|By Octavio Pitaluga||
|February 17, 2009 10:45 PM EST||
In this article, we will discuss the paradigm shift that the modern world offers the global corporate market. Several challenges and opportunities are found embedded in various scenarios. Among these we can highlight the evolution in today's corporate world of a new business model. They could be called "virtual, agile and global networking enterprises". A new business expertise is required; Business Network Management. The architect of a Business Network Management project is the CNO - Chief Networking Officer, someone with leadership responsibilities focused on the future.
We are walking at large steps towards the society of knowledge, communication and entertainment. Knowledge is power that enables decision-making. Proper communication is what connects people in engaging and meaningful discussions. Entertainment is a common factor of interest to all people regardless of race, colour, religion or political ideology.
Diverse technologies available in the market strength these three pillars. The Internet is a reality for many years. Companies has been created and sustained based on it. Broadband penetration has been growing exponentially lately. Cell-phones have already surpassed the 100-million users barrier in Brazil. The global society is more and more mobile, agile and dynamic.
I refer to the paradigm change in the corporate world. All required resources for the implementation of business network management are already widely available in the market. Countries and, therefore, their respective companies must be prepared to compete worldwide. The difference is that technologies are getting cheaper and cheaper making the world transparent. Everyone can see what everyone else is doing. Talented people or new products and services can be identified and used regardless of geography. A company can become globally known very quickly and positioned to negotiate even when it's turnover is small. The Internet intensifies the value of a well-managed brand.
We have often watched the successful launch of companies that are Internet based and organized as a business network - virtual agile global networking enterprises. These companies have low operational cost, global price competitiveness, and prompt access to specific resources in order to satisfy customized demand. These businesses can have high profitability based on the ability to quickly adapt to each new challenge.
Can today's corporations adapt to this new challenge for competitiveness? We believe the answer is simple. Only a small rearrangement of components is necessary, making a subtle, but critical paradigm shift concerning "how to be successful".
Business Network Management is the process in which the CNO - Chief Networking Officer creates a representative team that will develop a project involving all other sectors of the organization aiming for better efficiency of the available, and sometimes sleeping resources that exist in the business networks surrounding the company. The objective is to generate mutual gains for all concerned parties. All required resources to implement projects are available in existing business networks. If these resources are not readily available, that is because they have not been sufficiently well identified, mapped out and made available.
Business network management can be summarized in six steps namely:
(1) defining the CNO and the business network management team,
(2) alignment of the businesses goals with success and risk factors,
(3) negotiate a mutual gains agreement,
(4) assessment of current status of every partnership,
(5) manage and develop business networks
(6) develop a continuous action plan.
Let us take a look at each one of these stages.
1. Defining the CNO and business networks management team
Everything starts with the definition of the project leader, who in turn will choose the core team of collaborators. In fact, everybody in the organization will participate in major or minor degree of a successful implementation of the business network management project. It is recommended that the existing key professionals of each department form the business network management team, e.g., Commercial Director will manage the Clients Network, the Purchasing Director manage the Supplier Network and so on. The subtle but fundamental difference will be that all network managers will act as a coach and facilitators of their internal subordinates and external partners.
The first change in the paradigm is the understanding that the real company structure is no longer pyramidal but matrix like. Now the company´s decision center has a networked community around it. This community is composed for each business network that engages with the company and, therefore, influences company´s strategy. Among the main business networks we highlight employees, advisory board, clients, suppliers, media, government, associations, competitors, academy, investors, strategic alliances and local community.
Along with his/her team, the Chief Networking Officer will centrally manage the business network environment. He/she will solve inevitable conflicts and will negotiate compromises in the mutual best interests of the parties. The CNO is a direct contact, although not primary, and will always be ready to assume the management of any partnership with any stakeholder during the primary network managers´ absence. This professional maps out and organizes all resources available inside the network, i.e., contacts, experiences, success stories, knowledge, competences and business opportunities. Finally, he/she sets up long-term partnerships with fair and well-defined mutually beneficial gains with each stakeholder inside all business networks.
