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The Business Challenges of Globalization

October 18, 2017 Leave a comment


 

Taken from Creating New Superstars by Carol and Ennio Fatuzzo (1)

 

IMG_0065In 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.

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A War Memoir Revisited: “The Death of the Julia Division”

August 31, 2017 Leave a comment

A TRUE WAR STORY BY GIACOMO FATUZZO

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In late 2014, we published the English translation of Giacomo Fatuzzo’s war memoir, “The Death of the Julia Division, Memoirs of an Officer.” This true story is the devastating chronicle of the destruction of the 3rd Alpine Division Julia in Italy’s war against Greece in 1940. It is an emotional, first-hand, day-by-day description of the challenges, the suffering endured, and the battles fought.

Giacomo’s moving words show 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; the commitment of a soldier who does his best in impossible circumstances and who suffers tremendously, as do all of those involved.

In Giacomo’s own words, on a lonely Christmas Day in the middle of a battlefield:

“I have sad thoughts. Who said that war is the mother of all things and of all things the queen, which sifts out the gods from the men, the slaves from the free? Heraclitus?

Here war does not sift. It mows indiscriminately, especially among the poor devils, and it is not the mother of all things. It generates only blood, pain, tears, and despair…

War sifts and devours the best, the most generous, the bravest, the most patient. But among those spared, there are still many who are generous, brave, and patient. They will remain in their positions and still will be the first to be engulfed in the furnace.”

And there is more. The reader journeys alongside Giacomo as he raises questions of loyalty to one’s country and to his men. The book forces the reader to grapple with haunting questions such as: “Who is responsible in time of war—the nation’s leaders who declare the war or the soldiers who fight it?” And, “As I look at the carnage I begin to wonder how hatred is born.” 

As you can see, “The Death of the Julia Division” isn’t a typical book about war. It is a beautifully written, emotionally moving work of art that raises timeless issues. If you are interested, this book is available from amazon in both paperback and kindle formats at http://amzn.to/2jAi45r.

For more information about “The Death of the Julia Division” and other books written by Giacomo, Ennio, and Carol Fatuzzo, visit our website: fatuzzobooks.com.

Thoughts on Business Leadership

January 18, 2017 Leave a comment

 

Thoughts on Business Leadership

by Carol L. Fatuzzo and Ennio Fatuzzo

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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.


 

 

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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

 

 

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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