschach tests. This is all very important and certainly as it looks like partisan Laffer curve predictions and calculations as variously made by differing ideologs, are going to play an important role in any Congressional debates and actions taken in the United States and I add elsewhere as well, in the coming year and more as tax policies come under review. So this is not just an abstractly considered topic or posting.

You can find this and related postings at Macroeconomics and Business and its Page 2 continuation. And I also add this as a supplemental posting addition to Section VI: Some Thoughts Concerning a General Theory of Business, as can be found at Reexamining the Fundamentals.

Technology as the tide that raises all boats 8 – but often unevenly 5

This is my 8th installment to a discussion that I initially began as a single stand-alone posting in April, 2012, but that needs reconsidering. I focused in that posting, on a key issue that enters into a determination of how and when change rises to a level of significance so as to qualify as true innovation (see Outsourcing and Globalization, postings 25 and loosely following for Parts 1-7, and Part 1 of that in particular as the foundational urtext for this narrative.)

I have been at least touching upon a succession of issues in this series, that address the question of what qualifies as true innovation, and certainly in a changing product or service development context, and a change-demanding marketplace context. And that progression of postings has led me back to this series’ Part 1 and its issues, and to the puzzle of economy of scale in enabling innovation.

Business scalability and the processes and complications of actually pursuing that course have provided a recurring thread of discussion that has run through much of this blog. And in that regard, I cite a relatively lengthy series that I first started posting to this blog on July 8, 2012: Moving Past Early Stage and the Challenge of Scalability (see Startups and Early Stage Businesses, postings 96 and loosely following for its Parts 1-35.)

I decided to put that series in a directory devoted primarily to discussion of startups and early stage businesses, knowing from the beginning that I would address issues in it that would only arise well after any early stages in a business’ growth and development. And I chose to do that because I see scalability and the systematic growth and development of a business as a fundamentally strategically driven ongoing process – and as one that would best be planned for and prepared for from the beginning, and from the initial formally developed business plan in place.

I make note of that essentially-editorial decision here, in order to stress how strategically positioned the issues that I have been addressing in this series are, and to emphasize that point in particular here in this installment to it. And with that noted, I turn here to focus on one particular aspect of the complex change-driving process of scaling up a business:

• Innovation and the ongoing effort to innovate in order to keep a business as competitively strong and efficient as possible while growing it in overall scale.

For purposes of this series, I parse innovation here into two separate but nevertheless connected and interacting domains:

1. Innovation within the business and in how it is structured and organized and in how it functions, operationally, and
2. Innovation in what that business brings to market as products and services offered.

Part 1 of this series focused essentially entirely on the second of these visions of innovation, and on how the scale of change in what is brought to market changes over time, requiring larger and larger incremental increases in market-perceived value for any given change to be seen as a genuine innovation by purchasing consumers and end users. I begin this posting’s discussion by noting that the more competitively efficient and effective the businesses in an industry become on average and as a general rule, the more difficult it becomes to find and institute a new and novel next-step business process improvement in any of them that would rise to a level of significance so as to qualify as being truly game-changing and innovative too. Simple evolutionary change in what is already more routinely being done is very unlikely to qualify as truly innovative in this context and certainly in a fast-paced and competitive industry or sector – and even if essentially any change that offers increased value to a business would qualify as being truly innovative in a more settled and moribund one.

Setting aside consideration of older and more static industries and of markets that show no real change except perhaps shrinkage, and focusing on actively developing industries and their markets here:

• The more and the more rapidly the businesses in those industries change in order to keep up and push ahead, the larger and more pronounced a new next step change has to be for them, if it is to stand out as representing a new source of genuinely innovative value.

I briefly touched upon this concluding point in Part 7 and expand upon it here, with some organizing explanatory detail added, as this is an important consideration in understanding business innovation per se. I write fairly extensively about innovation here in this blog, and this has been a very important point of focus in my own professional life. I explicitly note here, how

• Next-step and next-step after that innovation becomes more and more challenging and particularly in rapidly changing markets with change-demanding target audiences and consumer bases, and for any businesses that seek to service their needs.

I add that it can and usually does become more expensive and more resource demanding to innovate over time too. And real innovative change comes more and more from disruptive change with anything less than that: anything seen as merely evolutionary and incremental in nature, simply seen as being more cosmetic in nature.

That stated, let’s reconsider the two numbered points as offered above, starting with the first of them. Point 1 is very generally stated, and could only be addressed in general terms in a much more extensive discussion than I am developing in this series as a whole, so I focus on one particularly relevant aspect of that line of enquiry here, restating that in the particular, more-limited context of this series:

• I am writing here, at least in the within-business context of innovation, about developing new capabilities and resiliencies into a business that would enable it to offer to market, the same or better products and/or services, or a larger and more comprehensive array of them or all of the above, at lower and more competitive price points than the competition can match.

Ultimately, a business survives let alone thrives on the basis of its being able to produce and bring to market something that consumers will want, and want enough to pay for. This leads to the revenue streams that pay their bills and that allow for and support all else. Competitive strength and capacity to retain and even expand market share, and retain and even grow incoming revenue and profitability depend essentially entirely on that business’ capacity to produce and ship out and sell. And impact upon this, net of costs of implementation and of any new risk incurred, is where the value of any business process or other internal-to-the-business, change and innovation would be measured.

What have I been writing about in this series? As new forms and channels of communications and connectivity arise and as markets become more and more globally reaching and immediately so, the rate of change in those markets and pressure to innovate and improve in businesses facing them increases and increases and increases.

• And the timing and pace demanded for new and next in product development cycles keeps shortening too,
• And for all but the most dead-end, moribund industries that are essentially entirely driven by legacy technologies – until they are disruptively challenged by unexpected disruptive innovation too or until they simply disappear.
• And this speeding up of change and innovation in advancing industries,
• And this speeding up of how pressure arises, that compels that change, and of the forces that drive it, serve to create what might be considered a pace-slowing back-pressure through demands that any next incremental innovative change has to be that much larger in scale to even qualify as representing true innovation at all.
• Some might see this as a source of friction, and of information development and availability issues. And challenges of the type that lead to economic friction, and more locally to business process friction do enter into this. But friction per se and its consideration, only address part of this phenomenon so I use a different term here.

