Chapter 29 Chapter 11 How Companies Can Cope with Flattening (1)

Find simplicity in complexity, harmony in inconsistency, opportunity in difficulty. --Albert Einstein When I conducted interviews for this book, more than once I heard company executives tell me in unison, "In recent years..." No matter what industry, no matter Whether it is a big company or a small company, managers and R&D personnel keep telling me that "in recent years", they have done things that they never thought of before, or they are being forced to do things that they never thought about before over things to do. These managers are responding to the triple confluence mentioned earlier.Every manager is devising a strategy for their company on how to thrive or at least survive in a new environment.Just as everyone needs a strategy for a flattening world, companies need one too.My economics tutor Paul.Romer always said: "Everyone wants economic growth, but no one wants to change themselves." However, you can't just pick and choose what you want. Since 2000, the world's competitive platforms have undergone earth-shaking changes. Everyone needs to be prepared for change.

If you want to thrive in this flattened world, you'd better remember, "Whatever is possible will happen, and it will happen faster than expected." The only problem is, you are actively To change or to change passively, did you drive innovation, or did your competitors surpass you by innovating? I am not a financial writer and this book is not about how to be successful in business.However, what I learned while writing this book is that the companies that thrive in today's competition are well prepared.They have realized, faster and better than their competitors, that everything is possible thanks to the triple confluence, and they have developed their own strategies to actively respond to, rather than passively resist, a flattening world.

The main content of this chapter is to introduce some strategies that these companies adopt to get ahead in a flat world. Rule #1: When the world is flat and you feel the pressure, you should tap your potential to meet the challenge, not build walls of protection. I'm from my good friends Jill and Ken.Greer learned this valuable lesson from Minnesota.Although I had a vague sense that the world was flat during my travels in India, it was only when I returned to the United States and talked about these issues with my two friends from Minnesota that I realized that flattening has So profoundly affects our lives.About 25 years ago, Jill and Ken (I'll introduce Ken's older brother Bill later in this chapter) founded their own multimedia company, Greer Associates, to produce commercials for television stations and Catalogs for retail merchandise take product images.They have a very good business in Minneapolis with over 40 employees including graphic designers and web designers, a multimedia studio of their own and a small team of local and national stable customer base.As a mid-sized company, Greer had to work hard to compete for business in the market.But after several years of development, Ken's business is booming, and the company's life is much better than before.

In early April 2004, to celebrate my wife's 50th birthday, Jill and Ken came to Washington and spent the weekend here.We were walking in the Virginia countryside one morning, and I told him I was writing this book, and he talked about his business.After a while, we found that we were talking about the same thing: the world has become flat, and this trend has developed so fast that it has had a profound impact on his business. He is still struggling with how to adjust his business development strategy to adapt to the changes .He clearly felt the intense competition and cost-cutting pressure he was facing, the type and degree of this competitive pressure, he had never encountered before.

"We had the Lone Ranger," Greer said.The so-called Lone Ranger refers to a "personal company."They fell from the sky like a plague of locusts, vying for business with companies like Greer, and they wiped out business wherever they went. "We're now competing with the Mavericks! We've never seen anything like this before. Our previous competitors were companies of a similar size and level of business to ours, doing the same job in more or less the same way, so every Competitors can survive by carve-out a piece of the market. Now the situation is completely different, our competitors have changed. We have to compete with giant corporations, which take everything regardless of business size, and with individuals Practitioners grab business, these people use their home as an office, use advanced technology and computer software to do the exact same work that our employees sitting in our office do. One is to hire a designer and let him use a computer to design a giant company, a mid-sized company doing the same job, and an individual designer working in the basement of their home—the designer may seem like a small company compared to the company, but from the client's point of view, all three Is there any difference between the products made by developers? In fact, the development of technology and computer software makes our products indistinguishable. Last month, we got 3 orders from individual designers. These designs The teachers used to work in a well-run company with rich work experience, and now they go out and do it alone. Our customers all say to us: "Your company is doing a great job, and John is doing a great job." , and he asked for a lower price. 'In the past, if we lost to another company, we would feel uncomfortable, but now, we lost to a person! "Why is it changing so quickly?" I asked.

