| Greenberg,
Chairman/Founder of Scient on "How to Win in E-Business"
Our takeaway on Eric Greenberg's keynote
speech at the ICE Conference
The
New Business Ecosystem
The rules of business have forever changed as
networked technology transforms the world, work, and life. E-business is greater than the Internet.
Accept E-business because the dot.com’s are attacking and have
nothing to lose. ROI is
measured in new ways to include market capitalization, shortened cycle
time, and reduced time-to-market. Evolving
legacy systems to interface with E-business becomes an imperative.
“Any-to-any” computing is the future.
High value applications operating on standard, infrastructures
invisibly power E-business. Simultaneously, this must work and co-exist with existing
business. The challenge
becomes taking advantage of the new business ecosystem.
Tomorrow’s winning companies will be those that
take E-business to industries and economies.
They attack conventional markets and build industries where
conventional practices such as the value chain have become weakened.
Speed and rapid capital deployment are advantages as seen with
homestore.com in real estate and planetrx.com in pharmacy.
Upstart dot.com’s use unfair competitive advantage by having a
nothing-to-lose attitude, exercising controlled recklessness, and spending
venture capital. They also
are magnets for top talent that find this is an exciting, financially
rewarding thing to do. Opportunities
never disappear when there is nothing to lose and there is more money than
time.
Competitive
Advantage
Today, competitive advantage comes from
·
Increased speed – Beat others to the market consistently
because they are reactive, not proactive.
·
Intellectual capital – Knowledge management plays a key
role.
·
Market disruption – Change the rules for evaluation.
eToys.com and Amazon.com changed how their competition is viewed.
·
Asset leverage – Distribution channels, partners, and
money become commodities for wooing.
Being first mover is prudent. It carries less risk. First movers gain experience and
capture/define markets while the fast follower can only watch.
First movers are allowed to make mistakes while defining the
reconfiguration of industries and making opportunities for deals.
However, first movers must understand their core competencies.
They seize a bigger market share and valuation as they set the
rules of the game and escape extinction.
E-future
Components
Industry reconfiguration will manifest itself with
the disappearance of standard industry codes (SICs). Cross industry competition will be won by first movers with
the best relationships, user experiences, infrastructure, and distribution
channels. For the first time,
there will be a cross physical and virtual presence where there will be
little reason for differentiation. Extended
enterprises will manage affinity relationships as a means for
differentiation and stickiness and assign different access privileges.
Brick-and-mortar businesses will have to evolve by
leveraging their resources and determining their core competencies.
The convergence of the physical and the virtual is inevitable as
the economy becomes click-and-mortar.
Portal consolidation is equivalent to cannibalizing your young.
First movers go out and try things knowing they will be wrong 50%
of the time but rely upon customer feedback to know what works.
Some ingredients for the E-future include
·
The core of all business will be E-business.
·
Product brands will be built on E-platforms.
·
Retailer brands will be E-brands.
·
Service brands will be E-services.
·
Click-and-mortar will dominate.
·
Aggregation will occur; concentration and scale are weapons
to be feared.
·
Electronic technology will promote a more simplified life.
·
There will be three of fewer winners in each industry; the
stakes will be brutal.
The
Innovation Paradigm
Business-to-consumer (B2C) drives
business-to-business (B2B) exponentially.
B2B is 80% of new wealth generation.
A new value chain is being formulated and will dominate.
The formula for it is
Parallel
processing X
(60% pattern optimization + 40% pattern breaking)
= New Model
Innovation
Pattern breaking is the “new” paradigm
defining innovation with the element of seizing the unknown. Pattern optimization is the traditional element of
innovation. Innovation
requires multi-disciplines working in parallel, not sequential,
processing. It meets complex
challenges in compressed time with special skills and tools.
Winning in
E-business
There is no one set of metrics to define what
“works.” Economic results
are what your company defines them to be.
Success is different than in the past.
Eliminating old measures of success is more difficult and important
for the future.
Winning is
·
Being first. First
mover has a competitive advantage.
·
Being big. Size
matters.
·
Being customer-centric. Customers keep you in business.
Price alone is not how it works.
Build relationships with customers and question your assumptions
about them.
·
Possessing common sense. This is uncommon and considered “street smarts.”
·
Being simple. Provide
a simple value proposition that is consistent.
Never change the feeling or the branding.
·
Being flexible. Focus
on the success of your business, how to improve and fix it, and how to
quickly deliver it to your customers.
·
Being dominant. Your
business is not an island unto itself. There is a need for everyone to pull together since you can
not do it all on your own. This
is where partnerships and other relationships come into play.
·
Being viral. Get
people excited and talking about what you do.
This is stickiness and difficult to displace.
·
Being driven. Drive
market share and capitalization with a sense of urgency.
Laissez-faire does not work because your lunch will be stolen by
others.
·
Creating economic results. This is the reason you are in business. Make money or face consolidation. Devise ways to change the industry dynamics so that it makes
a return for your enterprise.
Unfair competitive advantage without breaking the law
is legal. Create and face it
by getting into the heads of your competitors and making an unassailable
position for your enterprise. Success
and failure are binary; you are either a one or a zero.
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