Sometimes it is hard to think of business as simple. Perhaps as we have evolved from a production oriented society to more of a consumer and service oriented society we have evolved the notion that business is complex. Maybe it is because of our dependency on the tools and technology now required to conduct business has evolved as has the perceived complexity of the infrastructures that we must have to support them. Think about the power that we now have on our desk tops and in the palms of our hands. Despite all of this, I think that business is only complex if we decide to allow it to be complex, or worse yet, make it complex of our own accord.
Technology has effectively removed time and distance from the business equation. Anyone, anywhere at any time can access a global marketplace where they can “do business” with just about anyone else that they wish. It has also made everyone smarter, in that the only reason for anyone to make an uninformed purchase decision is because they chose not to get informed by using their aforementioned powerful desk top or hand held tools.
But if business is really not all that different why do companies continue to insist on changing and continue to invest in developing and creating new and better products? Why do companies still have sales teams and operations groups and all the other corporate functions that have been the mainstays of business organizations for hundreds of years? If business is really changing then why are so many things about it still remaining the same? When business’s reorganize, they invariably “shuffle the cards” associated with their organizations, but they are still the same cards.
I think it may be in that in its simplest form business is about delivering value. The value can be in the form of a product that can be as simple as a clay pot or as technically complex as a cloud based data storage system, or in the form of a service such as simple as a freshly mowed yard or the complex capability to operate and maintain that cloud based data storage system. The quantification of the value provided is determined by the amount of currency that will be exchanged for the clay pot, mowed yard or cloud based storage system.
There you have it. This is still pretty simple. Business is about exchanging money for something of value. I guess that is actually the definition of commerce, but in this case it is also business.
com•merce/ˈkämərs/ The activity of buying and selling, especially on a large scale.
It seems that it is from this point that we have decided to add complexity to the business formula.
Since business cannot fundamentally change the simplicity of exchanging money for something of value, it tends to change how it goes about pursuing this exchange. It organizes itself to simplify the pursuit. Then it reorganizes. It changes in response to a perceived competitive threat. It centralizes. It decentralizes, distributes and diversifies.
In short organizations drift into an internally focused approach to commerce and business. Since it is so difficult to change a customer, organizations tend to focus on changing themselves. It seems as though that there is a belief that if an organization can convince itself that it is changing in order to make itself easier to do business with, an organization can become that much better at doing business. This is an almost purely internally focused concept. Unfortunately business and commerce must usually be done with the external world.
This is an approach that invariable runs out of momentum. Organizations seem to believe that by endlessly trying to make themselves easier to business with, it makes it easier for the customer to do business. This is a key point. Just because an organization has tried to make itself easier to do business with does not mean that the organization has made it easier for the customer to do business. I guess a good example of this would be making it easier for the horse and buggy driver to buy buggy whips does not necessarily help him sell more buggy rides around Central Park.
It is a debatable trade-off of how much value is associated with the complexity a company can introduce into their systems and processes in an effort to reduce a customer’s complexity in dealing with them. Increased complexity comes at a cost or in this instance a price to the customer. An internally focused business confuses the value of removing customer complexity in dealing with a vendor, with the actual removal of complexity from a customer’s business.
This is a rather circuitous way of saying that the focus should not be on making it easy for a customer to do business with you. That must be a given. The focus should be on how you make it easier for your customer to do business with their customers. That is where the true value of commerce is.
There is a certain amount of value that a customer will recognize in an organization that makes itself easy to do business with. There is far more value that a customer with recognize in an organization that makes it easy for the customer to do their business.
This is where we get back to concept of “simple” in business. How do you make it easier for your customer to do business? How do you help them remove the complexity associated with their customer commerce? How do you reduce their risk? How do you help them increase the perceived value of the good or service that they are offering to their market?
It is no longer good enough to just make it easier for your customer to buy your good or service. Everybody has just about mined out this opportunity with the law of decreasing returns starting to take greater and greater affect versus the input required to affect the change. The better approach now needs to be how do you make it easier for your customer to sell their good or service. What expertise can you contribute to their success? Remember it seems to be the tools and technology that is complex, not the business.
Expertise has been and still is a product. But as I noted earlier, as products that make up our tools, and the infrastructures to support them have evolved and become more complex, it seems that expertise associated with operating these tools and infrastructures continues to be somewhat overlooked.
Organizations continue to try to restructure themselves to make it simpler for their customers to do business with them. They also try to restructure to make themselves more efficient at conducting their business. I think the next logical step in the evolution is to no longer think about how you can restructure yourself to conduct your business, but how you can help your customer restructure themselves to make their business easier to conduct.
I think the question for the future is no longer how can I be easier to business with, but more how can I make you easier for your customers to do business with? What customer complexity can you remove from their organization? It should no longer be what device can you sell them that is more efficient, but what can you do for them to make them more efficient.
In an internally focused, product driven world this sounds complex. It is easy to believe that because it is different than they way organizations have been thinking, but when you think about it, it should be pretty simple.