I was invited to speak to a group of busness incubators from all across US and Canada. My goal was to cut to the point to show them what is needed to qualify as a viable strategy for any start-up 1/ it must not be subject to the same economics as the dominant players, otherwise there is no reason the world needs another start-up. 2. it must answer to very specific customer unmet needs 3/ it must have a purpsoe. A strategy without a purpsoe is like a computer without an OS. I shared my 70 slides power point with them. Unfortunately not much time for interations as I needed to be back in the office.
Before you talk about game-chaning strategies, think what you propose to do would impact your busines model or the industry architecture? How you turn the strategic assets of big competitors into strategic liabilites and how to leverage your strategic agility so their scale advantage is disminishing. Large multinationals not only have challenges with their legacies, they also have a motivation and mobilization challenge. The cubicles and business processes are designed to reduce individual’s imagination to ‘zero’ and these incentives (bonus etc.) are hardly as powerful as other intrinsic motivation. Companies need a purpose or people won’t feel intrinsically motivated on the works that they perform beyond getting a pay check.
Communities of purpose are the business backbone of the 21st Century and this does not end with companies’ employees or suppliers, it also extends to customers. It has profound and far-reaching implications for how companies should be organized to benefit from how value is created and distributed. It makes many management theory looks outdated (and many are very outdated). Any start-up or large enterprise that can consistency maintain a community of purpose would unlock there the true potential of an organization. I think many social enterprises will have an advantage both in attracting talents and customers, and eventually capital markets.
And to clarify, when I say social enterprise I don’t mean just co-ops, or quasi non-profits, I mean privately owned companies with policies on corporate social responsibility as part of their business strategy. It is a particular type of business or value creating activity that sometimes gives rise to distinct organisation forms reflecting a commitment to a social cause working with stakeholders. It’s business objectives is still to mazimizse profits well still aligned with core values. Whereas conventional businesses distribute their profit among shareholders, in social enterprises the surplus (or a meaningful part of it) tends to go towards one or more social aims which the business has - for example education for the third world,women empwerment, environmental issues or for animal rights.
The question of what percentages of profits can be retained for future use? Or for redistrubution to shareholders? Should they enjoy some kind of tax incentives? Can they be public? Can they acquire non-profit and turn them into for profit? And do we need tp adapt a broader definition which is independent of any legal model. This latitudinarian definition could include not only companies limited by guarantee, and industrial and provident societies but also companies limited by shares, unincorporated associations, partnerships and sole traders. It is complicated.