The CNO is a serving leader. He/she worries about the self-development of each member of the internal network qualifying them to reach the agreed goals. The leadership is not imposed but offered as coaching. The CNO can only work directly with the employees. All others are outside his/her direct control but not outside his/her area of influence. For this reason, we consider the CNO, the future leader. He/she achieves the recognition of all peers from various and different networks that surrounds his/her community-enterprise creating a strong interdependence among all parties and solid synergy with the whole.
The CNO is the business network portfolio strategist and architect acting as a coach and trainer during the transition from the existing and traditional model towards virtual agile global networking enterprise. As confidence grows change will occur at both internal and external levels. In order to achieve full success in the implementation of this project, the CNO must earn the trust and develop the ability to engage effectively among all departments.
The CNO´s job description could be summarized as a higher value and moral code strategic thinker. One who has unshakable credibility in the market. A professional moved-by-challenges, who is extremely skillful in order to manage partnerships. It is also essential that this person possess a clear and purposeful communication capacity in order to guide personal development. This executive must be very creative and participative aiming to harmonize all different interests, expectations and needs among networks. In order to do so, negotiation experience and deep knowledge about one's own company are relevant key differentiation points besides having wide knowledge of the marketplace and being absolutely focused on organization's core business. Finally, good understanding of coaching methodology is very useful in order to manage people, in general.
Having employees´ network is the starting point, the CNO´s major objectives while defining the business networks management team and beginning the project implementation is to improve the quality of partnerships increasing trust and commitment among all parties involved. In parallel, we will watch the strengthening of company's branding and, as a natural result, increase in volume, frequency and value of business and of company-community itself. The benefits will return in favor of all stakeholders. This virtuous cycle will allow a quick increase in company's valuation.
2. Goals, success and risk factors
In the next stage of the business network management project, the organization will define its internal goals and subgoals via a vis the timeframe, and the success and risk factors for each department and specific sub-project. This step is fundamental for the perfect and smooth negotiation of mutual gains with each stakeholder. The more detailed and the deeper this work is, the more efficient and the faster the negotiation with business partners and respective implementation of the agreed action plan will be. The CNO and the team possess an arsenal of powerful questions, which will be addressed to other collaborators in order to generate a rich material based on overall knowledge and experience.
3. Negotiate a Mutual Gains Agreement
Next, the mutual gain agreement will be negotiated. It essentially contemplates those three pillars mentioned before: goals, success factors and risk factors. Nevertheless, it is paramount to pay special attention to needs, expectations and wills of each network member. Foe example clients want respect, quality of product and service, fair price, payment convenience in addition to prompt delivery just to mention a few points. However, media partners look for interesting content that captures the audience, continuous updating with new facts, impressive numbers and achievements around the corporate world and, if possible, some exclusive piece of information or first hand story. Once all networks are mapped out, it is time to consider all listed members, their negotiation style and history of previous encounters.
4. Assessment of the current status of every partnership
At this moment, the fourth stage starts with the evaluation of the existing status of every partnership. We recommended the creation of a simple scoring system including values and subjective criteria in order to measure each partnership. Take the time to deeply consider all existing stakeholders and the members of your ideal network. Are there any ideal professionals with whom there is no contact yet? This is the moment to identify that person. Several questions must be answered such as the relationship between negotiators, the history of these negotiations over time, and the success stories achieved so far. Is there a potential to usefully develop that specific partnership?
5. Manage and develop business networks
The business network management provides a vital component to achieve success in the overall project: win-win negotiation. It will never ever be possible to keep harmony inside the network if negotiators sit around the table with that WIN-lose spirit. This is a temptation that ought to be definitively erased. Perhaps, this is the biggest challenge to big corporations when they are dealing with smaller suppliers. It is worth remembering that important gains are not always financial and that there are diverse creative ways to capitalize on the outcome of any negotiation. The stronger the relationship and confidence between the parties is, the more quickly agreement will be reached, the bigger targets will be accepted and the better results these negotiations will achieve.