Greer explained that a large part of the company's business is providing catalog photos, both product photos and model photos. For 25 years, the company's method of work has been to accept tasks assigned by customers. The client told Greer what kind of photo he wanted, and Greer's company designed a pattern that exactly met the requirements. Like all commercial photographers, Greer uses a single-shot camera to take pictures of products or models so that he can see immediately whether his creative inspiration matches the client's requirements, and if they do, he uses real film Camera shot.After the pictures were taken, Greer sent the film to the studio for development and color separation.If the photo needs retouching, it will also be sent to a specialized laboratory for retouching.

"Twenty years ago, we decided to outsource film processing," explains Greer, "and we left the technical work to other specialist companies because they had the technical equipment, the training, and the expertise. This work. They make money from it, we make money from filming. At that time, this division of labor was a good idea, and it may still be a good idea if this division of labor continues today, but it is no longer possible gone." Why?As the world becomes flatter, every such process becomes digitized, virtualized, and personalised.In the last 3 years, digital cameras for professional photographers have reached a whole new level of technology that is as good as, if not better than, traditional film cameras.

"So we compared different cameras and picked the one we're using, which is the most similar to our film camera," Greer said. It is exactly the same, except that there is a microcomputer inside the fuselage and a display screen behind the fuselage, which allows us to see the effect of the photo in real time. It still uses a set of lenses to adjust the shutter speed and aperture of the camera in the same way. Also includes ergonomic design. It is by far the first professional digital camera to reach the level of a film camera in its class." "This digital camera frees us from the complexity of working procedures," Greer said, "You can instantly feel the thrill and excitement of photography and you don't need a negative. Since the camera is digital, we No need to buy film, no need to go to a studio to develop film and do post-processing. If we take a picture somewhere, we can know if this is the effect we need. It can give us an instant euphoria. We call it For the electronic 'one shot camera'. We used to need an art director to scrutinize the existence or placement of each item to make sure the photo we were taking would produce the desired effect, but the final result would only be when the photo was developed It will be seen later. This kind of work is based on mutual trust between people. Our clients pay us as professionals because they need experts, and the work of experts is not only Press the shutter, and be good at designing the pattern effect that the customer wants. The customer trusts us, so they leave the work to us to complete.” However, the good times did not last long, and this intoxication lasted for only about a year.Ken and his colleagues found that digital cameras not only freed them from the tedious work, but also made them their slaves. “We found that in addition to being responsible for taking pictures and designing the corresponding artistic expression effects according to the requirements, we had to do the post-processing of the image repeatedly. The company became a post-processing’ studio. In the morning, we couldn’t help but say: “We Post-processing is also required. "How could this happen? Because digital technology allows Greer employees to download digital photos from digital cameras to personal computers or laptops, and realize various new functions through some magical software and hardware." So except Doing the photographer’s job, we also do post-processing and color separation,” Greer said. Once it becomes possible for technicians to do this kind of work, customers will ask for it. Customers will say that the company should provide this service , the company must provide this service. They will also say that because of digitalization, the company has the ability to provide a package of services, so the company's original service of image design should be bundled with all other services.

"Customers say: 'We don't pay extra for other services. ’” says Greer, “We used to outsource retouching tasks like removing red-eye or blemishes, but now we have to do them ourselves.The client wanted us to digitally remove the red eye before showing him the drawings.Over the past 20 years, our main focus has been on the art of photography: color, composition, texture and how to make people behave naturally in front of the camera. This is what we are good at.And now, we have to learn and get good at all these other technologies. We have never taken these courses, but the market competition and the development of technology force us to make up for these technologies and gnaw this bone. “Greer said that every aspect of his company has gone through a similar process. Market competition and technological innovation have forced them to edit pictures and video themselves, adjust their own sound equipment, and even make DVD discs. All the work that was outsourced in the past, Now it’s all condensed into a package that sits on your desk. The same goes for typesetting and printing: Greer & Associates does its own typesetting, does the illustrations, and sometimes prints itself because the company has digital color printers.” Work seems It's getting easier and easier, but it's not. "Now I feel like I'm going to McDonald's, and I want to eat fast food, but I have to wipe the tables and wash the dishes myself," he said. He continued: "It's as if the inventors of these technologies have negotiated with our customers in advance to bundle all this work and transfer it to us."If we say no and ask the client to pay separately for the additional work, immediately behind us someone is saying, "I can do this for no extra charge." remain the same or even decrease.

