… a continuation of garryoskamp.com

What are business people talking about when they discuss a “business model?” The Harvard Business Review, Forbes Magazine, Foreign Direct Investment, The Wall Street Journal, as well as other notable periodicals  continually discuss the concept of one’s “business model.” What exactly are they talking about? Many of the business gurus of the current day have offered their own unique definitions:
 - Peter Drucker said it’s:
  * Who is your customer?
  * What does your customer value?
  * How do you deliver value to that customer at an appropriate cost?
 - Others have said a business model is a company’s approach to delivering a value proposition to a customer segment at a profit.
 - Some say it’s the logic of a company. It’s how it operates to create value for it’s customers.

It seems to this author that for some time businesses have spoken of business modeling but have actually addressed business strategy. The difference is that the business model is the “why” or “purpose” of a business, and business strategy is the “how’ of delivering one’s product or service. One of the most ubiquitous examples of this difference lies in the many professional sports teams which exist in the United States and other countries. Choose your favorite sport, and then your favorite team in that sport. Why do you love that sport and that team? My wager is you see yourself in executing the moves, plays, and scoring executed by your favorite team. You tune in when your team plays. You go to see your team play live whenever possible. You wear specific team emblems on your clothing, and even paste your team’s stickers on your vehicle(s). Why do you do this? Not because you know or even understand the team owner’s efforts and actions to make this team profitable (business strategy), but rather because you identify with this particular team on a visceral level (business model). Smart team owners understand that they are selling hero worship, and that the team which moves its audience emotionally will sell more tickets, more TV royalites, more clothing, more of everything.

If you can picture Henry Ford rolling his first Model “T’s” and “A’s” off the production lines, you can picture his business model: to make the automobile affordable to virtually every household in the country. This was a business model, and it worked. He spoke to a need and buyers responded in mass.

I have a coaching client who could teach business modeling. She literally jumps out of her seat with excitement of her “why” or “purpose” of being in business. Now she’s worked very hard on her business strategy, but her business strategy would be worthless if  it was not fueled by her business model. She is filling a need, and her excitement fuels and sustains her. In truth, the message I’ve hoped to describe is “Find your ‘Why’ or business model, and your business strategy to support your passion will appear to you.”

The first I heard of a meeting change was Tuesday afternoon when my cell phone began to ring as I was speeding South on the 405 to my next appointment. My assistant screamed into the phone, “Where are you? Everybody’s here but you.” And where is “here” I said. “Here is Don’s office (a major client of mine). Don’t you remember, he wanted you to assist him in interviewing several candidates for his open position in marketing?” “Ah, well, no, I don’t remember.” I furiously checked my calendar while doing 80mph so’s not to get run over from behind on one of the busiest of L.A. freeways. “Er, no, I have that meeting this coming Thursday.” “Oh no, she said, that meeting was moved to today, and you were notified by E-mail.” “Ah, I was?”

Ever have this happen to you? There’s absolutely nothing you can do to move a hundred miles across LA freeways at warp speed, and make yourself suddenly appear in the next minute in a meeting you should have known about. Yeah, not much fun. Good clients are hard enough to come by, and when you disappoint one of them, you just want to do the ostrich thing and hide in the sand. So after my appointment with a different client, I had plenty of time to think about what went wrong on the long drive back to the office. The appointment had been booked the week before, so how did I miss a change notice. After returning to my office and discussing the chain of events leading up to this fiasco, interestingly, we determined that the culprit was language.

Now how can the culprit be language? Simple! I grew up in a business environment devoid of cell phones, instant messaging, or even the internet. If you wished to reschedule a meeting, you, or your secretary, telephoned the other party, (or his/her secretary) and verbally made the change. But then, I’m a dinosaur. I’ve been in the business world since Elvis was doing Vegas. Any number of business leaders today are 30, or even just shy of, and they rely explicitly on electronic communication. How many times have you questioned a subordinate about sending a notice, and the response is, “Yes, I notified him/her.” THAT DOES NOT MEAN HE/SHE TELEPHONED ANYONE. It means he/she sent an electronic notice of some sort….E-mail, messaging, something. In the vernacular of the younger entrants into the business world, that is communicating.

