What are the key elements of sound business operation? How to maintain business viability and growth in a business environment where “black swans” are common? How to move from one victory to another? We would like to share a few thoughts on the business practices of some enterprises.
Enterprise is a dissipative structure, open source in order to dissipate
Soft water can achieve well-developed muscles. Fitness lovers know that the seemingly fit and developed muscles, in fact, 70% is water, the adult body water content of about 60% to 65%, while the water content of muscle than the water content of fat is about three times higher, indicating that people want to maintain a healthy muscle, an adequate amount of water is essential.
Muscle is the place of breathing movement of living organisms, frequent metabolism, need a lot of water to transport oxygen and nutrients, excretion of metabolites, muscle dehydration, will lead to muscle cramps and reduced exercise capacity, resulting in injury to the body. The human body is actually a dissipative structure, through energy dissipation, thus making the body strong and healthy.
Huawei Ren Zhengfei said, why Liu Xiang can become the world champion? He had to eat beef every day, but if he ate beef without exercise, then he did not become fat? Constantly intake energy, and constantly dissipate energy, so as to become the world champion. Naturally, this process Liu Xiang also not less dissipated sweat.
Dissipation, to put it bluntly, is the organization learning, the growth of any organization, is through the dissipation to complete. Like the human body, the enterprise is also a dissipative body and needs to be dissipated. Some enterprises encounter difficulties in open source, habitually through the lowering of operating costs to ease the operating pressure, because compared with making money, saving money seems to come easier, which is obviously contrary to the principle of dissipation.
No open source, equivalent to Liu Xiang do not eat beef, do not drink water, ah, by reducing the amount of Liu Xiang’s exercise, can create a world champion? By the same token, companies rely on stopping or reducing the offense, how can achieve business success? Not to solve the problem of open source from the essence, simply through the means of cutting costs, but in a way that inhibits the vitality of the organization, creating an illusion of short-term profitability for us to operate.
The future is not an extension of the past. In the process of development, enterprises will always encounter various new situations and problems, which require continuous learning and trial and error, which is actually dissipation.
From the management point of view, it is impossible to establish a mechanism for employees not to make mistakes, even if it is repetitive work, employees will also make mistakes, mistakes are the norm of the enterprise, the only feasible management is to establish a mechanism for the rapid presentation of problem samples and rapid correction within a certain time window, which is the metabolic process of the enterprise, or called self-criticism.
If the water of operating costs is squeezed dry, how can the enterprise metabolize? How to maintain the vitality of the organization and the passion of creation? Just like wringing a towel, wringing the towel until the towel does not hide any water inside, the force is too much, the whole towel will be wrung. Therefore, the fundamental way out of the survival and development of enterprises is open source, and constantly obtain energy from the outside, so that enterprises have the conditions of dissipation. Ren Zhengfei said that Huawei is willing to spend money, but Huawei is the money that can not be spent. Huawei actually follows the principle of dissipation and understands the importance of open source.
Constantly injecting negative entropy into the dissipative structure, open source is the only way to have negative entropy. The key to open source is to create value, and the key to creating value is to hit the customer pain points. Many people do not analyze customer pain points, wishful thinking to sell the so-called solutions, products and services to customers, which is the king’s wife selling melons, self-promotion. Here we need to clarify two concepts, one is the pain point, one is the dessert, the pain point is to send charcoal in the snow, the dessert is the icing on the cake.
What is the pain point and what is the dessert? For example, if a company develops human resource management software, if it purely does this software to help enterprises improve the efficiency of human resource management, this is the dessert, enterprises can actually buy or not, because they can also do the relevant work manually; but if this software can effectively dock with the production plan of enterprises and the external labor market to help enterprises solve the problem of recruitment difficulties and labor shortage, this is hitting the customer’s The company can not only sell more software, but also sell value-added services such as human resource acquisition; the software becomes a flow product, which can access a large number of customers, and the value-added services can be used as value products to earn profits.
How to find customer pain points? The key is to analyze the customer value chain, the weak link in the customer value chain (or scenario), is the customer pain point, so to come from the customer’s value chain, to the customer’s value chain, focus on creating value for customers. There must be scenario thinking, scenario generates risk, risk generates fear, fear generates demand, demand generates transaction, transaction generates value.