“With the introduction of technology in the process of globalization, all jobs become producing vanilla ice cream. This trend is becoming more and more evident in a range of industries. As more and more processes become digital, Visualized, motorized and personalized, more and more jobs become the production of vanilla ice cream: standardized, easy to manufacture and widely utilized. When all the products are the same, and the supply quantity is so large, customers have a lot of choices, and there is no right or wrong choice, because it is the same for everyone.When this happens, you become vanilla ice cream.

Fortunately, in the face of this trend, Greer chose the only correct survival strategy: to tap his own potential instead of building protective walls.Greer and his partners struggled to find their firm's true core competency, which was the primary force driving their firm forward in a flat world.Says Greer, “What we offer our clients now is strategic insight, creative inspiration and artistic vision. We sell inspiration and creativity, we sell personality. Our core competencies and main work cannot be digitized. .I know that our customers today and future customers are not going to leave, they continue to work with us because they see things that are not digitized in us... so we hire more creative people and put technical work Outsource." In the past, Greer said, many companies "hid behind technology. You can do well, but you don't have to be the best in the world, because you never think about competing with the world. The horizon is there, no one could see beyond the horizon. But over the course of just a few years, we went from competing with other companies down the street to competing with the rest of the globe. Only 3 years ago, for Greer United, a customer's order To be snapped up by a British company is unthinkable, and it's happening now. Everyone can see what everyone else is doing, everyone has the same tools, so to win you have to be the best and the most creative. "Stop making vanilla ice cream. You should offer something unique, you should be able to make a 'short dough cookie, cherry garcia, or chunky monkey' type of product," says Greer (these three ice creams are Ben & Jerry's made exotic brands)." It used to be that the business requirement was what could you do," says Greer, "and customers would ask, 'Can you do this?can you do that 'Now you need to be able to inject more creative inspiration and personality into the product...it's all about imagination. " Rule number two: Small businesses should have big bucks... Small businesses must learn to have big bucks if they want to thrive in a flat world. And to do that, small companies will have to rapidly take advantage of all the new tools that facilitate collaboration and expand themselves farther, faster, wider and deeper. I think the best way to make this rule clear is to use the experience of another friend of mine as an example.This friend of mine is Fadi.Gandour is the founder and CEO of Aramex, the first local company engaged in parcel transportation services in the Arab world, and the only Arab company listed on NASDAQ so far.The Gandour family was originally Lebanese and immigrated to Jordan in the 1960s.Gandur's father Ali.Gandur founded Royal Jordanian Airlines, so Gandur was born to deal with aviation.Gandur from George.Returning home after Washington University, he spotted a promising line of business: He and a friend raised some capital to start a small FedEx service in 1981, delivering packages primarily in the Middle East.At that time, there was only one global parcel delivery company in the Arab world, DHL Worldwide, which is now owned by the German postal service.Gandour's idea is to work with American companies that have no presence in the Middle East, like FedEx and Anbang Express.Gandour intends to offer to set up their local business branch. He believes that his advantage is that local Arab companies are more familiar with the local area and know how to avoid possible unhappiness to the local people, such as Israel’s invasion of Lebanon, the two The Iraq War and the US invasion of Iraq. "We said to them, 'Look, we're not going to compete with you in your home market, but we know the Middle East market, so why don't you just hand me your parcel and let me deliver it?'" Gandour said. ""We will be your branch in the Middle East. Why should you give up the relevant business to your global competitor DHL Global Express?" Anbang Express responded positively, so Gandur began to expand With its own business network, it has acquired and merged many small freight companies by way of buyout or cooperation.The distribution of these companies is very wide, from Egypt, Turkey, Saudi Arabia, all the way to India, Pakistan and Iran. Unlike FedEx, Anbang Express does not have enough funds to establish its own standardized service system in various regions of the world, so the way it adopts is to cooperate with more than 40 regional freight companies like Aramex around the world, This creates an effective global service network.By partnering with Anbang Express, these regional companies