And this brings me to a commonly cited technology development scenario that has been proposed by many now in various forms when predicting where change and innovation and its recurrence are bringing us: the concept of the technology development singularity. For a now somewhat dated but still interesting and informative benchmark document on this conceptual understanding and on what it means, see

• Kurzweil, R. (2005) The Singularity Is Near: when humans transcend biology. Penguin Books.

More recent variations on the approaching singularity concept have focused on the emergence and realization of specific technology development benchmarks such as the development of true, generalized artificial intelligence that matches and then advances to exceed average human intelligence – and then presumably any realized level of intelligence that any person might display and even as true genius. This would presumably mean technology in effect coming to take over its own development and at paces that humans could not achieve let alone maintain on their own.

If you were to graph the pace of innovation development over time, these conceptual models would start out with innovation developing and the curve representing that, rising slowly and even very slowly and over generations per innovative step. But the pace of change keeps speeding up and even if slowly at first, and certainly until the first industrial revolution. Then the pace speeds up even more and until an inflection point is reached as the pace of advancement finally reaches a turning point. Such a graph is commonly depicted as taking the form of one arm of a hyperbolic curve. And we have in fact reached such a turning point with the pace of innovative change much steeper now than it has ever been historically. What I am writing of here is a breaking force, or back-pressure to repeat a metaphorical term already employed here that would prevent that curve from ever too closely approaching the vertical of essentially infinitely fast change – which I would expect any futurologist: Kurzweil included would see as a cartoon description anyway.

I am going to continue this discussion in a next series installment with at least two areas of discussion still to address in it:

• Globalization and the scale of the marketplace, and its capacity to create and support progressively finer-scale niche markets even as it drives global conformity too, and
• The realities of the technology diffusion and acceptance curve, and the pressures of the marketplace that would limit and shape the pace of accelerating innovation acceptance and of innovation occurrence as well.

Meanwhile, you can find this and related postings and series at Business Strategy and Operations – 4, and also at Page 1, Page 2 and Page 3 of that directory. I also include this in Outsourcing and Globalization – and see that directory for related material. And I include a link to this posting as a supplemental addition to Section VII: Reexamining Business School Fundamentals (reconsidered), of Reexamining the Fundamentals too.

There aren’t any good cold call marketing or sales campaigns anymore: some thoughts concerning general principles

Posted in reexamining the fundamentals, social networking and business by Timothy Platt on May 14, 2017

There are a set of basic principles that keeping proving themselves as relevant and even compellingly so and across wide ranges of potential application. They usually more commonly arise in discussion in specific specialized contexts, but the principles that underlie them keep coming up and in a diverse range of otherwise seemingly unrelated contexts and circumstances besides the ones that they might be best known for. And one of them that is more commonly expressed in a more monetary theory-specific context is captured in an empirically validated finding that is commonly referred to as Gresham’s law.

Gresham’s law states that even a potentially strong currency, with a valuation that is based upon a solid established correlation between unit of currency available, and product and service value available in the marketplace, can become diluted and weakened if too much of it is put into circulation. The more units of that currency that are out there in circulation, for every unit of productive and marketable value available in its national economy, the less those units of currency are or can be worth.

Imagine a nation with a strong currency that suddenly as a matter of policy, turns on the printing presses at its Treasury Department and floods the market with more and more of that money – and without any corresponding increase in the actual productive and market-facing value that its economy can maintain and that this money is supposed to represent in trade and transaction. If this approach is carried out too fully and for too long, that currency can plummet in value until it becomes essentially worthless. And that is why Gresham’s law is often summarized as “bad money drives out good,” and “bad money drives good money out of the marketplace.”

The basic principle underlying this is clear. Valuation and realizable value and their stability, depend on reaching and maintaining a critical balance: here between the levels of actual productive value that is created and maintained in an economy and in its markets, and a transactionally equivalent (monetary) value to that, that is supposed to represent it according to a set and agreed to value-for-value exchange rate.

Now let’s consider how this principle has its counterpart in other business processes and in the relationships that hold between other types of numerically scalable metrics. And let’s consider this in marketing outreach terms for purposes of this discussion. Let’s consider how this might apply in a phone center outreach setting and with a strong valuation baseline as a starting point that would be equated here with the once strong valuation of the above cited currency example, from before its printing presses were turned on and simply left on.

There is no such thing as perfect in the real world, but there are actively and carefully thought through examples of good and of intended best. As a baseline positive example that I am familiar with in detail, I turn here to one from my own work experience as a point of comparison here.

One of the industries that I have worked in as a consultant is automotive retail. And my largest scale assignment in that arena involved my taking an interim Chief Information Officer position with a large, roughly $400 million dollar automotive retail group with both new and used car sales outlets, and auto maintenance and repair shops, and direct business-to-business collaborations with for example, a partner financial service for setting up auto loans for their customers. Their goal was to offer a one stop shopping experience for their customers and both for purchasing a new or used car or truck and for maintaining these vehicles. And one of the core objectives that I went into that job with, was to remediate and expand a new but dysfunctionally disconnected call center that had been set up for the business as a whole.

There were a number of phone system and networked computer system hardware problems that I had to help unravel in turning that facility around, as well as significant software disconnects and related problems. Those issues are all worthy of consideration and discussion in a blog of this type, and I have in fact at least briefly touched upon at least a few of them in this blog. But my focus of attention here is different from that and in fact involves a basic functionality that I was trying to both maintain and strengthen while working there: their customer and potential customer calling system per se, that this new call center was supposed to facilitate and streamline.

