Business News & Trends

It wasn’t that long ago that a tremendous scare went through the internet community.    The issue had to do with the huge amount of data that can be collected on individuals using search engines online.  This large body of information naturally drew the attention of the Homeland Security agencies who are charged with the job of finding out all they can about potential sleeper cells of terrorism in this country.

The stand off came when the government began to demand access to the search records of all users of the major search engines.  When this upcoming struggle for privacy began to come to a head, many of us who depend on search engines for both personal and business research began to get that “big brother is watching” feeling.

It’s a tough compromise.  We know that our government must have the ability to find and put a stop to security risks that might result in another disaster like September 11th 2001.  But at the same time, Americans are tremendously protective of their liberties, their privacy and their right to be left alone by the government.
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The proliferation of branches of banks in most American cities has become so epidemic that it is hard not to notice the dominance of this kind of business on any street corner in your town.  In many cases, a busy intersection which might be used for retail operations such as fast food restaurants, cleaners, gas stations and quick stop stores has been taken over by banks.  In some cases you will see three of the four corners of a popular intersection in town occupied by different bank branches.

It makes you wonder, just how many banks do we need in town and why are the banking institutions spending so much money to put branches in virtually every location that has open space?  It is a business trend that gets your attention and it makes you wonder what is driving this bank explosion.  After all, in many cases there are not more customers for those banks.  You have to wonder how banks can cost justify such expansion when the growth of bank branches is not even in step with population growth in a given community.

The phenomenon has become more profound in the last ten years than ever before.  And much of it has to do with changes in how banks are regulated and the financial objectives that these branches are targeting, financial objectives that bring big money to the banking institutions spreading all over town.
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It is a well known axiom of doing business in any industry that those who do not stay in step with the times will be those companies that eventually die out.  There is no place where that truism is more evident than in the way that companies in virtually every business sector are finding to integrate an internet marketing strategy with their traditional communications and to provide the public with an internet “presence” to supplement their public profiles in other venues.

Of course, the value of the internet for sales and promotions has been well known in the industries that service the youth markets and for the companies dealing with entertainment and the arts.  Because the internet is in virtually every home and even now on hand held devices of every description, the access it gives to reach a target market are phenomenal.

This explosion of an entirely new marketing model has introduced the world of business to entirely new paradigms of marketing and new ways to achieve greater market penetration and sales.  And so any business who has had to get out on cyberspace to keep up with the competition has already had to learn a whole new vocabulary that has grown up around the internet marketing phenomenon.  Now terms like “Search Engine Optimization”, “Auto responders” and “Viral Marketing” become important and powerful tools to any business that wants to tap the power of the internet to increase sales.
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It is a well-understood axiom of the business world that there are two ways to improve the bottom line of the business.  Stated simply, those two ways are to make money or to cut costs.  Now no business can cost cut their way to profitability.  But by the same token, waste and excessive internal costs for any business can eat away any profits that business is enjoying.  So to get ahead in a competitive business environment, both methods must be employed.

When a business turns its eye to cost cutting, there is a stated or unstated business objective that the business owners will discover significant bleeding of revenues that are going on within the systems of doing business.  So if those systems can be improved to eliminate that waste, the business would literally make money from the inside out because the overhead of the business would drop so dramatically.

The usual progress of such a cost saving campaign by a business is to find “the low hanging fruit” first.  By that we mean that in order to satisfy the demands of management, middle management will identify superficial savings in hopes of satisfying the requirement.  Hence switching from disposable cups to mugs or cutting back on break room amenities often go on the chopping block first.

Sadly, while there may be some superficial savings to be found in such places, the significant introduction of efficiencies for any business lie at a deeper level and take a more in-depth process of locating problems with how things get done internally.  The methodology of finding these “money pits” within a business is often called “Process Improvement.”  The concept of process improvement is to diagram a particular business process from inception to completion and document the stages it goes through, the handing over of authority for the process and to pin point places where inefficient methods are causing excessive cost in executing that process en route to the final stage of process completion.

Routinely, the areas of business structure that most often identified as being candidates for a process improvement examination are…

*    Excessive overhead between departments.  Departments within a business are notorious for taking on the atmosphere of a fiefdom and becoming resistant if not suspicious of other departments in the same company.  When that happens, department managers will introduce paperwork and unnecessary processing to cause “work” to move to his or her department from another or for completed jobs to continue along their path.  This excessive overhead can be costly at the department level and bog down the business as a unit enough to actually reduce the profitability of the organization.

