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The Business Challenges of Globalization
Taken from Creating New Superstars by Carol and Ennio Fatuzzo (1)
In spite of the chaotic world around us, the risks involved in playing some types of games haven’t changed. For example, playing roulette, whether it is Russian roulette or the more civilized version in Monaco, is the same as it always has been. However, in today’s fast paced environment, the “game” of business has become a much more dangerous venture. Developing a new business or expanding an existing one involves a whole new dimension of risk due to many developing “agents of change.” Globalization, including the rapidly expanding global economy and the consequences of global competition, is one of the most powerful influences.
On a positive note, globalization significantly increases potential market sizes, creating extremely attractive and visible business growth opportunities. Just think about the worldwide explosion of smartphones, or the rapid expansion of wine import and export businesses, or the huge potential for new cancer drugs. Even water is now a global opportunity, as the recent history of San Pellegrino shows. Twenty years ago it was a relatively unknown Italian mineral water. Today, it is distributed worldwide to more than 120 countries on five continents. (2) But with size comes different challenges.
Highly visible, big growth opportunities create new global competitors that were never before threats―Korean car manufacturers, Indian software developers, Chinese computer and internet-based companies, and more. The bottom line: More companies around the world are likely to be pursuing the same specific growth opportunity at the same time. Therefore, the risk of failure for any single company is high—significantly higher than in the past.
Looking at the situation another way, in the past a company had a reasonable possibility of being the only one pursuing a good new opportunity—one that was unrecognized by others. And that resulted in many single-company big successes: Kodak and silver halide film, IBM and computers, Motorola and cell phones, RCA and consumer electronics, and more. But in today’s dynamic global economy, due to the growing technical sophistication of global competitors and the faster pace of everything, there will not be many “lone pioneers.”
And there is another kind of challenge. Pursuing larger global opportunities requires greater resources than what are needed to be successful with smaller, “local” opportunities. This results in the financial risk being much higher, sometimes high enough to place an entire company in jeopardy. If a global project fails, for whatever reason, that failure is extremely costly. Kodak having to declare Chapter 11 bankruptcy as a result of its late and unsuccessful attempt to become a major global player in digital photography is a good example of today’s high cost of failure. (3)
But the risk of large financial investments isn’t the only challenge involving resources. In the past, under-resourcing a project or using resources ineffectively did not matter as much as it does today. Why? Any such “mistakes” will slow down progress; and in a faster paced and more competitive business world, this decreased speed will almost certainly create a significant competitive disadvantage. This, in turn, greatly increases the probability of a costly failure in the marketplace.
And finally, because of today’s need for speed, failure is not only is connected to making wrong or bad decisions. It frequently is the result of making good decisions too slowly. Kodak’s eventual management decision to pursue digital photography was a good one, but the delay in making that decision was a major contributor to the effort’s failure. This delay gave global competitors an insurmountable lead.
Bottom line, in a highly competitive, global business environment that is rapidly changing, a slow decision will almost always be a wrong decision; and being late to the market almost always assures failure. Just as in nature, a slow company will become prey for the faster, more aggressive one.
1. Ennio Fatuzzo and Carol L. Fatuzzo, Creating New Superstars: a Guide to Businesses that Soar above the Sea of Normality (USA: September 2016). Available from amazon.com.
2. S. Pellegrino Company Website, accessed October 18, 2017, https://www.sanpellegrino.com/us/en/company-intl-41.
3. Rick Newman, “Four Lessons from Kodak’s Comedown,” U.S. News online, January 19, 2012, http://www.usnews.com/news/blogs/rick-newman/2012/01/19/4-lessons-from-kodaks-comedown; “The last Kodak moment?,” The Economist, January 13, 2012, accessed online October 18, 2017, http://www.economist.com/node/21542796.
Big Data: An Exploding Agent of Change
Big Data: An Exploding Agent of Change
by Carol L. Fatuzzo and Ennio Fatuzzo
Today, thanks to the internet, many kinds of data (Variety) are being sent, received, and accumulated at unprecedented rates (Velocity) in unprecedented quantities (Volume). So, how can we manage this rapidly increasing amount of data and benefit from them? How can we discover hidden patterns and reveal unknown correlations?
Storing such massive quantities of data is only the beginning. To be useful we also must be able to access and analyze them rapidly and reliably. Following is an excerpt from our latest book, “Creating New Superstars,1” which addresses this opportunity.
BIG DATA AND BUSINESS ANALYTICS
“Business analytics refers to “the extensive use of data, statistical and quantitative analysis, explanatory and predictive (computer) models, and fact-based management to drive decisions and actions.2 The rapid development and adoption of advanced business analytics technologies is already altering the business landscape.
Big data refers to data sets too large for traditional data processing. These data sets have the potential for “huge new benefits—but also heartaches.3 The explosive emergence and availability of such huge, fast-changing, unstructured data from various old and new sources, mostly external to a business, and attempts to analyze them, has created the “age of information” ― an age where knowledge is power. But in many companies these unwieldy data sets have also created an “analysis bottleneck” that limits their usefulness.
But now it is possible to combine big data with advanced business analytics. Unparalleled and real-time access to vast quantities of data and the ability to rapidly analyze them in meaningful ways are already realities. Business management is being challenged with the rapidly growing technical capability of harnessing the vast potential that is hidden in multiple sources of massive data/information.
Today many companies already are analyzing big data to achieve significant competitive advantages―to improve products and services, cut costs, attract repeat customers, and more. An IBM Global Business Services Executive Report documents several big successes: “Companies like McLeod Russel India Limited completely eliminated systems downtime in the tea trade through more accurate tracking of the harvest, production and marketing of up to 100 million kilos of tea each year. Premier Healthcare Alliance used enhanced data sharing and analytics to improve patient outcomes while reducing spending by $2.85 billion. And Santam improved the customer experience by implementing predictive analytics to reduce fraud.4
Still embryonic though, are advanced analytical methodologies that can be applied to big data to build useful models for predicting and optimizing future outcomes. Such tools would enable leaders to make better decisions and make them faster and with lower risk; and might even help scientists make fundamental discoveries. This is the promise of the emerging field of data science, the marriage between big data and advanced analytics, the former providing the information, the latter supplying the tools that can be applied to that information to develop insight and guide action.5 However, there is one giant caution for business leaders. Big data and analytics, no matter how sophisticated and expertly used, will not replace or necessarily even predict disruptive innovations. Analyzing the past and extrapolating to the future is not likely to accurately predict a future shaped by unparalleled disruptive and exponential change.”
A CAUTION AND A CONCERN
There is no question that the future benefits arising from the combination of big data and advanced analytics will be immense, but not everything is positive. For example, even with advances in analytics technology, including artificial intelligence, keep in mind the caution expressed above:
“Analyzing the past and extrapolating to the future is not likely to accurately predict a future shaped by unparalleled disruptive and exponential change.”
And for those who worry that big data collection may infringe into their privacy: Yes, large companies and organizations already have access to a lot of personal data and are using it. On the positive side, this is already leading to things such as improvements in healthcare outcomes and understanding new market trends for better business management.
But it is an entirely different situation when governments enter the arena. A number of articles have been written about “big data” in the hands of government evolving into “big brother.” A recent article in the Economist entitled “China invents the digital totalitarian state: The worrying implications of its social-credit project6” illustrates a concerning example.
The article describes a data collection and analysis project being run by the Chinese communist party to develop what they call a “social-credit system.” To summarize, using “big data” technologies, the project’s objective is to develop a system to collect and categorize as “good” or “bad” all available information for each individual citizen. Ultimately, rewards for good behavior (e.g., prizes, better housing) and punishments for bad behavior (e.g., denial of permissions to travel or access to loans and services) would be handed out – all this aimed at improving the allegiance of citizens to the State.
Will China be successful? How far will other governments go towards using big data to become “big brother” watching over each citizen? Certainly valid concerns. However, keep in mind that every breakthrough new technology has the potential for both good and bad. It all depends on the intentions of those who develop and apply the technology.
- Ennio Fatuzzo and Carol L. Fatuzzo, Creating New Superstars: a Guide to Businesses that Soar above the Sea of Normality (USA: September 2016)
- Thomas H. Davenport and Jeanne G. Harris, Competing on Analytics: The New Science of Winning (Boston: Harvard Business School Press, 2007), 7.
- “Data, data everywhere,” The Economist, Feb 25th 2010, http://www.economist.com/node/15557443.
- Michael Schroeck, Rebecca Shockley, Dr. Janet Smart, Professor Dolores Romero-Morales, and Professor Peter Tufano, “Analytics: The real-world use of big data,” IBM Global Business Services Executive Report, IBM Institute for Business Value (2012), accessed June 27, 2016, http://www-935.ibm.com/services/us/gbs/thoughtleadership/ibv-big-data-at-work.html.
- Foster Provost and Tom Fawcett, “Data Science and its Relationship to Big Data and Data-Driven Decision Making,” Big Data, 1, no. 1 (March 2013), 51-59, http://online.liebertpub.com/doi/pdfplus/10.1089/big.2013.1508.
- “China invents the digital totalitarian state: The worrying implications of its social-credit project,” The Economist, Dec 17, 2016, http://www.economist.com/news/briefing/21711902-worrying-implications-its-social-credit-project-china-invents-digital-totalitarian
Thoughts on Business Leadership
Thoughts on Business Leadership
by Carol L. Fatuzzo and Ennio Fatuzzo
There are all kinds of leadership found in all walks of life, and much has been written about what comprises good or exceptional leadership.
For example, our book “The Death of the Julia Division1” is a moving memoir illustrating the struggles of military leadership. It chronicles the agony of a man who doesn’t believe the war he is fighting is justified but fights as hard as he can; the anger of an officer who knows that his superiors are making poor decisions from a remote location but still must follow the resulting orders; and the commitment of a leader who does his best in impossible circumstances for his soldiers and who suffers tremendously, as do all of those involved on the battlefield.
But what about business leadership? We provide some of our own views in our newest book “Creating New Superstars.”2 Following is some background and an excerpt from this book. Not everyone will agree with our opinions, but we hope this provides some food for thought.
Once Upon a Time
Once upon a time, companies developed strategic plans, in some loose fashion inspired by the strategic plans of the military. These corporate strategies commonly were reviewed only once every year because change usually occurred at a very slow pace, and gradual change is very seldom disruptive. In this peaceful time, certain practices became the norm and accepted as the standard for good management, including things such as:
- New product definition based totally on market research
- Extreme delegation to subordinates and teams for prioritizing and implementing programs
- Decisions through consensus
- Forecasting the future based on an extrapolation of the past
The general idea seemed to be that a “dull” and predictable company, managed well, would be a good and successful company. However, today the world is undergoing an explosion of disruptive change, driven primarily by rapidly advancing technology. And in these unsettled times, many dull but successful companies are struggling.
However, there are outliers or rebels—very successful, once small but now large companies where the “rules of traditional management” have generally not been followed, at least for significant periods in their lifetimes. These are the companies we call Superstars.
What is a Superstar
There is a new phenomenon emerging that we call “Superstar” companies. These are the few, extraordinary, publicly-traded, Fortune 500 companies that have managed to sustain exponential growth over more than a decade, even as they became giants. The list of Superstars and almost Superstars includes Amazon, Apple, Alphabet, Facebook, Genentech, Amgen, and Gilead Sciences. What has driven these outliers to such extreme success in the face of explosive change?
Our Views
Although not the only important factors in creating Superstars, the repeated flashes of insight, out-of-the-box thinking and acting, and powerful personalities of the leaders are critical. Such exceptional individuals are not bound by tradition and thus can rapidly adapt to and take advantage of a changing environment. They have passionate beliefs, are intensely focused on their goals, and take pride of being the best in their industry or maybe even the best in the world. And they are dedicated almost beyond reason to building their companies. These unique business leaders are rebels and often considered dictators, and they are shaping our future.
Exceptional Leadership (Excerpt from “Creating New Superstars”)
“Much has already been written about the importance of leadership in general, and the leaders of today’s Superstars more specifically. We highlighted some of this information in our brief histories of the Superstars in Chapter 2. Drawing on this information and our own experiences and research, we provide here a short summary of some of the common leadership characteristics that we believe are essential for Superstars.
First, an intelligent, strong-willed leader whom people will follow (not necessarily like) is required. This leader must be a risk-taker who is unafraid of making mistakes, and who enthusiastically embraces the unconventional, ranging from unusual management styles to untested business models. This leader also must be able and willing to rapidly reinvent (or support and partner with those creative individuals who can reinvent) everything again and again as circumstances dictate—from business models and business definitions to entire product lines.
To say this in a different way, to create a Superstar a leader must be able to think and act “outside of the box.” Does this mean that these leaders have to have that nebulous ability called “vision?”
Our answer is: not always. Remember that some of the “visions” of leaders like Steve Jobs or Jeff Bezos led to actions that were clearly mistakes. But these same leaders also made correct decisions repeatedly, year after year. Clearly, in some cases the vision of a strong leader can create and drive markets.
