Creative Destruction


Technological discontinuities, regulation and deregulation, globalization, changing customer expectations, and macroeconomic, social, or demographic changes are sources of innovation. Biotechnology, the web, fiber optics, digital movies, cable modems, massively parallel processors, and electric cars are all technological discontinuities of some sort as they offer an order of magnitude performance advantage over previous technologies. They also result in some sort of capabilities obsolescence. Such changes where an old order is destroyed by technological innovation is creative destruction.

Customers demand and expect certain levels of quality and price versus performance in the product that they buy. For various reasons, firms are no longer limiting their activities to their country of origin. Social or demographic changes, such as the changes from planned economies to capitalist ones, are also discontinuities. These are all sources of new ideas to profit from.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Approaches to Change


Axelrod discusses in his book titled: Terms of Engagement, four approaches to change: i) Leader-driven approach, ii) Process-driven approach, iii) Team-driven approach, and iv) Change Management approach.

Leader-driven change is more suitable for small and medium enterprises with owner-managers. This approach works well when the manager or leader has all the necessary information and knowledge. Leader-driven changes tend to be directive and non-participative. Therefore this approach is less suitable when: a) the workforce is young and/or highly skilled, b) the business environment is complex and dynamic, and c) successful change requires active involvement of a number of people in the organization.

Process-driven changes are led by experts or outside consultants and supported by the leader; these changes are more common in large, bureaucratic organizations. This approach works well when the change requires technical or specialized expertise. Also being directive and non-participative, as in the case of leader-driven approach, this approach is therefore less suitable when: a) the workforce is young and/or highly skilled, b) the business environment is complex and dynamic, and c) successful change requires active involvement of a number of people in the organization.

Team-driven approaches are most common in large, manufacturing enterprises that have skilled and educated employees. Change management strategies—such as TQM, Quality Circles, and Six Sigma—exemplify this approach. These are highly participative change efforts that empower employees and provide them with involvement, participation and ownership of change. Team-based approaches that are properly executed can unleash enormous levels of employee energy and motivation. This can, in turn, lead to innovation and productivity gains. However, using this approach can also cause some discomfort for managers in an organization because they may not be used to sharing their power and authority with workers. Moreover, this approach requires managers to shift from a directive, authoritarian style based on power and expertise to a participative style based on persuasion, coaching and helping. More importantly, the team-based approach to execute change requires the establishment of a ‘parallel organization.’

The fourth approach to change is called the Change Management approach. This is a combination of expert-driven and team-driven approaches. Whereas the former provides a business and technical focus to change, the latter generates ownership, involvement and commitment. So as to gain this commitment, most specialists, experts and change management consultants have incorporated the parallel organization concept in their process-driven approach. The Change Management paradigm is the approach to change that most organizations use today. Although it seemingly seeks to integrate ownership of change with practical business focus, the Change Management approach has shortcomings. Instead of involvement and commitment, this approach breeds cynicism, bureaucracy and resistance. It actually disempowers employees, by reinforcing hierarchical top-down management.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Marketing Communication


Communication is a constant activity. It is universal and essential feature of human expression and organization. Its scope is as broad as society itself, for every social act involves communication. Communication is concerned with sending and receiving knowledge, ideas, facts, figures, goals, emotions and values. It is much more than an occasional technique employed to convey a message. It is a ceaseless activity of all human beings, and therefore also of all human organizations. Communication is also a central element of the way in which people relate to and cooperate with each other, interpersonal event which is the building block of society. Individuals not only send and receive information in order to cooperate, but parallel with this individuals are constantly communicating their self-images to all around them. Whether we like it or not, whatever a person does as a social act will be observed by others, and is therefore a communication about themselves.

 Communication is more than a marketing tool. It is also an important basis of culture. It has fostered language and music, literature and philosophy, science and poetry. So in one sense, communication can be viewed as neutral and benign, a form of human interaction which helps society and the organizations within it to work well, and which can only benefit those who take part in it. This would be a reasonable approach to a definition if every communication included everything that could possibly be said on a subject, but of course this would be impossible. Communication is a selective art, as important for what it does not convey as for what it does convey.

 Communication is also a human skill, so it is concerned with the state of mind of the communicator, and with the state of mind of the person intended to receive the communication. Communications objectives are often specified as outcomes of attitude change.

 Does this mean that marketing communication is propaganda? To qualify as propaganda, business communication must be seeking to influence the emotional attitudes of others without allowing them to make an effective or rational choice. This is never the situation in business, where in every market there are competitors, and for every product or service there is an alternative or substitute. Indeed, the existence of competition is now arguably a necessary precondition for business strategy. Communication by a business is a creative form of differentiation, always competitive, always seeking to persuade customers, shareholders and employees that its own market offerings are the best choice available. That is the sales pitch of the marketplace, not the imperative of propaganda.

 My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

The Planning Process


There is nothing mysterious about the planning process, since planning is something we all do everyday, often without even knowing it. The planning process parallels the decision-making process; this makes sense, since developing plans involves deciding today what you’ll do tomorrow. Both involve establishing objectives on criteria, developing and analyzing alternatives based on information you obtain, evaluating the alternatives, and then making a choice.

The planning process is basically the same when managers plan for their companies, but there are two added complications. First, there’s usually a hierarchical aspect to management planning. Top manager approves a long-term plan first; then each department creates its own budgets and other plans to show how it will contribute to the company’s long-term plan.

Second—and especially in big companies—the planning process may be quite formal and involve much interaction and give-and-take between departments and a group we might call “corporate central.” In other words, in many firms plans are bounced back and forth between the departments and a centralized planning staff, whose main purpose is to review and help define the plans of each department.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Product Life Cycle


Once the market has emerged and a firm has decided to enter, it must still contend with uncertinities in the products in the market. The marketing literature offers a parallel to the technology life cycle: the product life cycle. A product has four predictable stages with distinctive characteristics, marketing objectives, and strategies. The introduction stage starts when the new product is launched. Sales are low, costs per customer are high, profits are negative, customers are largely lead users, and competitors are few. In the growth stage, sales rise rapidly, costs per customer start to drop, profits start rising, and the number of customers also increases. In the maturity stage, sales peak, costs per customer are low, profits are high, and the number of competitors is stable. In the decline stage, sales start to decline, costs per customer increase, profits arte declining, and the number of compititors is also declining. These characteristics call for specific strategies. For example, in the introduction stage, a firm’s objective is to create product awareness, and product strategy is to offer a basic product. The demand in each market is fulfilled by a seriies of different generations of products, with the first one introduced at the emergence of the market.

 

The main drawback in using the product life cycle to reduce uncertainty is that number of stages and duration of each vary from product to product. It is also difficult to tell when a stage starts and ends. In any case, they provide some regularities to help a firm know when and what to invest in an innovation.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight