Business Models

The Right “Vehicle” for Business Growth

Mae and Bob’s Business Growth Stalls

“I may as well be playing Whack-a-Mole” said Mae. “This stopped being fun a while ago.”

Mae (not her real name) was beside herself with frustration as she described the situation. Over 15 years ago, she and her husband, Bob, (not his real name, either) left their careers in broadcasting to build state-of-the-art videoconference facilities and events for corporations. They had grown their company to $15 million dollars annual revenues with respectable margins, relying on a combination of three anchor corporate clients, a gift for finding the best technical staff, and an incredible work ethic.

But over the last two years, revenue had plateaued and stubbornly refused to budge. Worse, initiatives intended to restart revenue growth were eating up profits, time and energy, and were causing unintended consequences that undermined any temporary gains.

“We underestimated how rapidly equipment prices would fall – when we started, a 4K resolution video camera rented for $3,000/day – now 4k is available in a $200 webcam.”

She shook her head. “We underestimated how quickly the cheap, low-end cloud-based services would improve. Zoom is eating corporate share from the expensive systems we sell, for $12 / person / YEAR¬†in volume.

“Mostly, we failed to anticipate the millenials’ shifting attitudes toward big, in-person meetings – they’re fine with seeing 24 faces arranged in tiles on their laptop screens. Who needs boardrooms with custom videoconference setups?? We got complacent living off a premium market that is now evaporating.

“Bob isn’t coming out and saying it, but I know he is increasingly stressed about our personal financial situation. We’re in that perfect storm of kids entering college, parents aging a little too rapidly, and we’re behind in saving for retirement because everything is tied up in the business.”

She was quiet for a moment, then: “Bob and I have been a great team for as long as I can remember, but I won’t lie – we’ve been pretty abrupt with each other, with our staff, and with everyone in our families. We started our own business for the freedom it gave us to raise our family. Now, though, the price we’re paying – that our family is paying – is too high.”

Mae and Bob’s critical mistake was in believing that one business model, or ‘growth vehicle’ would take them as far as they wanted to grow, for as long as they wanted to grow.

A Vehicle for Business Growth?

You choose a vehicle – sports car, moving van, moped, snowmobile, earthmover – to match the mission ahead. Each vehicle has a different top speed, fuel economy, terrain requirements, hauling capacity and so on. Make the right choice and you not only deliver the goods on-time and on-budget, you enjoy the ride!

Business growth is much the same. Different stages of business growth demand different business models or “vehicles for growth” Growing from startup through $1 million revenues and 5 people requires a completely different set of characteristics (people, strategy, execution, cash) than growing a company from $50 million revenues and 120 people through an IPO (Initial Public Offering).

If you choose the wrong growth vehicle for the mission, or fail to change vehicles when the terrain changes, then you won’t¬†enjoy the ride!

The Wrong Growth Vehicle

How might you tell if you are using the wrong vehicle or business model for your stage of growth?

  • Revenue growth slows despite your best efforts
  • Profits decline
  • Your best clients start shopping around
  • Your best employees update their LinkedIn profiles
  • Your banker takes increasing interest in your financials
  • Everything seems to take more¬†effort but yields a diminishing return
  • Like Mae and Bob, your frustration and personal stress are increasing
  • You no longer enjoy the ride.

The Right Growth Vehicle(s)

Designing your optimal vehicle for growth is not a one-and-done thing. This is the art of Scaling¬†Up a business. You are constantly evolving your strategies, models and execution plans, informed by and interacting with the environment and markets around it. Don’t think of a single vehicle or business model, rather a roadmap of current and future business models, all evolving and ready when you need them.

The good news is that the¬†PROCESS¬†for designing, managing and evolving your growth vehicles is actually quite consistent and straightforward, and is fueled by an owner’s vision, persistence and unending hunger to learn.

There are quite a few good processes out there, but for our small and mid-market business clients, Ann and I trust and recommend the Scaling Up Business Growth Process, created by Verne Harnish and adopted by over 20,000 organizations worldwide. Ralston Consulting Inc is certified by Gazelles International Coaches.

Your Next Steps


РGary Ralston, © 2017 Ralston Consulting Inc.

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Monday, August 21st, 2017 Article Archive, Business Insights, Business Models, Main Page, Scaling Up Comments Off on The Right “Vehicle” for Business Growth

New Video and Course: Understanding the Impact of Exponential Organizations

ExOWebinarHeader

Watch Yuri van Geest’s mind-blowing webinar from December 4 2015

We are excited to introduce you to Yuri van Geest, member of Singularity University and the co-author of the ground-breaking book, Exponential Organizations, published in the fall of 2014. (The book is now required reading for all practitioners at the prestigious consulting firm, McKinsey and Company.)

Yuri hosted a webinar focused on the real cases and experiences he has seen over the past year and the challenges companies have overcome.¬†Ann and I¬†just¬†completed the webinar, and we were BLOWN AWAY at the rate of innovation reported, worldwide, especially in China!¬†Yuri, who tracks¬†emerging technological breakthroughs for a living, reports,¬†(11:01) “In the last six to twelve¬†months since the launch of the book, the pace of change of technology is accelerating more than ever before.”