One last commonality among Superstar leaders. The leaders must have exceptional commitment, persistence, and stamina to be able survive seemingly disastrous occurrences in their business and personal lives without declaring defeat—incidents we highlighted such as getting fired, ending up in hospital for stress, or having to work impossible hours, sometimes for no compensation. How many people are willing and capable to endure all of that to end up winning in business? The answer, of course, is only a few—those few capable of leading their enterprise to Superstar status.
1. Giacomo Fatuzzo, The Death of the Julia Division: Memoirs of an Officer (USA 2014). Available from amazon in both paperback and kindle formats: http://amzn.to/2jAi45r
2. Ennio Fatuzzo and Carol L. Fatuzzo, Creating New Superstars: Businesses that Soar above the Sea of Normality (USA 2016). Available from amazon in both paperback and kindle formats: http://amzn.to/2hAn6dy
Creating New Superstars – Background
Following is the PREFACE that can be found in our newest business book “Creating New Superstars: Businesses that Soar above the Sea of Normality.” It explains how and why this we wrote and published this book.
Book Preface
Why have a few, extraordinary, Fortune 500 companies grown exponentially in revenues (annual growth rates of more than 30%) for at least the last 10 years, compared to a median Fortune 500 company that has grown at a mediocre 3.9% per year over the same period of time? Is the emergence of these giant “Superstars” a new phenomenon; and if so, why? What would it take for existing, healthy companies to achieve similar extreme growth, or at least significantly improve their performance? How can entrepreneurs maximize their chances for creating new Superstars? How can those seeking exceptional careers or investments identify high growth areas? On what types of companies should they focus?
Intrigued, we began a quest to answer these questions and others about extreme growth and highly successful, large businesses. Only later, did we consider writing a book. But why would we write one more business book? The answer is we believe we have uncovered important and exciting new information that can provide insight and direction to ambitious business leaders (both existing and potential). We also feel that our perspectives from the real world of business are a practical complement to advice from the often theoretical world of academia.
Thus we decided to turn the answers to our questions into a book, but what kind of a book? Yes, we wanted it to be a guide for achieving extreme business growth. But is that a book about business creativity and brilliant leadership, or is it one about identifying and building on fast-developing technology super-platforms (what we call “Launching Pads”)?
As we followed the evolution of our identified Superstars, it became clear: both are essential. For example, if the goal is starting a new business, the question of which type of business is obvious. But the answer can be elusive because a “flash of insight” or a “life-changing scientific discovery” or a “disruptive technology” is needed for the creation of a highly successful one. Without that innovation, nothing “big” happens. And that isn’t all. The desire for exceptional results also becomes a question of what kind of leadership is needed to achieve “extreme” success in today’s rapidly-changing, chaotic world.
So, while our book addresses exceptional leadership and the needed revolution in business management, it is just as much about the power of new technology and science. In our fast-paced, technology-rich environment, it is impossible to ignore these forces that are shaping the future for business and for humanity. Successful new businesses and new technologies have become irreversibly intertwined. Because of this, we first focus on the technology Launching Pads that have created or enabled the current Superstars and may still create others. But what comes next? To provide new entrepreneurs, job seekers, and even investors with a head start, we explore several rapidly-advancing areas of science and technology that we predict will be the breeding grounds for future Superstars.
Summing it all up, with its focus on how to identify and/or create highly successful new businesses capable of extreme growth, our book is aimed at job-seekers and investors seeking exceptional opportunities, and at entrepreneurial “free spirits” who are ambitious enough to want to make a big difference, who are willing to take risks, and who are open to embracing new and unconventional concepts and technologies to achieve “far better than average” results.
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“Creating New Superstars: Businesses that Soar above the Sea of Normality”
by Ennio Fatuzzo and Carol L. Fatuzzo
Available from amazon.com in both paperback and kindle formats.
Creating New Superstars
A NEW BUSINESS BOOK FROM FATUZZO BOOKS
In our newest book, Creating New Superstars, we the authors set our sights on the future. Yes we identify and examine today’s Superstar Companies, but our focus is on embryonic new Superstars and the technology “Superplatforms” that will enable them.
Technologies and business – forever intertwined as the future unfolds. Superstar Companies and technology Superplatorms shaping the world. That’s what our book is all about.