Be market oriented, but beware of being led by the market. The amount of income is our usual thinking, but companies that do not have time-based thinking, passively led by the market rhythm, will fall into the business trap. For example, the breeding industry has a counter-cyclical growth rate, in the market downturn if not to increase investment, to the market opportunity period, there is no ability to occupy the market, only to watch others succeed.
Any ability to develop, there is a process, capacity building are aimed at the future, not aimed at today’s market conditions. There is nothing wrong for enterprises to keep the bottom line of survival, but at the same time, they should also strive for strategic heights at any cost. Ren Zhengfei once said that although Shangganling does not fight for food, if Shangganling is lost, there will be no place to fight for food. In those places where the marginal revenue is less than or equal to the marginal cost, it may reduce the company’s profit in the short term, but in the long term it will increase the company’s future competitiveness and benefit the company’s future growth.
Development is the master key to solve all problems. Open source means doing large scale, and doing large scale means needing more negative entropy, and business development is spiraling from negative entropy to scale, and then from more negative entropy to larger scale …… like this.
Not all dissipation points to success, power and the use of power is critical
Efforts that are not shaped into power are meaningless. Many people are convinced that words such as “gathering sand into a tower” and “gathering strength” are actually very misleading. Let’s look at a mathematical formula: (1 + 0.01) 365 = 38, according to which many people conclude that as long as a little progress every day, a year will be a big leap, but in fact, hard work for a year, nothing to gain is all too common, what is the reason? Because in this formula, the key role is the 1, do not focus on the 1 for a little bit of effort, the last simply can not form a breakthrough force.
The premise of penetration is energy focus. We look at some enterprises, it is easy to know why these enterprises can not do up, the typical situation are: a class, by saving rather than by input to barely maintain; a class, like a big pancake, the front stretched too long; a class, because see and believe, do not see rabbits do not scatter eagles; a class, involved in areas not related to the main business, diversification… …all these, are against the basic laws of energy and energy movement, how can we do a big business?
Huawei’s management will be very transparent when viewed with energy and energy movement. For example, the principle of pressure, in the case of the same force, the smaller the area, the easier to penetrate; in strategic opportunities, Huawei emphasizes the “Van Vliet” ammunition “indiscriminate bombing”, that is, your ammunition is not enough, you can not blow up the mouth of the wall; in addition, like Huawei’s pinpoint strategy is the same as the principle of pressure, that is, the force is applied to the large pinpoint; “force out of a hole, profit out of a hole”, which is also about how to bring together the strength of all employees to form a synergy.
Why are many diversified enterprises not doing well? The reason is that the energy is scattered, and each place needs to consume energy, and each industry imagines that it is easy to do, but in reality it is not that easy. Huawei has been sharpening its sword for ten years and has been working continuously. Blind diversification violates the basic law of energy and energy movement. In this, the entrepreneur’s determination is very important, to be able to withstand the temptation of the external market.
Concentric circle development strategy to develop new business around core competence. That is, the enterprise should incubate new business at the growth point of its core competence, and in the process of development and growth, encounter a specific scenario with broad market prospect, and can create a new business opportunity around this specific scenario. Core competency is like a tree trunk, and the trunk should keep getting thicker; new business is like a tree branch, and new business should grow on the trunk.
At the same time, it must be noted that the premise of diversification is to have a breadbasket, the main business to earn money, only then there is the bottom of the incubation of new business, just like people walking, one foot to stand firm, and then step on the other foot. Huawei spent more than two decades focusing on the field of network communications, after the development of network communications to a certain scale, in 2009, Huawei derived the enterprise business and consumer business. As you can see now, Huawei has also developed the car BU business, as well as cloud computing, big data and other businesses.
Although Huawei’s business is constantly diversifying, all its businesses, its core competence is actually the same, are communications, one is CT, one is IT, together is Huawei’s own ICT field, so that Huawei’s core competence can be replicated on a larger scale and in a wider scope, the output benefit is far greater than the general enterprise, the core competitiveness of enterprises will become stronger and stronger, profitability The reason for this is that it reduces a lot of learning costs.