So who is at fault? Or is anyone at fault? At the risk of losing my senior readers, the fault lies with us. Younger people communicate electronically just as we communicated in our age by telephone. Remember when getting your own phone(we never did!), as a teenager, was  just a dream? Well, these younger folks have their own language by which they communicate, and we had better understand it. When an employee says he/she sent a message, ask to see it. Is it electronic? Do your files have a record of the communication for purposes of continuity? Have you trained your employees in properly documenting a client file so that another employee can pick up the file and answer questions in the first employee’s absence? Yes, this is our responsibility just as much as if we placed a satellite office in a foreign country. We must learn their language and we must teach them good business practices of client file maintenance.

What is the purpose of education? Is it to be wise or is it to be educated? What is the difference? Wisdom is the knowing what to do, say, or be before the event or events come to pass. Webster’s says that is “exercising sound judgment.” Yet how does one exercise sound judgment without the benefit of experience. Obviously, one cannot. So how does education play into this equation? Education is simply the learning of facts, events, and relationships which may be useful in one’s future. If you subscribe to the statements thus far made, then it seems reasonable to postulate that if one is educated, one has the advantage of knowing certain facts, events, and relationships which may be useful in one’s advancement toward wisdom. No guarantees are given. Indeed, we all have encountered educated idiots. Nonetheless, it is the hope that by acquiring an education one will make better decisions throughout one’s life. For this hope, if for no other reason, this author supports education. However, as we go forward, education must be looked at through the critically austere glasses of the business world….what do you bring to the table?

The National Inflation Association forecasts that over the next several years, that a “college bubble” will burst and the impact will be grevious to the world economy. For decades now young people have been told the way to financial independence is education. Colleges and universities across the country have benefited from this counsel and have continued to raise their tuition, build bigger college sports stadiums, expand cirriculum, and publish self-serving studies professing higher starting salaries and wider choices resulting from having a college degree. In the 1940’s, 50’s, 60’s, and even into the 70’s this was true. It is no longer true. Now don’t jump ahead of me. I’m not saying education is bad. Indeed, education is a good thing…………….if it improves the plight of the individual as well as the economy. Education in the United States no longer provides such improvement to the economy, but especially not to the individual.

Many young people attend college thinking that a college degree will help them find a job. If this is the thinking that your children have, please educate them about the realities of life. College is education. Education is only valuable if it teaches you to do something. If you, or your child, have a burning desire to learn how to do something, please stop reading now, and enroll in college. If you are attending college to show a prospective employer that you have successfully completed a college program, quit now, and start as an apprentice in the field of your choice. If you are attending college to mark time until you grow up, quit now, and apply for service in the military.

In rereading my words, I feel rather taken aback by my disparaging reflections on college. Let me clarify my feelings here. College is wonderful. It socializes one. It causes one to grow up if there is a personal output of effort to obtain the college degree. College gets one an interview to enter a company which one would not have otherwise obtained. But college is only the obtaining of education. Life pays for performance. If a graduate cannot apply that acquired knowledge in a meaningful way, the achievement of a college degree is meaningless.

Researchers have long attempted to measure one’s critical thinking and reasoning abilities by creating instruments of measurement. Such measures have been the Stanford-Binet Intelligence Scales, the Weshsler Adult Intelligence Scale, and the Binet-Simon Test. Historically, such measures have been used to predict the success of one in a future activity, especially employment. Such measures have been mildly successful, but no where near to the degree first predicted……why?

It’s quite simple really, intelligence as predicted by the aforementioned assessments is an indicator of one’s ability to observe a situation, take in facts, and determine the most advantageous course of action. If we each lived in vacuums, one’s Intelligence Quotient (IQ) would be a splendid predictor of one’s success in virtually any field of endeavor. Industry, government, society, all would be subject to the ability of each individual to reason and draw conclusions unaffected by the behavior of other individuals. Alas, we do not live in such a clinical environment. We are, indeed, impacted by the thoughts, values, behaviors, and actions of others. For this reason, one’s primary IQ is far less important as a predictor of success than one’s Emotional Quotient (IQ).