benefit from the ability to participate in global business activities locally and apply a computer-controlled package routing and tracking system, which allows them to communicate with FedEx and DHL. compete.All these benefits cannot be achieved by any one regional company alone. "Anbang Express makes the online package routing and tracking system available to all its partners, so there is a unified language and a set of quality standards among them, and in the Anbang Express alliance, everyone knows How to ship, track the route and track and trace the package,” Gandur explained.Since Aramex is headquartered in the Jordanian capital Amman, Gandour leased a data line in order to gain access to Anbang Express's computer system. Aramex uses the computer room of Anbang Express to trace the route, and has gradually learned the operating system of Anbang Express by heart.Once the Jordanian employees in Gandur got the hang of the system, Anbang started hiring them to go to other parts of the world to install the system for new partners and teach them how to use it, so these English-speaking Jordanians went to Sweden and the Far East, etc. area.Eventually, Anbang bought a 9% stake in Aramex to strengthen the relationship between the two. The cooperation worked very well, and Aramex began to dominate the parcel delivery market in the Arab world. In 1997 Gandour decided to list the company on Nasdaq, which is adjacent to Broadway. Aramex has continued to grow into a company with almost $200 million in annual revenue, 3,200 employees and no large government orders. Its operations are designed for the private sector, which is very rare in the Arab world.Because the growth of the Internet left traditional companies like Aramex in the cold, and because the collapse of the Internet bubble hit the Nasdaq hard, Aramex's stock price never really rose.Considering that the stock market did not realize the value of the company, at the beginning of 2002, Gandur and a private capital in Dubai bought back all the shares of the company from shareholders. Unbeknownst to Gandur, this action of his was exactly the way the world was flattening. He suddenly found that not only could he do new things, but he had to do new things that he had never imagined before. The first time he felt the world was flattening was in 2003, when Anbang Express was acquired by DHL. Anbang announced on January 1, 2004 that its express delivery operating computer system would no longer be used by former partners.Goodbye, I wish you well. Everyone faces challenges in the process of flattening the world. If it fails, a big guy like Anbang may also be overwhelmed by the tide of development; if it succeeds, a small company like Aramex can step up and replace the original big guy. occupied position. "As soon as Anbang announced that it was acquired and the alliance was disbanded," Gandur said, "I immediately called a meeting of the larger partners in the original alliance in London. The first issue was to form a new alliance." Gandur also A new suggestion was made: "I told them that Aramex is developing software in Jordan and is nearing completion. This software can replace Anbang's computer system. I promise everyone that this software will be available before Anbang shuts down its system. Put into use." Gandur is actually telling these collaborators that Aramex, which used to be inconspicuous in the past, has gradually grown and has the strength to be the leader of the martial arts. Although Aramex is small in scale, it can provide the same computer system support outside Amman, which was previously only available at Anbang headquarters in Seattle. Aramex will also look for more partners around the world to fill the void left in the original alliance by Anbang's withdrawal.To achieve this goal, Gandour told future collaborators that he would hire Jordanian technical expertise to manage all of the alliance's computerized business processing systems.These partners previously leased corresponding system services from Europe or the United States, and Gandur's quotation was much lower than that of European or American providers. "I'm not the biggest company in the league," says Gandour, now in his 40s with vigor, "but I have achieved leadership. My German partner is a $1.2 billion company, but they are open to change. I didn’t react quickly enough to the situation, so I fell behind.” How could Gandur react quickly?In a word: triple convergence. First, a new generation of software designers and engineers in Jordan has just grown up and is competing on a global level.They have at their disposal various collaborative tools necessary for the company to grow, and these tools are not exclusive to Ampang Express in Seattle.For them, as long as they have drive and imagination, they can make full use of these tools to achieve their goals. Gandur said: "The most important thing for us is to master the technology of the business processing system and immediately replace Anbang's system, because if there is no online system among the cooperative members, they cannot compete with big companies. We have our own software engineer, we developed