Let’s consider the types of calls that the phone representatives working there were expected to make:

• They were supposed to call current customers with cars and trucks under warrantee to remind them when their vehicles were coming due for free services that were included in the terms of their purchase agreements. This included checkups and oil changes and a variety of other manufacturer or dealer provided basic maintenance options. And as these services were already covered and paid for as benefits to these customers, these calls were essentially always welcome and appreciated.
• These call center representatives were also supposed to keep for-fee maintenance and repair customers informed on information that they would need for scheduling work done. So for example if a customer needed repair done on their car that called for a replacement part that had to be special ordered, a phone rep would call that customer to tell them when this part had arrived, and certainly if there was going to be a delay in that so they could schedule their repair work. When special order parts where back-ordered and there might be delays in their delivery, this offered real value to the customer and was also generally appreciated.
• But these phone representatives also made sales calls, and to both established customers as their current vehicles began reaching a certain age, and to new and prospective customers as well.
• Let’s focus here on those new and prospective customers who had never purchased anything from any of the storefronts owned and run by this dealership group. Like essentially every other auto dealership, this business purchased lists of potential customers who were supposed to have been carefully selected and prequalified for inclusion on the basis of their meeting specific demographic and other qualifications. They would for example all live in an area that this dealership had found to match that of its current active customer base. Dealerships would specify where their customer catchment areas were when entering into agreements with these list aggregator businesses that they would purchase these potential new customer lists from, so they would only pay for leads from their area.
• And prospective customers included on these lists would have to fit a realistic profile for income and related criteria that would make them financially capable of buying a new or used car. And they would selectively include people with active driver’s licenses.
• And critically importantly, these lists needed to be up to date as the people most sought after were ones who might be interested in buying a car or truck, but who had not already done so somewhere else. Old listings tended to include people who had done that and who were no longer in the market to buy again.
• This is just a partial list of the types of filtering criteria that these leads aggregators use in assembling the lists that they sell to dealerships. To add one more, dealerships of necessity insist on buying exclusivity in their leads contacts lists; they do not want to buy leads that that aggregator is simultaneously selling to other, competing businesses, or that other aggregators are also selling to their business clients.
• So there were a variety of criteria that would go into assembling these lists, to increase the likelihood that anyone called on one of them would both drive, and would be interested in purchasing a good, reliable car or small truck of the type that this dealership group offered, and that they would want to do so in the right area geographically to make that one of their showrooms a good choice for them.
• In practice, one of my work responsibilities while there was to manage these leads list provider contracts. And I worked with one of my best sales managers there in doing so. The basic questions that came up in this due diligence exercise were very simple:
• How many of the prospective customer leads that were provided by each of the aggregators that they were in contract with, actually turned into completed sales? And what did this business actually pay for these leads when the overall cost of the complete lists paid for was amortized across those much fewer successful sales? And how did this cost compare with the potential profit margin that this dealership group could expect from these completing those sales, net of having to purchase these sales leads in the first place?
• It turned out that many of their leads providers were failing them for the low levels of conversions to completed sales achieved from their lists and a couple of them consistently, month after month failed to yield even one completed sale at all. I had to find ways to get this dealership company out from under the contracts that they had signed with a large percentage of the lead providers that they were buying these lists from because quite literally, so few of the entries on them were leading to sales that the dealership group was losing money on them when leads costs were properly taken into account.
• I worked with some very good people there and both for the managers who I worked with and for their hands-on call center and sales personnel, and together we were able to turn that part of this business around. I add that I got to work with a good attorney on this too, as well as with members of their Information Technology staff and a wide range of others. And I hold that up as my positive example where all effort was being made to only call the people who would be receptive to being called and who would see value in doing business with this dealership.
• Even under the best circumstances, only a relatively small percentage of calls of this type, and certainly cold calls to new potential customers actually work out and lead to completed sales. But all effort was made to at the very least make sure that no perspective customers who were called would have reason to hang up feeling irritated. That, among other things meant not taking a high pressure sales approach and always being polite. It meant listening as well as speaking and it meant knowing when to end a call that was not working too, and doing so with a thank you.

There is no such thing as perfect in the real world but there is and can be good and there is and can be polite, and real effort can be made to limit call lists to target audiences that actually make sense to the merchant calling. And that is my positive end of the scale example for this posting and its discussion. And it brings me to robocalls and badly framed ones that would leave anyone receiving them wondering what type of scam was being attempted on them – or convinced that they already knew.

Think of the seemingly endless flood of those calls as a counterpart to turning on those Treasury Department printing presses and leaving them on, and seemingly endlessly. And this vast toxic background and context that any good practices calling and cold calling in particular would be embedded in, renders them valueless too and to all concerned – and certainly to any business attempting to make them.

And to complete this example’s narrative, I cite businesses such as Nomorobo that provide automatic blocking services to prevent scam, spam, phone phishing and other offensive calls from getting through – and for both robocalls and in-person calls as would come from a call center of the type just described.

Robocallers see their costs per call as being so low that they can make money even if only the tiniest percentage of their calls actually get through and succeed for them. They are not looking for repeat business, and certainly for more dubious businesses that pursue business this way, they are only looking for one time scores from anyone they can convince to buy into their pitch. They, in game theory terms, pursue a win-lose strategy with their prospective “customers” and they only need to win occasionally to win big, overall. So the types of Gresham’s law style calculations that I would cite here do not matter to them. Businesses such as the automotive dealership group that I cited above seek to develop and long-term customers and seek to pursue win-win strategies and those calculations can mean the difference between success and failure for them. And the dynamics of this disparity drive the shift in valuation of customer calls, and of cold calls in particular down towards zero – and even into a “loss at best” territory and for all, and certainly for legitimate businesses.

• Bad money drives good money out of the marketplace.
• Bad calling drives good out of the market too, in this case converting it and certainly in its cold call forms into essentially guaranteed money losing propositions.

You can find this and related material at Social Networking and Business 2, and also see that directory’s Page 1. And I also include this as a supplemental posting to Section VI (Some Thoughts Concerning a General Theory of Business) of my Reexamining the Fundamentals directory.

Some thoughts concerning a general theory of business 14: considering first steps toward developing a general theory of business 6

Posted in blogs and marketing, reexamining the fundamentals by Timothy Platt on April 22, 2017

This is my 14th installment to a series on general theories of business, and on what general theory means as a matter of underlying principle and in this specific context (see Reexamining the Fundamentals directory, Section VI for Parts 1-13.)

I began to explicitly discuss business transaction flows and the overall business strategy and planning that informs them, in game theory terms in Part 12 and Part 13, focusing on win-win game strategy approaches in Part 12, and offering an at least initial discussion of a wider range of game strategy options in Part 13.