BOOK DESCRIPTION
CREATING NEW SUPERSTARS: A Guide to Businesses that Soar above the Sea of Normality by Ennio Fatuzzo and Carol L. Fatuzzo.
“Creating New Superstars” is a book that starts by looking at a new phenomenon—companies that grow exponentially even after they become giants. We call these select companies “Superstars.” More specifically, our book is about how the intersection of explosively advancing technology superplatforms (what we call technology “Launching Pads”) and todays revolutionary “Agents of Change” has created an environment where Superstars can exist.
Yes, the book addresses the needed revolution in business management, but it is more about new technology and science. Why? In today’s fast-paced, technology-rich environment, it is impossible to ignore these forces that are shaping the future for business and for humanity. As we show, businesses and technologies have become irreversibly intertwined.
The book begins by highlighting a few, extremely successful Fortune 500 companies— ones we define as “Superstars” on the basis their continuing spectacular financial results. These Superstars, unlike other large companies, have exhibited exponential growth for over a decade. But such hyper-growth of very large companies is new and very uncommon. How can others learn from their extreme success and the path they have followed? How can potential new Superstars be identified as they begin to develop?
Although there is no single recipe for answering the above questions, the book describes key common factors that led to the creation of specific Superstars—Genentech, Amgen, Gilead Sciences, Amazon and, of course, Apple. Yes, topics such as the act of creation and unconventional leadership are addressed, but the focus is on what we believe to be the most important ingredient—exponentially advancing technology “Launching Pads.” The book describes three current Launching Pads (Microelectronics, the Internet, and Biogenetics) and shows how their symbiotic relationships have resulted in today’s Superstars.
Although understanding today’s Launching Pads and Superstars is interesting, it is not the objective of the book. Rather, we use this information to predict and describe emerging areas of technology and science that have the potential to be “breeding grounds” for new Launching Pads. This includes exploring the possible future impacts (good and bad) of these explosive technologies on the business world, and by implication, on the human race.
Summing it all up, “Creating New Superstars” offers guidance to those who are looking to launch new businesses and to those who are already working in the trenches trying to imagine brighter future for their company. Additionally our book provides insight for job-seekers looking for exciting careers in high growth businesses and for those seeking to invest wisely in the future.
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MORE INFORMATION
Creating New Superstars is available in both paperback and Kindle formats from amazon.com. For additional information and other business leadership offerings from Carol and Ennio Fatuzzo, visit our authors’ Web site: fatuzzobooks.com.
Agents of Change
Agents of Change: Creating a Business World Forever Changed and Changing by Carol L. Fatuzzo and Ennio Fatuzzo
It is no longer business as usual and it never will be. In today’s chaotic environment, only one thing is certain: CHANGE, and more CHANGE, and CHANGE at an unprecedented, ever increasing pace. Already too much has changed to allow business leaders to rely on business practices from the past, even the recent past.
So what should leaders do differently as they attempt to navigate the treacherous path to business survival and success in the 21st century? The answer to that question is not simple, and many leaders are even ignoring the question itself. They are acting as if the key forces driving radical change are no more than background noise.
Therefore, in our new article we attempt to change that mindset by increasing awareness and understanding of what we consider the most important “Agents of Change” and then exploring their impact on today’s business. Areas addressed include “instant” communication, global “interconnectivity,” social media, science-based management methodologies, and sophisticated data analysis. By taking a step back to provide a different perspective and clearer view on what is happening as these forces converge, we hope to create the knowledge and attitude needed to kick-start a revolution in business management.
Some key messages for business management from the article:
- Agents of Change are creating a technology dependent future.
- The pace of change is accelerating and will continue to increase.
- Speed has become the key to corporate survival.
- Global-Sourcing is the business path to the future.
- In today’s global economy, there are not likely to be many “lone pioneers.”
- “Staying the course” is likely to result in corporate death.
- Business management needs to move from its empirical, intuitive world to one based on science and technology.
If you are interested in reading more, this article and others are available for purchase and download from our Digital Store on our Web site: fatuzzobooks.com.
fatuzzobooks.com
Highlights and provides additional information for books and articles written by Carol L. Fatuzzo, Ennio Fatuzzo, and Giacomo Fatuzzo
New: A Novel by Giacomo Fatuzzo
New: A Business Book about Growth and Technology
A Memoir by Giacomo Fatuzzo
A Business Leadership Book
A Business Planning Book
Fatuzzo Books Blog 