Therefore, we must develop our business in accordance with our core competence, which is our strongest point, and use our strengths to compete with others’ weaknesses, rather than using our weaknesses to compete with others’ strengths. It may not be appropriate to position a new business in the main course and with the goal of expansion at the beginning. A new business becomes pure diversification if it is not built on a strong foundation.
New businesses must first aim at survival to build their own development trajectory, relying on the strengths of their main business, and then slowly become the company’s new main course after getting stronger. In other words, companies should follow the law of entrepreneurship, and new businesses should make profits first, and then use their own profits to support subsequent development, otherwise the company will easily contract.
Never take the market wrongly as an opportunity. Some rich and capricious enterprises are most likely to make this mistake, a feverish mind, the money earned by luck, and finally lost all by ability. Between the market and the opportunity, there is something called ability, no ability, the market is the market, with the ability, the market has become an opportunity, no ability, the market is big, and we have what? The purpose of building capacity is to create opportunities and guide consumption.
Following others and developing ability is at best called seizing opportunities, and seizing opportunities is a backward person; from 0 to 1, or from 1 to N, maintaining a moderate lead is called creating opportunities, and creating opportunities is a pioneer. Seize opportunities, easy to fall into the involutional market competition; create opportunities, in order to get out of the competition, so as to obtain the premium ability.
A period of time, focus on a center. Want everything and end up getting nothing. Some companies assess KPI, often dozens or even dozens, which is too funny, the more KPI, the more scattered power, the more difficult to achieve the goal, which should become common sense, but many people prefer to violate common sense. In terms of a specific period of a specific business, the enterprise in the end to scale or to profit?
This binary equation, in fact, many high-level are not easy to solve, but the grassroots cadres to solve, the grassroots cadres eyes will not become “astigmatism”? Huawei is not the pursuit of profit maximization, nor the pursuit of scale maximization, but the pursuit of a certain level of profitability on the growth of the maximum, so that the binary equation at once into a one-dimensional equation, the staff to solve a one-dimensional equation is good to solve.
A company was previously examining revenue, and large projects had professional business reviews, thus profits had control means and did not need to be assessed. 2020 suddenly came the epidemic, how can the assessment be effective? There is a great uncertainty in revenue during the epidemic. After analysis, the company believes that the test market share is the most reliable, that is, no matter how the market changes, the company must ensure market share growth. The assessment adjustment in a specific period captures the main contradiction and the main aspect of the contradiction, although there is only one indicator, but it hits the pain point of business operation.
Quick decision, timely correction, the cost of missing out is greater than the cost of making a mistake
The future can only be predicted, not foreseen. Huawei believes that the future development of the company is actually unclear, it is the whole society and the environment at the same time in the design of the company, we can not ideally determine what the future outcome is. Ren Zhengfei said, our strategic planning office, is to study the company’s development strategy for 3-5 years, not to study the company’s development strategy after 10 or 20 years, I do not know whether the company can survive 20 years, if anyone is able to say what Huawei do after 20 years, I can argue: 20 years later, human beings will not eat food, and eat dung instead… …
How can companies find certainty in uncertainty? I’m afraid the feasible way, or follow the principle of practice first, bold assumptions, careful proof, top-level design and feel the stones to cross the river, and constantly negative negation. According to Ren Zhengfei, it is a test attack, first randomly fire a shot, let the bullets fly, and then shoot a gun to see if a few birds fly out, and then make a big strategic decision.
There is no scientific decision-making. Some managers of enterprises encounter the need for decision-making occasions, afraid to make decisions, and even appear to be somewhat indecisive. Why does such a situation occur? The fundamental reason is that there is no bottom in the heart, bad judgment. This is actually a kind of pursuit of perfection, always looking for a foolproof decision, which is actually unrealistic. Some managers specially arrange their subordinates to do all kinds of data collection and analysis, just to make their own decisions seem more based on these data seem to be “reliable”, but in fact, only a dose of psychological comfort, these data based on the past, how can ensure that the future?
