things an old economy firm must know
1000 Biggest Companies
The convergence of old managers and the new economy is forcing
the traditional business model to change fast. The
problem: Becoming cyber-savvy requires more than just an
executive decision. Without the right mindset, the technological
know-how and a genuine willingness to adapt, a lot of Asian
companies could get into trouble. Nine points to keep in
E-Business Is a State of Mind. Be ready for the dreaded
C-word: commitment. "Companies have to be completely prepared
to make the changes that adapting to the Internet economy
demands," says Joe Sweeney, research director for Gartner
Group in Hong Kong. Merely launching a website won't do.
Unless companies are ready to fundamentally rethink their
business, cyberspace will be little more than a cyber void.
Timing Is Everything. Never underestimate the importance
of speed in the dotcom world. "In the new economy, planning
beyond 24 months is a really bad idea," says Sweeney. While
a comprehensive business strategy is essential, companies
must also have the flexibility to adapt to the faster pace
of transactions. "It's reasonable to assume that the business
environment will change enough every few months to require
some minor or major readjustments," he says.
"If companies can't reconfigure their strategies fast enough,
they will lose out."
Talking Will No Longer Cut It. Traditional businesses
revolve around meetings and memos, a formula for disaster
in e-business. "In most cases, what tends to happen is that
e-initiatives get stalled among managers who discuss the
problems," Sweeney says. What is needed is a CEO or an information-technology
strategist with a vision of how the business needs to change
and the practical steps to get it done.
Outsiders Are the New Insiders. "E-businesses need
both technological and management expertise," says David
Michael, vice president of the Boston Consulting Group.
Even the best-run companies might have to look outside for
senior executives with the requisite tech background. The
arrival of outsiders could foster a more lateral leadership
structure that veers away from the traditional Asian hierarchy.
E-Workers Are a Different Breed. Asia's small pool
of talented e-commerce workers means that companies looking
for an edge will have to pay for it. The incentive route
of base salary plus performance bonuses may no longer be
enough, Companies should also be prepared for a new working
environment. "They can no longer presume that someone's
looking for a lifetime job," says Michael. Retirement benefits
may have to be replaced by stock options or other short-term
Too Much Money Can Be a Distraction. E-businesses
are as prone to misspend as the next company. They just
have more expensive options the snazzy new servers,
the latest e-business software, the tanking dotcom competitor
asking to be acquired. "Not everyone knows how to spend
on ventures that have no guaranteed returns," says Hong
Kong dotcom entrepreneur Larry Campbell. So companies should
exercise restraint. "A lot of money can be dangerous for
a company without a long-term specific plan," warns William
Fung, group managing director Li & Fung, a leading Hong
Kong trading company often praised for its e-business strategy.
"If it raises just enough seed capital to get to the next
stage, it will probably spend more time consolidating the
business plan and still be strong enough to continue."
Be Prepared for Anything. If Yahoo calls you
with a proposed deal, who in your organization answers the
phone call? "Every company should know how to answer this
question," says Michael. "E-commerce opportunities do not
wait for corporate calendars to get cleared. Organizations
need to set up significantly specialized departments so
that they can deal with unplanned happenings." At the same
time, e-companies must realize that the diversity of skills
within their organization could easily give the impression
that the enterprise is in disarray. Special efforts must
be made to present a united front.
There Are No More Enemies. E-businesses will compete
on how well they can do what they do best. So unless their
core competencies include financial accounting and buying
office supplies, they are better off outsourcing these functions
to companies that specialize in them. "There will be a lot
of new alliances forged in the new Internet economy," predicts
Joseph Lee, executive director of Goldman Sachs in Hong
Kong. "Part of the answer will be looking to join forces
with other companies in different regions."
Not Everything Will Be Repealed. Some things never
get old. "Taking advantage of Internet opportunities often
just means going back to what you learned in Business 101
and adapting everything to technology," says Hong Kong businessman
Fung. "Companies should remember to go with their traditional
strengths before going online." The basic values that make
a company what it is can still be the best foundation for
the reinvented new economy enterprise.
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