6. Develop a continuous action plan
The final step is the effective implementation of an action plan for the short, medium and long term of each network and their respective stakeholders. It is recommended to start this project negotiating with the network over which the company has the biggest direct influence; employees. There are always potentially valuable contacts with various professionals who are members of our extended network and who are completely dormant just because nobody has yet asked them for anything. Once again, the Chief Networking Officer can be effective here. Given all his/her outstanding of the value inside the organization, this professional possesses the required power to request this new active engagement in the companies' discussions. All collaborators need to be trained and to understand the benefits for their careers when they contribute to the successful implementation of this model.
The action plan that will be defined for each network has some points in common. Defining the goal for each specific action, its style and format, frequency with which the action must take place, its target group involved and location (either physical or virtual). As a result, there will be a calendar of activities throughout the whole year. However, from time to time, it must reassess and adjust the way towards goals, sub goals, timeframe, actions and further related activities in a constant mechanism of human and professional self-development besides continuous improvements in the internal process. Celebrations and awards must not only happen but also be widely communicated and publicity in accordance with the calendar of events.
Once again, the unique leadership style of CNO and the business network management team is paramount in the sense of translating the embedded knowledge in each collaborator into clear and precise actions generating a positive result to all levels of the enterprise. Thus, the company will perfectly well establish the three pillars, which direct the future of the market: knowledge, communication and entertainment.
There are various benefits of the implementing a business network management project to an organization. As an example we selected some high aggregated values both tangible and intangible. Thinking of your own internal team, this project creates a good working environment with professional values, which will make easy to attract and retain good executive talent. Concerning several stakeholders in diverse networks, there will be an increase in the transparency and trust in the partnership with several networks and all stakeholders involved. It is obvious that the development of human beings and a win-win culture will consolidate these partnerships in the long run. After several rounds of negotiations and mutual learning, business network management verifies the alignment of goals, success factors and risks between partners. As enforced previously, there will be an overall cost and business cycle reduction resulting in higher profitability margins for each partnership. The internal communication with diverse networks will improve meaningfully bringing more efficiency, cost reduction and quicker deployments. Finally, it is possible to map out the resources needed to expand new lines of business at a national and global level.
In order to finalize, let us take a look at a recent success case of a company that is totally web-based and that exemplifies the importance of business network management in modern times. By the time, E-Bay decided to acquire Skype, its freeware had been downloaded by 140 million times and it was verified that 20 million users were loyal users. Skype has a known brand. Thousands of people turn on Skype every day. E-Bay recognized the strong sense of community around Skype´s brand and company name. They evaluated those 20 million loyal members of Skype, the "community-company" at US$ 150/each. This makes the purchase price US$ 3 billions. It is important to note that only the member network was evaluated. None of those additional partnerships was taken into consideration in Skype´s valuation. This case leads us to some quick considerations:
In this sense, tools such as open and/or closed online business communities available in the market are very valuable and practical. These platforms can be used openly or even be developed in a very specific and customized way by the company's internal information technology team.
Where does the future start? It's not just a matter of time; it is a matter of attitude and choice. My own choice was made two years ago when I assumed the position of Chief Networking Officer and started implementing my own business networks management project in my professional activities.
Dear reader, do you believe that to implement a business networks management project and to have a Chief Networking Officer can bring big benefits to your organization in the medium and mainly in the long term? Are the existing leaders of your company mature enough and ready to take this attitude of shaping the future of your enterprise through a more efficient business network management? I leave here my challenge-invitation in order to design a similar project for your professional career and business.
|RR Mussa 02/20/09 10:28:16 PM EST|
But other sub topics I would be interested in delving into;
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