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Facing a new business reality

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Facing a new business reality

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We are all living in a world where the rapid development of new information technologies and globalization are changing everything; our society, entire industries, and the way we behave as consumers and employees. The days when brands could be built and markets created almost entirely through advertising in mass-media are over. Today, people who share similar needs or wants can easily connect with each other through their own volition, creating markets where they can exchange information about any products or services available that can satisfy their needs or desires. They might even create the services or products themselves. One thing that is sure is that the impact and reach of personal recommendations and influence has never been stronger, and it has all to do with the reach, immediacy and multiplier effects now available through the social web. If people like a brand and its products or services, they might become advocates for that brand, influencing their friends and other people with similar needs or desires to buy the brand’s products or services. The brand in turn becomes part of their social identities, which turns them into loyal and powerful brand advocates when they are considered as influencers among their friends or communities. If people start to dislike a brand and its products or services, or change their buying behaviors, they can create a force that might soon put the company out of business.

In a world where things changed less frequently and when there was plenty of time to react to newly emerged information, where markets did not emerge by themselves and change shape by themselves, it was possible to centralize planning and make long-term detailed plans and execute these plans over a period of several years. The contrast of this scenario to today’s situation couldn’t be larger. Most companies now operate in highly unpredictable and dynamic business environments where they are forced to prepare for the unexpected. They may still have an overall strategy and plan, but they need to be prepared to change it at any point in time and accept that the only feasible strategy is one that allows them to respond to change fast enough and good enough by distributing decision making power to everyone who may ever need to make a decision.

The ever increasing pace of change requires organizations to be able to respond to change by quickly mobilizing people and organizing and coordinating their efforts in new ways. To develop such abilities, Steven R Covey argues that organizations will rely on proactive and powerful leadership who:
“...keep a constant eye on the environment, especially when it comes to customer behaviors and attitudes, and make sure that resources are organized in the right direction. If they don't know what is happening in their business environments as well as within their companies and make sure to be headed in the right direction, "no amount of management expertise can keep them from failing"

The text above is from my contribution to the forthcoming book "Right Sourcing - Enabling Collaboration", edited by Rien Dijkstra, John Gøtze, and Pieter van der Ploeg. It's the result of the Right Sourcing project, a collective effort from a number of experienced contributors from 7 countries. The full book will be released under the Creative Commons BY-NC-SA 3.0 license. It will be published in a few weeks from now - be sure to keep your eyes open for it

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