It can be said that in reality, there is no scientific decision-making. All the decisions, essentially a betting behavior, no risk, there is no decision, where the interests of the trade-offs, is the focus and difficulty of the decision, if the enterprise wants to win, the premise is to dare to lose. Enterprises to overcome is that the more powerful in a certain area, the easier it is to produce path dependence, the more heavy assets, the more difficult it is to carry out self-denial and turn around.
Quick decision and timely correction. In fact, all decisions are not based on data in the first place, but on insights, with insights, and then go along with the insights to collect data, so the decisions have a certain degree of experience and subjective components, and the decisions are incomplete. The task of business management is to take on the laws of business management and feel the stones to cross the river, management in the short term of the left and right, in fact, is the infinite approach to the long-term development goals of the enterprise.
For example, in 2009, Huawei entered the enterprise business, when Huawei wanted to copy the business model of operators, proposed to recruit 20,000 “tigers” to grab food, many dealers scared half to death. This is definitely a misjudgment of its own ability. As a result, Huawei recruited a lot of “tigers”, but could not find where the target customers were, so Huawei had to send these “tigers” to the community again, and paid a lot of tuition fees for this.
However, Huawei’s ability to self-criticism is still very strong, the situation is not right immediately turn around, put forward the “insist on being integrated” concept, that is, united dealers to develop the enterprise business, since then the business began to stop falling back up. We do not have to laugh at the decision-making level of decision makers, because past success is not a reliable guide for future progress. Decision-making requires experience as a background, but if it relies too much on past experience, it may make the mistake of empiricism, and it is more feasible to make quick decisions and correct the mistakes in time. All decisions are best made with a margin for the future, so that if there is a deviation, it can be adjusted in time.
Effective dissipation requires “field effect”
Build a “vector field” to give direction to the organization. Today’s results are the result of our past perceptions; similarly, today’s perceptions determine our tomorrow’s results. Therefore, enterprises should know how to paint a picture of the future and use the future to pull the present, otherwise employees will only have “win” in mind, not “win”. But the future is a possibility, not a fact, so the future can only be carried by the story. Many good companies know how to tell stories to employees, depicting the vision, while there are many companies, more “realistic”, do not like to tell stories to employees, the reason is to worry that others do not believe.
May be the reverse thinking, we all believe in something, still need to tell it? Do not believe in things that need to tell ah, in reality, most people are “myopic”, can not see the poetry and far away. So believe or not is not important, the key is through a victory and benefits to cash, so that the vision continues to become a reality, more and more people naturally believe.
Huawei has a strong reverse marketing ability in this regard, when the cause is good, Huawei will strengthen the crisis education, Ren Zhengfei will say, I think about failure every day, I am blind to success, the Titanic is in a cheer out of the sea, the purpose is to think of danger, to win a greater victory. But when the cause may appear when the turn, Huawei will certainly plan ahead, desperately to employees to boost morale, so that employees are confident in the future. Imagine, there is no “heart to win”, how to win the reality?
Tactics of millions of articles, the first warfare. Go to some enterprises, found a phenomenon, managers a meeting, the participants immediately silent, even a pin dropped to the ground can be heard. Needless to say, the organizational atmosphere of this enterprise, is the leadership-centered atmosphere, the meeting we are so careful, you can imagine, the staff in the work must be convergence, such an organization can not have vitality, more likely to have creativity, because everyone’s heart first reaction is afraid of making mistakes, mistakes, means taking responsibility and being chastised.
If companies really want to create a staff willing to accept the challenge, called to come, come to the war, the war can win the atmosphere, the first should be exempt from the worries of employees, so that employees are not afraid to make mistakes, willing to do a good job is the premise. Generally speaking, due to the ability to cause mistakes, are exempt, due to the attitude and responsibility caused by mistakes, only to be held accountable.
Mistrust is a mechanism to correct mistakes. Some companies are filled with an atmosphere of distrust of employees, giving employees a very bad feeling, since the organization does not trust me, then why should I try? And superiors generally think so, to make me believe, subordinates have to constantly make achievements to prove themselves, I see, I believe. But from the employee’s point of view, this is the equivalent of the name, if a company always want subordinates to superiors to deliver the name, employees will think it is not worth, who wants to work in an environment that is not trusted by superiors?