And as a baseline starting point for that, I focused on win-win game strategy approaches as they would apply to ongoing long-term stable businesses that operate in stable ongoing markets and in stable long-term supply chain or similar business-to-business collaborations, insofar as they enter into them at all. I offered this as a baseline business model approach for addressing a game theory approach to thinking about and understanding business strategy and operations. And with that baseline starting point at least briefly discussed, I began an at least initial consideration of other game and business strategy alternatives that would be arise from this more stable scenario as complicating factors are added in. More specifically, I widened the scope of this discussion to consider win-lose scenarios, noting how that type of approach might circumstantially offer greater perceived value, in games (business transaction flows):

• That would only be expected to continue for a limited duration of play (as for example when developing and capitalizing upon short term and even explicitly time-limited seasonal business opportunities),
• Or that would be carried out under conditions of greater perceived risk and uncertainty as to how value would be exchanged (where that, for example can mean either uncertainty as to payout, or limitations to the overall pool of value that could be paid out that would not necessarily cover all value owed),
• Or for some combination of these two strategy-shaping constraints.

More explicitly considering the first of those bullet points for its relevance to what is to follow in this posting, I explicitly note anticipated end-game strategies as they enter into this discussion here. When a player: a participating business faces an end point in what has at least become a time-limited business opportunity, would be more likely to benefit from pursuing a strategy and a game approach here, that would limit the likelihood and scale of what could become a deficit in the receipt of value obtained, as that business opportunity time limit is approached and reached. This certainly applies when considered at the level of the business as a whole, but it can also apply in functionally separate areas of a business that might individually face explicitly time-limited opportunity and even when the business as a whole is an ongoing long-term-stable enterprise that at a higher overall level pursues more win-win strategies and certainly with its long-term ongoing business-to-business and market-facing contexts.

Strategic decisions and their corresponding underlying game strategies would be selected so as to maximize opportunity and gain, and minimize likely risk and cost, and with that determined at whatever the organizational level was most pressingly in need for such consideration. And large, complex enterprises often pursue several such approaches at once.

Win-win essentially axiomatically assumes that if there is a deficit in the balance of value received on one side at any given time, that imbalance can be and almost always will be addressed and corrected for in later transactions. Win-lose is predicated at least in part in terms of there not always being that next time, value creation and exchange transaction that could accomplish this. This constitutes the basic starting point for understanding where these approaches would respectively apply. But as noted in Part 13, time per se is not always the only, or even necessarily an important determining limiting factor there.

I have been addressing this in relatively abstract terms in Part 13 and again here in the opening of this posting. But at the end of Part 13 I stated that I would address this complex of issues in more concrete terms and by at least briefly and selectively discussing a specific, real world business model example. And the one that I will delve into here does in fact call for what would become an essentially pure win-lose game strategy as participating businesses that pursue it approached the very explicitly time limited end points of their business operations and revenue generating seasons. But in anticipation of discussion to come, even a seemingly win-lose game strategy oriented business can have compelling reasons for selectively pursuing a win-win approach too. That type of strategic and operational distinction is contextually grounded and that fact emerges in the case study that I at least selectively examine here.

The businesses that I refer to are small scale seasonal ventures that seek to generate what amounts to windfall revenue opportunity starting soon after Thanksgiving in the United States and lasting up to the day before Christmas. These are ventures that are set up and run by small operation farmers and other small business owners who either grow appropriate species and varieties of pine trees on otherwise unusable land that they own, or they buy trees grown by others in this manner at local rural wholesale cost. And they then bring these product offerings to densely populated urban settings, and certainly to cities in the Northeast of the United States such as New York City. And they set up short-term retail sales outlets to offer and sell those trees at a significant markup, net of all costs incurred from doing this.

This is a short-lived business opportunity that is driven by a need to minimize waste and loss, and to create value and profit generating opportunity at all possible points. So these entrepreneurs also take the salvageable loose branches that they would have to trim off of the bases of the trees that they would sell, and other waste trimmings – waste from the perspective of selling intact tress, and shape Christmas wreaths and other marketable items out of them. And for value added opportunity they often sell inexpensive bases that a newly purchased Christmas tree could be set up in, in a buyer’s home.

Value added, supplemental sales opportunities do not end there for many of these small time-limited businesses. Maple syrup is in fact harvested in the Spring in places like Upstate New York, Connecticut and Vermont, when the sap in those trees starts flowing back up from the roots again to revive them for the warmer months ahead. But a number of these Christmas tree entrepreneurs save bottles and jugs of their earlier harvested and processed maple syrup – or obtain it at lower wholesale cost from local producers, and offer this and similar add-on items too. Maple syrup may be produced in the Spring, but it is consumed more in the Autumn and Winter, and is popular during the Winter holidays.

The entire season for this type of business venture is very brief, and the end point of Christmas day is completely inflexible and unforgiving as far as any tree or wreath or similar left-over inventory is concerned. If an item is not sold by the day before Christmas, it becomes a complete loss and with all expenses and amortized shares of costs covered by it uncovered by any possible recouping sale and even at a discounted price, and with an additional added cost of it having to be hauled away for disposal too.

How does this play out in a win-win and win-lose game and business strategy defining context? As outlined, this sounds at least at first glance like a business situation that would follow an essentially pure win-lose gaming strategy approach. But let me begin with what longer-term, can even become a legitimate win-win source of opportunity for these businesses, and for partner businesses that they enter into transactional agreements with. And in this, I simply assume that while a given seasonal sales opportunity might begin and end at very set and immutable points on the calendar for any given year, an entrepreneur who succeeds in this type of venture one time might want to come back to it recurringly and even on an ongoing yearly basis.

Even if they grow and harvest their own trees from land parcels that are best suited for that purpose and not for farming, they still might want to supplement the selection of trees that they provide from their own effort with additional trees, that have grown out to the right size and that would be particularly popular by type to the end consumer market. If they do sell add-ons such as that maple syrup too, cultivating mutually agreeable business-to-business relationships with local sources of those items might make sense to, and particularly where they have to maintain wider-ranging relationships with the local-to-them providers that they obtain these offerings from.