*    Communication problems.  A business process moves through the organization as each department or entity adds value to the process through to the completion of the job.  However if communications between departments or people along the process chain are flawed, a process can grind to a halt and wait for hours if not days before the missed communication is discovered and the work is put into the cycle to be completed.  This slow down or break down in communications can be a tremendous drain on the company.  To correct the problem, modern tools of communication should be reviewed so each significant person along the chain is quickly made aware of work that needs to be done and can signal to the next agent that their step is complete and that the process is moving to the next stage.

*    An inefficient IT infrastructure. Out of date computer programs that are not integrated with each other cause needless work to be done to take data from one system and moving it into the next computer program only to be entered again at the next stop along the chain.  Standardization and integration of data and systems will introduce huge efficiencies to the process.

By streamlining the process of moving a business requirement from inception to conclusion, we can remove much of the inefficiency and waste that has become inherent to that process.  We can introduce up to date integration designs both at the IT and process level to quickly move the process from one department to the next upon completion.   The outcome is a streamlined organization that is no longer “bleeding money” due to inefficiencies and as such is making money “from the inside out”.

Perhaps you have followed the trend in business to create an internet web site for your business that can be used to supplement your marketing efforts.  If so, you have joined the momentum to create a corresponding “place” in cyberspace that can be used to reach customers online.  The need for such an internet presence is entirely market driven.  Internet sales have soared, particularly in certain market segments and more and more, the first place people go to in order to learn about your business is the internet.  If they find a well designed web site that is full of features, that works fast and draws them in, that can be a tremendous tool for promoting your business.

When you set up a marketing tool outside of cyberspace, the first concern is how will that new marketing effort get noticed.  So we are drawn to places where there is already an active traffic of people who would qualify as our customers.  That may mean putting up a billboard where it will be seen by people going to work.  That target audience may be the best population to respond to your message.  Or if your business appeals to youth, advertising on MTV or on popular radio stations is a natural place to put your marketing money because the traffic is already there.

We have to approach the internet differently.   Yes, the traffic is already there but we have to enter the world of cyberspace marketing with a different kind of strategy so we can reach the customers who are traveling certain “internet roads” and make sure those roads lead to our web site.
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Recruitment of top notch young talent who can enter your work force and provide that kind of long term growth potential and can only come from a smart and productive staff is always a challenge.  One of the big reasons any business works to keep its public image high and to project the concept that they are an employer of choice is to recruit the best and the brightest from the youth ranks.

Young employees bring a lot to a business that can compliment an older work force and make the business much more vital.  Younger employees are savvy to the wants and needs of their peers.  So instead of trying to guess how to market to the current generation of 18-28 year olds who are the age segment with disposable income, by keeping such employees on staff, you have the inside track to the priorities of the current generation.  Further youthful employees are often optimistic and out to change the world.  Their sense of mission and belief in the system as a means to make the world a better place results not only in a better morale internally but in business philosophy that shares those values.

The tendency to name the upcoming generations can be a bit trite but it helps in knowing who the target group for recruitment are.  And that group of youthful future employees that will be hitting the job market in the next few years has been dubbed “the millennials”.  And despite the traumatizing events of world terrorism, war and the decay of the environment, the millennials come to you with that youthful enthusiasm and desire to make a big difference in the world that sets them apart from previous generations.

To lure the brightest minds coming from the nation’s colleges, some rethinking of what we put in front of these young people is in order.  They are not leaving academia strictly with the objective of making a lot of money.  So to turn the head of youth workers who can make a change for the better in your business…

§    Don’t just make the potential job about money or your recognizable business name.  The reputation of the company can be as much a negative as it can be a positive.  The millennial recruitee will look past the sign on the building at what the company is really all about.

§    The millennial is more internet savvy and wants to use modern technology to accomplish business goals.  It’s in our best interest to facilitate that goal because it will keep us in touch with the marketplace.

§    Corporate culture is an important factor for both recruiting and retaining good employees from this generation.  Millenials are looking for a business climate that is creative, able to change when new things become available, highly accessible upper management and responsive.

§    Corporate values mean a lot to the millennial crowd.   That means that those high minded values printed on posters and plastered all over the Human Resource department have to actually mean something.  By demonstrating that the business lives up to its ethics and values, that will appeal the idealistic side of youthful workers.

§    The values that the business supports must reflect a modern attitude toward diversity and “going green”.  If you walk a millennial around the office during his or her interview, they will notice the recycling bins scattered about.  They will notice the diversity of culture and race in the employee mix.