an Internet-based mail transportation management system." Providing background management for all partners through the Internet makes management more efficient than Anbang, which connects everyone to the mainframe of the head office. Anbang's management of the system is too centralized. It has also realized this and started targeting new partners. The Internet tunes its own computer system.Using the Internet, every employee in the alliance can connect to Aramex's business processing system in a wired or wireless way through a personal computer or a handheld device. A few months after Gandour made his proposal in London, he gathered all his prospective partners in Amman to show them the proprietary system developed by Aramex and introduce him to his Jordanian software engineers. (Some software is being written by Aramenx engineers, other software is outsourced by Aramex, outsourcing means that Aramex is using the best minds in the world to serve it) Future partners are interested, and then worldwide The alliance was born, in which Aramex replaced the original Anbang company-located in Seattle, USA, on the highway leading to Microsoft-to provide system management for everyone. Another reason why Aramex was able to quickly replace Anbang was that they did not have their own system before, so they did not have to suffer losses caused by being forced to transform the original system like some companies. "When I first came up I went straight to the Internet, which was the latest technology," he said. "The Internet allowed me to use big money, to copy cheaply a lot of technology that big companies spent millions of dollars on...from the cost of For perspective, for a small company like mine, it's a great deal... I know the world is flat. As CEO of my company, I often tell my employees that we can compete and we can have a place in the market , the rules of the game have changed, you don’t have to be a big guy, as long as you master the technology, you can compete with the big guys on your own turf.” In January 2004, Anbang shut down its operating system, and Aramex launched Own new system, and achieved a seamless handover.The system's software is mainly designed by Jordanian programmers with relatively low salary costs, and can run through the Internet platform, so Aramex does not need to send its engineers to train other partners.Each partner company can use Aramex's system to establish its own customer data through the Internet, manage its own business processes, and become a part of the new global air transportation network. "Now we are running this global network of 38 partners that can cover every corner of the world," Gandour said. "Our Internet-based working system saves a lot of money ... you need It’s just a browser and a set of passwords into the Aramex system, and suddenly you’re in a global transportation management system.” Aramex uses a variety of online channels to train employees of other affiliates and teach them Use Aramex's system.These channels range from VoIP (Internet-based voice delivery technology), online chat, and other training tools on the company's intranet, making training incredibly cheap. Aramex soon began taking on other businesses.Foreign banks in Arabia and the Middle East hand over the business of sending credit cards to Aramex; mobile communication companies hire Aramex delivery workers to collect bills from customers on their own behalf, and the delivery workers only need to scan the credit cards of those companies, and then open Get a receipt. (Aramex may be hi-tech armed, but in the West Bank, the company still uses donkeys to deliver mail packages across military barricades as roads are blocked due to conflict between Israel and Palestine.) “We don’t have a lot of hierarchies in our organization,” Gandour said. “This federation is not a traditional Arab institution because in the Arab world, the private sector is like a government agency, strictly hierarchical and paternalistic. Aramex can No. There are no more than 2 or 3 levels of management between anyone in the company and me. Every brain worker in the organization has their own computer, e-mail, and access to the Internet. I can view it by logging into the company intranet Every computer, everyone's work, so I don't have to have my senior secretary keep me informed." All in all, Fadi.Gandur has used some new ways of working together to build his own supplier team, outsourcing business, and contracting business, and he has grown his small company with annual revenue of only $200 million into a giant.Gandur smiled and said: "I used to be a figure in my own territory, but I became an unknown person in the international market. Now I have reversed this situation." Rule 3: Large companies should learn to be small shops... In a flat world, one of the experiences of large companies in their development is to learn to let go when it is time to let go.The key to doing this is to offer self-service to your customers and employees without having to do everything in your favor. Howard, founder and CEO of Starbucks.Schultz said it's not out of the question for Starbucks to list 19,000 