Plastic tree bases, to cite a different category of add-on product offering, would not in any way be locally produced or wholesale sold. So these entrepreneurs would in most cases obtain them at lowest possible per item cost and through online outlets where transactions tend to be more one-off. Different sources might very well offer the tree bases required at best per unit costs, from year to year and even within a single year if it was necessary to restock during a sales season for them.

And to add one more consideration here that is very relevant to these businesses, consider where they would set up and conduct this business, and the need for their entering into agreements with property owners where they would sell. A smart entrepreneur would seek out a more mutually beneficial agreement there, so as to secure the same location again the next year and at reasonable cost if they chose to enter into this type of business venture again. And they would make the effort to make sure that everything they did in the course of their business there was done in as clean and uncluttered, and as non-disruptive a manner as possible for the owners of that property, and I add to avoid possible complaints that might lead to fines from the city. The difference between success and failure in this type of venture is as much a matter of location as it is of anything, and of being a good neighbor and presenting a good image to prospective customers. So pursuing a more win-win game strategy there can be vital to success for all of these considerations – and even in such a tightly time-limited business venture.

Now let’s consider the more win-lose side to this. All sales are final and while everyone would be polite and friendly, all transactions would be carried off as if entirely one-off and not as a means for developing long-term repeat business opportunity with any given customer. Business-to-business relationships that were entered into that did not explicitly center around building for a next year opportunity or for explicitly protecting that year’s effort would be carried out using a win-lose approach with a focus on revenue and profits received and not on mutual exchange of value in anticipation of ultimate return of value from that. And as the season progresses and the pressures mount to sell off as much as possible of that remaining inventory, this more win-lose approach becomes paramount, to prevent loss of what profitability might have been achieved up to then.

The roughly one month nature of this business opportunity with eleven months intervening helps to drive this too, and even for entrepreneurs who return to the same locations every year to restart their Christmas sales ventures. This scenario is very different from what you would expect or find with a more standard, non-seasonal retail venture such as a bricks and mortar retail store that is built for its strength and profitability around long-term stable supply chain systems, and stable repeat business customer bases.

• Note that as briefly outlined above, even a short term business of the type considered here would use both win-lose and win-win game strategy approaches – at least selectively and even if end-game time constraints would push them to a more win-lose approach and certainly as their season is about to end.
• More stable bricks and mortar retails of the type just noted might primarily employ a more win-win gaming approach. But even they would at least occasionally find more value in pursuing a win-lose approach too. And to highlight that, I note the second bullet point form the top of this posting where I cited reasons for taking a win-lose approach in the first place: uncertainty and risk – and particularly for circumstances such as working with new suppliers and for item types that the business might or might not want to carry for any extended length of time.

In this type of business, and for this type of stable, long-term retail store, it might begin working with a new supplier and might begin test offering a new type of product line that it offers on a more test case and ad hoc basis – and then intentionally and strategically switch to taking a more collaborative, win-win approach with them if their product offerings prove themselves, making a more stable and long-term business-to-business collaboration more feasible and for both parties.

I began this discussion with an expressed focus on win-lose game scenarios but of necessity discussed mixed strategies as well, as real businesses almost always deploy both win-win and win-lose. The defining difference here is in where and how differing businesses would select and follow which of this set of game strategy alternatives, and what proportion of their overall business strategy and underlying business model would best be predicated on which of them. The Christmas sales business is on the whole more win-lose and certainly for large areas of its business operations, while the stable bricks and mortar retail store would be much more win-win oriented. But they would both strategically follow both of those game theory approaches at least where that would make the most sense for them contextually.

I am going to continue this discussion in a next series installment where I will focus on how that balance is arrived at and how it changes with time. So far I have addressed business theory at the complete-business level and at least briefly at the defined functional area/decision making level within single business organizations too. I will continue addressing general theory of business considerations at those organizational levels in my next installment too. But looking further ahead, I am also going to step back from that higher organizational level of consideration and discuss all of this from the individual employee and manager levels, and the business owner level too. And I will do so both from the perspectives of their own work and career planning and from that of how members of these groups each variously work in and support the businesses that they participate in, as they help to meet overall strategic and operational business needs. I will consider a range of possible stakeholders there. And moving outward from the single business organizational level in this narrative – which I would consider here a baseline level of consideration for purposes of this series, and this more individual participant level of involvement in these systems, I will explicitly discuss the issues raised here from a supply chain and related value chain systems perspective, and at that higher organizational level too. I will explicitly discuss business theory at a business and marketplace ecosystem level. This flow of discussion is going to call for a progression of upcoming series installments, and I offer this anticipatory note here to indicate at least in broad brush stroke terms, the basic direction that this series is headed, and certainly as of now in it. I expect to add in more elements to this narrative progression as I proceed, but this is the basic outline that I will add them into.

Meanwhile, you can find this and related material about what I am attempting to do here at About this Blog and at Blogs and Marketing. And I include this series in my Reexamining the Fundamentals directory, as topics section VI there, where I offer related material regarding theory-based systems.

Reexamining business school fundamentals (reconsidered) 16: what goes around, comes around – in variations

Posted in reexamining the fundamentals by Timothy Platt on April 2, 2017

This is my 16th and concluding installment to a series of brief, single issue sketches in which I reconsider each of a set of core issues that I first addressed in this format in a 2010 series. See Section II of my directory: Reexamining the Fundamentals for that earlier related series. I have been successively addressing essentially the same set of underlying topics and issues in this series as I touched upon in that earlier one, with each of these new 2017 installments lining up with a same order-listed counterpart one from my 2010 writing.

I add this posting in here as a note of overall conclusion to what I have been doing in all of this, here seventh year effort – at least for where matters now stand at this point in time. But perhaps more significantly I write this series installment to this effort as a more proactively forward-facing thought piece than I have offered in its earlier topic-by-topic installments leading up to it. And I finding myself writing this, thinking of the months and years to come until I begin adding in a third series iteration to this now progression of connected series – and I am planning on doing that too.

