‘Happiness’ …where New World Growth meets Old World Models

Boulton Watts Murdoch

Boulton Watts Murdoch

Everyday I am profoundly amazed by new technology and prophecies of a changing world through thinking differently. There is a rapid evolution of the use of intuitive interfaces to complex software as well as the real paradigm shift that is occurring in laboratories around the planet. Innovators are blurring the boundaries between data and the material world and making the probable, possible.

So, opportunities abound with lots of new thinking. This got me thinking too.

I am a veteran of a few global peaks and troughs in business ‘stuff’. I was around before Mobile Phones, but was one of the first to get to use them (well my first had a curly cord attached to the Car), I used Desktop PCs when they didn’t have a ‘Windows’ GUI and I can remember the boom of IPOs that the Internet Economy spawned. I can also remember such lows as the 70’s oil crisis, the Internet ‘Bust’ and as we all know the 2008 financial meltdown. So what am I thinking?

My thoughts are to the intelligence and energy that goes into market making on the back of things which are good for society, and therefore good for commerce, balanced with the failures that happen in business that were unexpected. ‘Unexpected’…really?

Most things in business happen in a shape that is determined by a model that has probably been taught in the classroom of High Schools, let alone the top Business Schools, for decades. In fact, if you go back to Charles Dickens and the well articulated economic wisdom of Mr Micawber in David Copperfield:

“Annual income twenty pounds, annual expenditure nineteen [pounds] nineteen [shillings] and six [pence], result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery”

Evaluating success and ‘happiness’ is not new thinking.

Although I anticipate that there will be cultures of abandoned responsibility when going for growth, we have to look for sustainable recovery by looking at ‘profitability’ to a ‘plan’. The Business Plan may show different rates of return, but with limited capital, we need to define the size of the profit prize and/or the additional company benefits that can be used as a platform for additional business development. Just getting revenue growth will not necessarily bring long-term value to the Company.

With the impending IPO for Twitter it has been good to see the dialogue in the Media, who have started to ask the sort of questions which were overlooked in the late 90’s boom of IPOs. “Where is it getting its revenue? And, Where will growth come from?”

For Twitter, you can see that the Social Media tool is a real hit with users and therefore you will get fervour in the financial markets. If it had been ‘Offered in the 90’s there would have been valuations by Analysts giving multipliers on revenues linked to numbers of subscribed users, without any real reasoning to the business model. Thankfully, there is now a bit more caution.

We all want and need winning formulas. We all need growth. And although we are now in a New World, the Old Business Models will be required to keep excitement in-check with reality.

As usual, if you would like to share this with other colleagues please feel free to distribute.

dugdaleconsulting.com

About David Dugdale
Business Transformation Consultant

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