Who wants to work in an environment where they are not trusted by their superiors? An organization where an atmosphere of distrust pervades is one in which employees do not feel they belong. A team is a matrix of interdependence, and without trust as a cornerstone, there can be no healthy teamwork. So a good organizational culture should be that superiors create an atmosphere of trust for team members, encourage team members to work boldly, believe that everyone will do a good job, and only if they believe in everyone, everyone will make the results expected by the organization.
The so-called distrust, is that people are likely to make mistakes, to go to establish mechanisms to manage the behavior of everyone’s boundaries, so that we do not exceed the rules from the heart, more than the boundary before distrust. So distrust is not distrust of people, but to establish a mechanism to correct mistakes, to prevent people from making mistakes of principle, which is the responsibility of superiors should go to fulfill, can not be their own responsibility, into the subordinates of the cast.
The prerequisite for empowerment is empowerment. Without power, nothing can be done. Every employee has the will to power, the question is whether the enterprise provides employees with the opportunity to express their will to power? Organizational design requires the reciprocity of responsibilities, rights and benefits, but many people overlook that the premise of empowerment is empowerment.
First is the right to think, to encourage employees to think boldly, to allow whimsical ideas; then is the right to express, responsibility in the body, employees inevitably have concerns and demands, to allow people to speak out, it does not matter if they are wrong, thought through, work can be done, thought is not, the power will be scattered; finally is the right to act, employees have the right to choose to perform their responsibilities corresponding to the behavior, as well as the behavior behind the organizational resources required.
A good leader, when getting along with employees, should know how to listen, show weakness, recognize and encourage, give positive feedback, constructive criticism …… to let the leader’s desire for personal achievement go away, open the “cloud computing” of all employees, pick up the wisdom of all people, and form an open source The intelligent organization. The sum of everyone’s computing equivalents must be much greater than the leader’s individual computing equivalents.
Build inequality, create contradictions, guide them, not eliminate them. Some managers are afraid to face contradictions, thinking that contradictions are a sign that they are not doing their job properly. Things have to move forward in the movement of contradictions, without the movement of contradictions, how can the cause roll forward? Potential difference, water level difference is the contradiction, there is no potential difference, where to current; no water level difference, how to generate electricity? Therefore, the truly successful managers know how to build the potential energy of the organization, and then transform this potential energy into the kinetic energy of the organization.
Business is a utilitarian organization, utilitarian organizations are characterized by efficiency, rather than fairness. We look at the hospital clinic, a good doctor, registration to queue; bad doctors, the door can be. Enterprises and clinics, the same, the opportunity will always tend to contribute to the staff, whipping the fast cattle rather than whipping the slow cattle. Many practices of enterprises seem unfair, but in fact very reasonable. After the new employees are transferred, they stand on the same starting line with the same level of veteran employees to accept the pick into, is this fair?
Not fair, but the enterprise is to force new employees to grow quickly through this law from the forest. Enterprises from the community to obtain talent opportunity costs rise year by year, resulting in the phenomenon of wage inversion between new and old employees, which is obviously unfair, but if the enterprise does not introduce talent, how sustainable development? The only thing that enterprises have to do is to convert the upside down potential energy into the kinetic energy of the employees’ charge, to make the performance, to solve the upside down, did not make the performance, it has been upside down.
For enterprises, absolute objective fairness does not exist, fairness only exists in the organization’s recognized value standards and normative system, and evolves with the evolution of the value standards and normative system. Instead of discussing fairness statically, it is better to improve the efficiency of the enterprise, which can have a good downward management effect on fairness. Contradiction is the expression of employees’ desire, and employees’ desire is like a wave. The mission of entrepreneurs is to bring the wave together into a river, a lake and a sea, and to achieve the light of all families with the rushing river.
This article is from WeChat public number: Huaxia Cornerstone eInsight (ID: chnstonewx), author: Hu Saixiong
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/the-growth-of-any-organization-is-accomplished-through-dissipation/
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