coffees on the menu at any average store.Starbucks does not do this, instead, it allows customers to mix drinks according to their own taste.It never occurred to Starbucks to offer soy milk to customers, until one day, customers asked store managers for soy milk.Managers had to go to the grocery store across the street to buy boxes of soy milk in the middle of the day.Starbucks has learned its lesson, and today soy milk accounts for 8 percent of all beverages sold in its stores. "We haven't thought about combining soy milk with other beverages," Schultz said.Let customers figure it out for themselves. Smart big companies are well aware that the development and spread of technology will allow them to work with customers in a whole new way—letting customers do it themselves.Full service for every client is impossible and expensive.Big companies should operate as much as possible like a kiosk: create a platform that allows every customer to choose the way they want to help themselves, whether they come on foot or in a hurry, whether it is day or night, whether they like sour food Still spicy.Large corporations are effectively turning customers into their own employees, making customers do the work for the company, and making them pay the company for it! An example of a large company learning to be a canteen is an electronic trading company.Michelle, CEO of Electronic Trading. H. Kaplan, who is both my friend and neighbor, said that the reason why Electronic Trading Company can provide meticulous service is to realize that there are actually important things happening behind the whole noise of the Internet bubble. "A lot of people think that the internet is going to change everything in the world without limit—even cure the common cold," Kaplan explains. shattered. But at the same time, without exaggerating, "the Internet is creating a whole new platform for companies to reach consumers in a whole new way, and for consumers to reach companies in a whole new way," Kaplan said. "While we were asleep, my mom learned how to use email to keep in touch with the kids, our kid kept in touch with his friends, and my mom learned how to check her online deals online situation." Enterprises that pay attention to the development trend realize that "the self-service consumer has been born".The tools that have flattened the world have allowed every consumer to tailor products to their liking for price, experience, and service. Large companies need to make adjustments in technology and processes to ensure greater freedom for self-service consumers, allowing consumers to grow bigger and themselves smaller.They should make consumers feel that each product or service is close to its special needs and is customized for him alone.In fact, the company just puts out a digital buffet table and lets consumers choose. In financial services, this approach has brought about profound change.In the past, financial services were dominated by big banks, big brokerages, and big insurance companies. They told customers what to get, how to get it, when and where to get it, and how much to pay.Customers don't like or even resent the way these big companies treat them, but they have no choice. But now that the world has flattened, and with the Internet, consumers are beginning to feel that they can have greater control.As consumers adapt their spending habits online, companies ranging from bookstores to financial services will need to change to give consumers the tools they need to take control. Kaplan said: "When the Internet bubble burst and Internet stocks plummeted", consumers had already tasted the taste of power, and it was different once they tasted it. control the behavior of the company.The rules of doing business have changed, and if you don't respond to it, if you don't provide what your customers want, someone else will and you'll be out.In the past, financial service providers tried to be big, but now they are all trying to be small, and let customers go big."The companies that are thriving today are the ones that have the right understanding of the self-serve consumer," Kaplan said. For electronic trading companies, it should not be regarded as a collection of different financial services such as banks, securities companies, and financing, but an integrated financial experience for the most self-service financial consumers. "What the self-serve consumer wants is a one-stop financial shop," Kaplan said. "When they come to our site, they need everything they want. Until recently, we didn't have a The technology that integrates the three businesses—banking, financing, and brokerage—brings consumers not only prices and services, but also a complete experience they want.” 如果你在三四年前登陆到电子贸易公司的网站，屏幕上一次只能显示一种业务的相关信息，比如经纪服务的账户。要想查看你的贷款账户，你必须重新进入另一个操作界面。“从2000年开始，随着科技的发展，”卡普兰说，“在一页屏幕上，你可以看到你的实时经纪账户——其中可以显示你的购买力，你还可以看到你的存款账户以及针对贷款账户的偿还额度计划表——还有多少款未还、房屋抵押贷款余额和信用额度——你还可以将这三个指标的额度进行转换，从而获取最大的现金收益。” 在法迪。甘杜尔通过接管小公司，将设法做大的策略来应对世界平坦化时，米歇尔。卡普兰则通过接管大公司，把他们做小而使消费者做大，在平坦化的世界中得以生存。 规则四：最好的公司是最善于合作的公司。在平坦的世界里，越来越多的工作要通过合作才能完成，不管是公司内部的合作还是公司之间的合作。理由很简单：下一阶段的价值创造，无论是在科技、生物、纳米技术、半导体、市场还是制造业领域，都将是十分复杂的，没有任何一家公司或部门能够独自胜任。