I would begin this posting itself by explicitly noting the tritely obvious: I do not have a working crystal ball and I am not clairvoyant. So I am limited in what I can predict, by the completeness and accuracy of the data and processed knowledge and evidence, suggestive included, that I can gather and by the limits of my analytical capability, and by the timeliness of the evidence that I do gather in, and by the impediments of having to identify false leads, factual error, unidentified bias and all of the other sources of friction that would have impact on any understandings reached. In short, my crystal ball simulation attempt, such as it is, comes with a warning that its surface can get a bit smudged and cloudy. It suffers from at least occasional astigmatism; it can be a bit out of focus. I write this concluding note with the prospect of evolutionary change in mind, that can in fact be predictable and sometimes even quite so, and certainly for overall pattern and direction and even when projecting and planning long-term. I also, and perhaps more tellingly write this with the prospect of the emergence of the disruptively new and novel: the unpredictable in detail or form as it unexpectedly arises.

• The election of Donald Trump as the 45th United States president in 2016 comes to mind as a currently very topical, quintessential example of the novel, disruptive and unexpected in that.
• And the fact that the seeds of change were already in place and sprouting in 2010, that have brought us from an assumption of a general global opening up and flattening of 2010 to our current 2017-era push-back against that, shows that evolutionary change can and does happen too – and even when we are not effectively able to perceive such change until a more dramatic turning point is reached in it – such as the emergence of widespread resistance to and even assault upon international trade deals and free trade zone agreements, and yes the election of a Donald Trump.

Both of these basic forms of change: evolutionary and revolutionary, and all of the potential forms of confounding in understanding as to which is which in them that can arise, have taken place between the then of 2010 and the now of 2017. And both of these two basic forms have their elements of unpredictability and particularly when in the case of evolutionary change, it takes place in manners that we do not actively address or even fully recognize, in the underlying assumptions that we ultimately base all of our analyses and planning upon.

I am writing here of the past seven years; I am perhaps even more explicitly writing here of the years to come and of change, evolutionary and more revolutionary to come too. And what basic underlying principle could I cite here, that might offer at least a vague and general direction for understanding this ongoing flow? I would take my basic answer to that from Newton and his laws of physics:

• Every action engenders an opposite and equal reaction.

The seeds of push-back against global opening up, driven by the anger and anguish of those who felt themselves left out of the benefits of it and as losing from it, were there when the drive towards and the expectation of a true global oneness and connectedness were peaking. And that perception of a possible and even inevitable globalism as an emerging reality peaked, at least in part because of this opposite and equal reaction and its dynamics, as it began to grow in reach and influence.

The seeds of push-back against that next step response that we see now, are already palpably visible and growing too, and perhaps particularly because of the election of a Donald Trump in the United States and the growing emergence of his counterparts in positions of power and authority in the European Union and elsewhere. Those faces and voices might represent an alt-right vision of an apotheosis of conservative values as they see them – but it is at least as likely that the election of Donald Trump will be viewed as an unstable and fundamentally unsustainable high water mark for a tide that his election would turn, for the wave of resistance and pushback that it would empower.

• Every action – and certainly every impactful one tends to develop an equal and opposite reaction, and that is the one predictable truth that we can essentially always expect in the types of systems that I write of here.
• And while disruptively novel change might not be predictable in its detail or in its exact location or timing of emergence, it can be predicted to recurringly arrive and reliably so.
• And these more disruptive change events, by their very nature tend to be among the most impactful that we face, as it is their impact level that brings them to our attention in the first place as they rise up out of the more random background static of in-detail unpredictable smaller and less consequential change that is always happening anyway.

I just made note of the seeds of yesterday and of our current alt-right pulling away from openness and connectedness. And I just made note of the emerging equal and opposite push back against that closing off, and against the widely recognized xenophobic and bigoted forces that so vocally contribute to this pulling away. That side of this 2010 to 2017 reaction, which has effectively captured much of its movement as representing its defining face, will compel a reaction back away from its extremes. And our ubiquitous everywhere-to-everywhere and at any time connectedness, and the ubiquity of social media in all of this, makes any such shifts and reactive push-backs all the faster, stronger and more readily sustainable as they take hold. The cycles of change that I write of here can only be expected to come faster and more forcefully as they do. The shift from 2017 to what comes next will arrive faster and harder than the one leading to our current 2017 did.

• Change begets change, and both linear and trending change and cyclical change,
• And both evolutionary and at least in principle predictable change, and unpredictably new and disruptive change and with that pulling everything off of any readily anticipatable track.
• And the faster they arrive, the harder they all become to tell apart.

So I find myself writing here in this blog of 2010 and its then apparent seemingly stable realities, and 2017 and its for-now seemingly set and stable realities, and …. What’s next? I am going to return to that and to the issues raised in this series and my earlier parallel one as a meaningful answer to that begins to take shape and coalesce. And I conclude this posting, and this for-now completion of this step in what I anticipate to be a still longer term endeavor, with one final organizing thought: by raising a point of distinction between two competing views as to what the longer-term shifts that I write of here, actually represent. And I begin addressing that by positing two very different understandings of reality that enter into and shape the world views that in turn drive all of the change I have been discussing.

• The dynamics of the equal and opposite reactions and the forces of change that I have been wring of here, lead to shifts away from and back to what can often and even usually be considered recurring equilibrium points – conditions and patterns of at least tacitly accepted expectations that offer stable positive value and that can and do reach recurring acceptance.
• Or equal and opposite reactions and the forces of change lead to shifts, but to new homeostatic balance points. According to this, the “what comes around goes around” of the title of this posting, is always going to mean returning what at closest might only be a similar approximation point to an older expected “normal”, and with new balance points always reached when a more stable point of balance is sought out.

Think of the former of these as representing the conservative world view, and one that is so pervasive there, that it can become as invisible to those living in it as the water that fish live in can be to them. To cite a simple example of that, that has not itself explicitly raised its head in the current political debate in the United States, but that nevertheless informs it, consider the issue of original intent and original interpretation, as presumably held by the founding fathers of the country as they drafted the US constitution. That piece of set equilibrium point thinking underlies virtually all understanding of constitutional law in the United States, and not just for those who would identify themselves as conservatives. Words like “liberal” and “progressive” as more commonly used, do not in fact offer especially valid alternatives to “conservative”, as I am more traditionally using that term here (as opposed to its more alt-right reactionary use of today.) But to stretch one of our current labels, and perhaps unfairly, I would argue that the second of those world views comes closer to fitting a more progressive vision of change – where new balance points and understandings are both possible and even fundamentally necessary.

