By Mark P. Dangelo
Just look around. The stats and stark realities are everywhere – approximately 3 million jobs vanish, up to $40 trillion of global wealth lost, thousands of billions in pledged worldwide government spending, and a pessimism that is as vicious and perverse as it is severe.
Factor in the $50 to $75 billion in global fraud that is being revealed coupled with public handouts to “bailout” poor business practices, and there is little likelihood that “big business” will be the engines needed to drive growth in 2009-2010. More than likely, these now quasi-government institutions will be substantial sources of job losses during the next 24 months.
As a substitute, 2009 -2010 will witness the meteoric rise of the micro-business linked under integrated banners to meet changing world and consumer needs. There importance grows from the perishable foundations of monolithic, ineffective business operations that have decayed beyond their ability to repair themselves, and raise huge sums of capital needed for innovation supporting new consumer compositions.
Commonly linked micro businesses also can survive the global protectionism that will be forthcoming as trade agreements are revised and nationalistic demands and tariffs are expanded (e.g., India, Russia, EU, U.S., South America, et al). Moreover, huge Keynesian promotions will seek to benefit local, nimble domestic institutions and “disadvantage” those multi-nationals that call a foreign exchange home.
The dawn of the fifth iteration of globalization will yield a new age of micro businesses that are linked underneath a common operating umbrella. Analogous to what Amazon and eBay did for the retail industries over a decade ago, the winners of 2009 and beyond will be those enterprises that band nimbly together using an orchestrated, collaborative approach to solve today’s challenges.
The benefits of integration with a micro business suite are growing as 2009 kicks off. With widespread unemployment and fear gripping executive offices (i.e., deer in the headlights), micro-businesses offer great advantages for existing operations. How?
· The once sacrosanct core structures and margins may be considerably improved using micro-businesses as compared to the comprehensive costs of internal hiring, retaining, or firing of FTE’s.
· There is a greater flexibility with client pursuits and staffing outcomes to reach operational goals, initiatives, or consumers.
· Faster market response time and integration of highly specialized skills (e.g., risk management).
· Improved accountability for the “micro team” given their specialized composition and defined goals — much like a surgical operation.
· When the goals or needs change, the organizational burden is minimized – e.g., specialized accounting analysis for FDIC regulations on using TARP funds (e.g., sources, uses, analytics).
· If the endeavors / pilots work out, there is an ability to hire discrete employees or purchase the micro business for longer term expansion.
· It increases market presence for a minimal risk – thinking outside of the box while allowing relevant innovation into client and consumer interactions (i.e., think holistically, act discretely).
· Micro partnerships represent the rehabilitation of markets and offerings for established organizations.
· The client offerings today and tomorrow are about interconnectivity of ideas needed to address and solve specific and immediate challenges – not just strategy or outsourcing.
· Just as micro financing has spurred great success, micro-business integration will also be favored in the new operating climates both domestically and globally. It has become politically, economically, and ethically correct.
There are many additional discrete benefits that can be added and niches that could be highlighted. We’ll leave those for another day and your specific circumstance. However, don’t confuse loosely-coupled micro-business integration with traditional partnerships, collaboration, or joint ventures. They are light years apart. A real world model of micro-business integration success can be found with established, large (and profitable) Asian orchestrators like Hong Kong based Li & Fung. It is apparent that the East has much to teach the West.
It should be noted that the use of micro-business integration involves an experimentation paradox. What works and who works well together won’t be fully known until the integration efforts are underway. Options available are frequently never known unless an open and candid dialogue is undertaken with various micro-businesses and the client / consumer prospects themselves. A risk many domestic management teams do not comprehend – hence that is why they are inherently disadvantaged especially during a deep, long recession.
What is certain as pundits and vendors discuss “leadership” and “innovation” in the media, is that the new rules of engagement will be written by others – the micro-operators banded together for a common cause. The old discussions just don’t have much efficacy anymore. The year or perhaps decade of the micro-business has begun.