§    Be prepared to recruit from various disciplines.  Even if you are recruiting for a financial services function or some other specialization, keep your mind open to recruiting students with a focus on liberal arts or teaching.  These millennials can be trained to the specific job and they bring a fresh approach to the job description that comes from their college area of focus.

These are things that might take time to change if the corporate culture is behind the times.  But it’s worth the effort to start now to attract the kinds of workers that mean long term growth for the company.  By doing some serious analysis on how up to the date the business is, you can begin to affect change now so by this time next year, you will be in better shape to court the millennials.

In January of 2007, the federal government raised the national minimum wage.  This was old news in some states where the minimum wage had been raised months before congress took action.  No matter how you look at the increase in the cost of labor, it is going to have an impact on the business climate and on how businesses will make key decisions in 2007 and going forward.

In theory a raise in the minimum wage should be a nonevent economically.  It should be a simple adjustment for inflation which the business has already adapted to.  In fact, as inflation raises the cost of goods and the prices the business charges, one might expect the wages of workers to rise naturally to match that upward slope caused by inflation.

How you view the good or the bad of the minimum wave increase may depend on which side of the fence you reside, the employer side or the employee side.  To the employer the rise in employee costs makes doing business more expensive and affects the bottom line.  To the employee, the employer is just being competitive and paying his or her employees a salary that they can live on.  In many cases, you may be on both sides of the issue if you own or operate a business but have people in your family who are trying to get by on the minimum wage.
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Every now and then a business book comes along that revolutionaries how the business world views an area of focus.  One such book had the amusing title “Who Moved my Cheese” by Spencer Johnson.  This short book that is illustrated like a children’s story has some profound ideas in it that will radically change how any business approaches the marketplace.  It is a book that has had his biggest impact in helping employees who have been displaced view their job change.  But the ideas that are made simple in “Who Moved my Cheese” can impact virtually every area of business dealings.

The book communicates its message through a story of a mouse who finds that the place where he can find his cheese is no longer reliable.  The mouse’s friend continues to go to that same place to find more cheese only to continue to get hungrier and hungrier.  But the hero of the story finds the new location of his cheese.  When he finds his new source of cheese, he not only is astounded by the bounty but that even after telling his friend of the new source of cheese, that friend continues to insist that his cheese will be there where it always had been before and that in fact, the hero of our story is mistaken about the new location of cheese.

This, obviously, is not a tale about cheese location.  It is a parable of how to handle change.  The core value being taught by “Who Moved my Cheese” is that we cannot always look to the same resource for our supply.  Markets dry up, businesses go through slumps and have to lay good people off and revenue streams change.
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It doesn’t take a lot of research to find out that in this day and age, virtually every business of any real size has developed some form of internet presence.  Now, for many businesses, that may mean little more than an online business card that can be used to get the phone number and store location of the business into the mind of the prospective customer.  But in this new century, the idea of having a business without a corresponding web page to support it is pretty much out of the question.

But if you look at the two business worlds, the internet business environment and that outside of cyberspace, there are some pretty big differences.  While many companies like bookstores or concert ticket promoters have learned to build what might be viewed as parallel universes in which their business operations are just as sophisticated online as outside of cyberspace, other businesses have just not found that balance.

But as the legitimacy of the internet as a valid marketplace and business tool becomes more understood, more and more businesses are learning that cyberspace can become another valuable part of an overall marketing plan that drives business to the store shelves directly from their internet web presence.
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The MBWA method is a management concept that has gotten a lot of “buzz” and popularity in the last decade or so because it is part of a business model for cultural change within the enterprise that has proven successful in a lot of businesses.  The original concept was created by David Packard during the early days of the Hewlett Packard organization, a Silicon Valley company that was well known for its loyal and highly creative employee base that seemed to achieve levels of productivity and employee satisfaction far beyond the norm.

“The HP Way” which the “management by walking around” method was a part of was based on the concept that employees, particularly the subject matter experts in their fields, are capable of being part of the problem solving process and that a team approach to creating new business ideas and innovate ways to solve problems was far superior to the “top down” approach of management coming up with all the answers and dictating them to a mindless but obedient staff.

Packard was a believer in the open space, no walls and easy access to management corporate culture that MBWA exemplifies.  By enabling frequent and unscheduled interactions between employees and between management and staff, new ideas were given maximum opportunity to be birthed and encouragement to be developed which leads to a more responsive and flexible business culture and one that has a robust approach to growth and change.
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