As a final point of observation for this posting and for this 2017 series as a whole, the conflicts that we are now entering into in 2017 and the ones that led us to where we are now, from our once more-2010 world vision, are ones of fundamentally conflicting world views – that just happen to be playing out now in the arenas of closed and restricted or free trade, and xenophobic walling off or openness to travel and commerce and even immigration between nations, among other specific-case issues. Those are the details here; the devil as they say is in the details and that is where all of this carries impact so they are vitally important here, but they are the more surface details, nevertheless. But there are deeper factors underlying what we see in the news and underlying the detail and process dynamics that shape that. In order for a narrative of the type that I attempt here in this now two series progression to offer value, it has to at least acknowledge that, and hopefully shed at least some light on it. And that has been the higher level overall goal of this 2017 series in particular of that effort, going beyond the specifics of its individual posting installments. An iteration three of this, as announced as being planned for above, will follow.

As a side note, and as a pointer in the direction of the seeds of 2010, I am not the only one to have noted their possibilities earlier on. To indicate something of my then concern for what was becoming possible in that, I offer a link here to a posting that I added to this blog on February 3, 2010: Online Social Networking and its Impact on Social Discourse and Democratic Processes. I wrote my first installment to the 2010 series that I have been developing this one from, to go live on the blog on July 22 of that year, a number of months later. I am sure that more mainstream news and analysis pieces will be readily available when I start working on iteration three of this progression of series, from today’s news and commentary and from many sources that in retrospect will have outlined and identified the new, next step seeds of change that are just sprouting now in 2017 and that will shape the context I will find myself writing about next.

You can find this and other related postings and series at Reexamining the Fundamentals, with this series offered as a new Section VII in that directory.

Reexamining business school fundamentals (reconsidered) 15: emerging 21st century realities

Posted in reexamining the fundamentals by Timothy Platt on March 29, 2017

This is my 15th installment to a series of brief, single issue sketches in which I reconsider each of a set of core issues that I first addressed in this format in a 2010 series. See Section II of my directory: Reexamining the Fundamentals for that earlier related series, and in particular see my earlier same-name counterpart posting to this one as included there: Reexamining Business School Fundamentals and Emerging 21st Century Realities.

I initially offered that 2010 posting as a brief statement of conclusion for its series as a whole, focusing in it on change per se as a more general condition, and as just addressed. And I noted in its context, both the at-least intended overall scope of what I had just been writing about there, and the intended underlying connectedness of all of the basic elements that I had just written about in it. And I add here that I also explicitly made note of the selective limitations of the specific set of issues that I had just successively addressed in all of that, and how my selection there was at least somewhat arbitrary, even as it was considered and thought through for its scope and content.

I identified my choice of organizing topics in that series, as collectively representing a single more overarching perspective as I saw matters, on the then current business and economic conditions that we all faced in 2010. And I offered that series as a benchmark starting point for later reference for when further assessing where change was bringing business and economic, and I add larger sociopolitical systems. I have to add here, that I explicitly planned out and wrote that earlier series with this next step series in mind, even if I did not have anything like a firm or fixed idea as to when I would come back to it with this next iteration.

I write this 2017 series installment as one of my two last concluding contributions to it, and find myself looking back at both this series and its 2010 predecessor in essentially exactly those same terms. I have, in that, successively returned to each of the basic topics that I first addressed in 2010 and in the same basic order and with the only real change in overall series structure here, coming from a 2017 inclusion of added-in supplemental framing and orienting postings at the beginning and end. I chose to include these posting elements now in this series iteration to help connect the two series offered so far in this together, and to put them more clearly into a single larger perspective. I have written this series largely as a posting-by-posting update on a same progression of issues and perspectives as before, and intentionally so. And with that stated, I note that if anything the issues of change that I began addressing in 2010 have become both more pressingly important and impactful, and more complex.

I began this installment with all of its attention focused on change, and that has in fact been a driving point of discussion throughout this series. That might even be considered the driving, conceptually organizing point here and for all of this larger effort. But I step back from that point of focus here to more explicitly consider constancy too, and to note how a great deal remains the same even in the midst of the most profound change. To offer a physical reality analogy here, invention of aircraft might make it possible for us to move ourselves and our goods through the air, but that does not and cannot repeal or even fundamentally change the nature or existence of gravity. Basic underlying principles and the empirical realities and their dynamics that shape them do not necessary change – only the circumstances and the conditions in which we experience them, as we seek to shape our own existence within their defining frameworks and within our now-current here and now. We might be facing different and even seemingly profoundly different immediate contexts now in our businesses and economies than we did in 2010. But the underlying realities underlying both timeframe perspectives as might be organized into a more comprehensive descriptive and predictive theory of business, that shape the one, shape the other too. They remain basically the same and will continue to do so.

One of the points that I have made in this series that bears repeating in that context is that the seeds of our 2017 reality that we now face were in fact already present in 2010 when we were facing an overtly very different day-to-day world with its then tacit day-to-day expectations. And it is just as certain that the seeds of a next iteration change are already forming and beginning to grow now too, that will in turn shape the perhaps very different day-to-day realities that I will hopefully be addressing a next time that I return to this complex of issues. My goal in that larger intended endeavor is to write succeeding series as short timeframe points of observation and perspective that could be strung together with these first two, along an at least somewhat longer explicit timeframe than any one such point in time series could offer, and with the wider overall perspective that that would support and even compel.

Change is important in all of this, and so is consistency. And one of the great challenges in all of this endeavor is in more fully perceiving and discussing which is which, and certainly when we actually live in and have to function in our immediate here and now, and in terms of strategic and operational planning that is of necessity grounded in it. This challenge, I have to add defines one of the principle compass-point guides that enters into and informs in my thinking as I incrementally develop and offer this blog as a whole too, and as I address both change in its cyclical and disruptively novel forms, and the underlying frameworks of consistency that that change takes shape in.

I began at least intimating change to come and the prospect of it in this posting. I am going to conclude this 2017 series installment in a next installment, where I will at least briefly offer a starter discussion of what these forward facing possibilities and perspectives might mean. And I note that as of now, I have not set a firm schedule in any way as to precisely when I will write my series three iteration on this complex of issues, but I will write my 16th and last posting to this second iteration with that likelihood in mind too. I conclude this iteration, or at least rapidly approach doing so, with firm expectations of coming back to all of this yet again in a few more years for a take three iteration, as the current-news specifics of this take two as offered here become as perhaps-quaint as those of 2010 take one probably seem now.

Meanwhile, you can find this and other related postings and series at Reexamining the Fundamentals, with this series offered as a new Section VII in that directory.

Reexamining business school fundamentals (reconsidered) 14: change management in a rapidly changing context

Posted in reexamining the fundamentals by Timothy Platt on March 25, 2017

This is my 14th installment to a series of brief, single issue sketches in which I reconsider each of a set of core issues that I first addressed in this format in a 2010 series. See Section II of my directory: Reexamining the Fundamentals for that earlier related series, and in particular see my earlier same-name counterpart posting to this one as included there: Reexamining Business School Fundamentals – change management in a rapidly changing context.

I began that earlier posting with a brief orienting comment, that has if anything become more valid and more pressingly important today as write this:

• “In a fundamental sense, the entire series I have been assembling here on reexamining the fundamentals has been about change, and a complex of changes that are already beginning to make themselves felt, and for employees and those in job search and for businesses, for suppliers and customers and for those who focus on legal systems and for all frameworks that businesses operate in and across entire marketplaces. But this posting is going to focus on a very specific type of change – change mandated not by choice or according to pre-planned and more convenient schedules but change that is thrust upon a business.”

This vintage-2017 series is all about change too, and it is about the emergence of new sources of friction and the emergence of new sources of barriers and resistance that we all face and in our work lives and careers and in our businesses, and in our societies as a whole.

I wrote my 2010 counterpart to this posting, in terms of business competitiveness in an increasingly interconnected world where participation in supply chain and other business-to-business collaborations can create new forms of competitive capability and strength. And I wrote of how businesses that seek to go it alone can become competitively disadvantaged from that, and particularly where this would mean their drawing essential resources and real opportunity for flexibility and growth, out of their core areas as are most explicitly required for their business model and its effective execution.

I also freely admit, looking back at that earlier posting, that I cited Apple, Inc. in 2010 as an example of how a business can lose opportunity from taking too much of an in-house only approach, from a loss of focus on what should be its core essentials. My discussion there centered entirely on their business and its business model from before they made their interactive online and social media marketing shift, with their coming to focus on ubiquitously online-connectible hand-held devices such as tablets and smart phones, and now smart watches and more. I readily acknowledge that Apple has in fact come to thrive from pursuing what is still largely a more monolithic model. And I add in this context that I have delved into that story and on their change in fortune and how that happened – and into both Apple’s first attempt at this basic business model in an early desktop computer world and its newer success with it in: Rethinking Vertical Integration for the 21st Century Context (see Business Strategy and Operations – 3 and its Page 4 continuation, posts 577 and loosely following for that series.) I recommend you’re at least briefly reviewing that because the underlying reason for their change in fortune, in a very fundamental sense depended on precisely the type of globally reaching opening up and flattening that I focused on in 2010 and that is now under direct challenge. Apple succeeded the second time because they opened themselves up to a larger and even global community of potential buyers, through an interactive online and social media context that this global flattening enabled, and with all of the power of gorilla marketing and viral marketing that this made possible.

Will an increase in the severity and prevalence of the barriers that I have been discussing throughout this 2017 series, stop Apple and its success or even of necessity slow them down? No – Apple has developed a level and type of momentum in name recognition and cachet and enough of a reach in both, so it will not be able to blame outside forces of the types that I address here if they begin losing market share and their competitive edge. But Apple, Inc. did benefit and significantly from that opening up in making its current success possible.

• In a real sense I am not writing here about Apple, Inc. as a single business success story. I am writing about a change in the overall business and marketplace climate, and in our ability to connect and communicate globally – and in ways that could help create a next Apple success story.
• And I am writing about the possibility of greater resistance and challenge for a next potential Apple, as it faces greater resistance and friction in building that globally reaching level and type of brand recognition and loyalty that made Apple itself into its current success story. And in this, any lost opportunities and unrealized dreams will remain unknown because of their never having effectively launched out on that same type of success trajectory.
• And open and freely connected and communicating global community, to cite one element in support of that concern, can more readily turn what would more locally be just a niche market opportunity and even a small one into a much larger source of more geographically distributed opportunity
• And into a better, stronger foundation point for growing a business from.

And this brings me to the change management of this posting’s title:

• If effective change management means developing and implementing new and even disruptively new approaches and ways to break out of a rut, and to return a business to greater levels of overall business strength and competitiveness,
• And one if the biggest challenges that a would-be globally online connected business faces in its striving for success, can now be found in the increased friction and resistance to open connectedness of the type under discussion in this series,
• Then one of the core targets of action that change management should focus on, and for many businesses that find themselves in need of it, has to be in finding ways to create more effective and more wide ranging connectivity for their marketing and sales again, and across the now-dividing communities that we see around us – and in spite of the emergence of those new barriers,
• And if possible, by tapping into the forces that hold the most potential for creating those barriers, to create new disruptively innovative opportunity from them. (That is going to sound like a real reach for most readers but that is why this would call for disruptive innovation. And the first step in achieving anything like that, is in acknowledging that it might be possible and in going from there to map out its where and how.)

I am going to turn in my next series installment to address the set of issues that I looked into in 2010, in its posting: Reexamining Business School Fundamentals and Emerging 21st Century Realities. I initially offered that as a concluding installment but will add one more, 16th installment to this series to fully conclude this second look into this progression of issues and topics. Meanwhile, you can find this and other related postings and series at Reexamining the Fundamentals, with this series offered as a new Section VII in that directory.

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