Think about this in the workplace. How many people, as a percentage of all who are “let go”, are released for the inability to do the job? How many people, as a percentage of all who “quit a company”, do so because they can’t perform the assigned tasks? Think back to situations you have experienced in which a co-worker left the company. I’ll wager the leaving was not because of an inability to perform the tasks at hand, but rather because the person did not “fit’ with the culture of the company or the culture was not welcoming to that individual.  In brief, it was because of EQ not IQ that a parting of the ways occurred.

So what does an employee, hiring manager, or company do about such a situation? The answer is when the individual is an applicant or prospect. The first hurdle is IQ. Make sure the individual is competent from the prespectives of mental ability, education, and interest to perform the tasks involved. But the the real challenge is to determine if that individual is equipped to work and relate to existing and future employees at the level required for the successful performance of tasks in the department for which the applicant is being considered. The making of a decision to hire or pass on an applicant can be facilitated by the taking and interpreting of various assessments. These assessments provide information about an individual which is crucial to the hiring decision.

To summarize, use assessments to gain information of how a prospect may behave in the future, but, more importantly, use the assessments to open dialogue with the person applying for the position. Ask open-ended questions. Allow the applicant space to provide insights as to how his/her thinking process is structured. Use oblique questions which require opinions and judgements on the part of the person in question. Assess how those responses might work with current employees, and with you, if you are the prospective supervisor. Ask the prospect to ask any questions of you.  After the interview, write up your impressions. Put the document away. Then pull it out in 24 hours and read it. Do you feel the same way? If you do, your original feelings are pretty safe to be your true feelings. There is no crystal ball. Every decision has risk. Once you have allowed the information and your feelings to jell, make your decision, and go with it. Time will tell if you have chosen wisely. In the mean time, give whichever aplicant you hire the widest opportunity for success, and trust that you will not be disappointed.

What have you noticed lately about Starbuck’s, the Coffee Depot, or the Coffee Bean? Yep, many of the folks taking up valuable overstuffed chairs, semi-private alcoves, and miniature tables are not just on “break.” They’re actually working! Laptops are out, notes are scattered, and even face-to-face meetings are in progress. Do they buy? Yes, they buy drinks, snacks, and meals all purchased to somehow “rent” the space they’re taking up in the franchise-holder’s business. Do the proprietors complain? No! Franchisees are betting-on-the-come that crowded shops will attract more consumers than empty shops. The jury is still out on that one, but I’ll bet studies are already underway to weigh in on that question. Do the patrons complain? No! The act of going to a place where work is being done, and yet where one has not been ordered to be, seems to have an attractive aspect about it. The herd mentality kicks in, and late-comers seem to prefer to vie for a space to open up rather than go to a less-busy shop with ample space.

Studies seem to confirm that workers who control their work environment, for at least some of their work hours, are more productive than workers who are required to be in a location during specified hours. Many researchers point to study results which identify why remote workers are more productive:
 - fewer office distractions
 - fewer interruptions
 - shield from office politics
 - freedom from constant yet unimportant meetings
 - reduced information overload

Additional studies indicate workers choose to structure their physical surroundings more than previously thought. One may not have much control over the ultimate direction and vision of a company, but having control over one’s own simple surroundings seems to infuse company loyalty and support into the individual. The simplest of changes also appears to enhance a worker’s attitude. The presence of green plants has been shown to make the workplace seem less like work. A change which results in higher productivity. When measured on a scale of “owning” company problems, on site workers and virtual workers appeared virtually the same.

Inasmuch as this is a growing trend, the future may hold a number of changes. First, employers will benefit from the ability to draw from worker pools around the world. It will increase availability of workers, and therefore cause the skills to be hired to be augmented. The reverse, of course, is that workers will be competing for positions with other workers around the globe.  As this growth continues, employee intake assessments will change from selecting employees who can get along with others to those employees who can work independently. Training will evolve to address employees in how to work independently, and to be successful in their work from a distance. At some time in the future, virtual employment will stabilize as a percentage of the work force in that many jobs do not lend themselves to remote work, and never will. Such jobs will include construction, manufacturing, farming, health care, and others.