Recent innovations include:

  • Solutions for¬†Cancer, Alzheimers Disease (your lost memories come back!!) and Type 2 Diabetes.
  • A quantum computer of mind-boggling processing power to be released December 8, 2015 that will disrupt existing solutions.
  • Artificial Intelligence more advanced than Deep Mind and IBM Watson that can ask and answer its own questions.

On the rate and number and variety of technological breakthroughs in the last 12 months, Yuri¬†says:¬†“These quantum¬†leaps I have never seen in the last 10 years – this is a new phenomenon…” “…and all these technologies are converging for the first time.” (Self-teaching AI + powerful quantum computer = Skynet??)

Watch Yuri’s presentation¬†now.

Yuri van Geest ExO Webinar 2015-12-04

Register for the Exponential Organizations Master Practitioner course, starting December 10, 2015

Ann and I are registered for (and anticipating) the Exponential Organizations (ExO) Master Practitioner course starting next week. The 10-week hybrid program includes video, workbook, live group sessions with Yuri and his co-author, Salim Ismail, and discussion forums for participants. We will be exploring and applying new ways to help our clients in both business and social sectors accelerate growth where it matters to them, be that in profits, social impact or both.

This course is really important to us Рtruly a framework for ventures and social causes in the 21st century. We think the Exponential Organizations work is a match for many of you in our extended community of changemakers. We hope you will join us!

Want to learn more? Get in touch with Ann or Gary, or sign up now through this link to gain prompt access to the course materials and videos!

Enough said. We have a world to change…

– Ann and Gary Ralston

© 2015 Ralston Consulting Inc.

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Monday, November 30th, 2015 Article Archive, Business Models, Exponential Organizations, Main Page Comments Off on New Video and Course: Understanding the Impact of Exponential Organizations

Shake Up Your Biases and Preconceptions with a MOOC!

MOOCs are opening more than higher education to the world – they can open the world to you

This fall I participated in my first MOOC (Massive Open Online Course – see sidebar). The course, Behavioural Economics in Action 101x, is offered by the prestigious Rotman School of Management at the University of Toronto, for free. I’m accessing this course through EdX, a¬†non-profit online initiative of 30 of the world’s top universities,¬†created by founding partners Harvard and MIT.¬†Their mission is expand access to the best of higher education for students around the world – and this in part means reducing or eliminating the barrier of cost.

If my class is any indication, EdX has proven its global reach. I was blown away – each pin on the world map below represents one of my over 2100 fellow learners!

BE_101X_-_over_2000_people-5

Now it’s great that EdX is bringing this course to the world. Absolutely. But early into the course it dawned on me that through this MOOC, EdX had brought the world to me! While I found the course content interesting, I was much more intrigued by the varied points of view from different cultures.

A bit about the course content

What was your BIGGEST class at university?MOOCs are bigger…

A MOOC is a Massive Open Online Course Рa relatively new development in the world of online learning that is generating significant buzz, and no small amount of angst about their possible impact on the business model for higher education.

Top universities are offering top-notch interactive courses to large numbers of students at once, taught by excellent faculty, many for free, and some for-credit, at a fraction of the cost of a conventional university course.

In case you are wondering how many students per class is¬†large…¬†according to Wikipedia,¬†‘Udacity’s CS101, with an enrollment of over¬†300,000 students, was¬†the largest MOOC to date.’

Behavioral economics explores, from a psychological point of view, why people sometimes make irrational decisions, and why and how their behavior does not follow the predictions of economic models. Further, these behavioral insights can be used to influence decisions in many ways, from the obvious – drive up consumer spending by offering “bargains” – to the more subtle – lose weight by doing nothing more than taking a picture of everything you consume. Such techniques or strategies, designed to subtly influence decisions toward a given outcome, are commonly referred to as¬†“Nudges”, and there has been much interest in applying such behavioral insights to larger policy and societal issues.

Many of our class discussions (held in web-based discussion forums) focused on social issues, with the intention to explore how to influence or “nudge” behaviors that increase health and overall well-being of people and societies.

Some of our early topics…

  • disrupting the transmission of AIDS in Uganda,
  • quelling noise pollution from overuse of car horns in large cities in India, and
  • shifting a nation’s personal debt and spending / saving patterns.

And the conversations were fascinating! The richness and diversity of views and the insights from different countries, socio-economic backgrounds and fields of study opened a much wider world to me, creating a deeper and more engaging learning experience. There is nothing like discussing a subject with someone from a foreign culture and way of thinking to show up your own assumptions and biases!

If you’ve been missing out on the amazing variety of free, quality education available through MOOCs, and a world of fellow learners, here are a few tips (okay, nudges!) to get you started:

See you in the MOOC-iverse!

– Ann Ralston

© 2013 Ralston Consulting Inc.

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Thursday, December 19th, 2013 Article Archive, Business Insights, Business Models, Corporate Social Responsibility, Main Page, Personal Mastery, Sustainability Comments Off on Shake Up Your Biases and Preconceptions with a MOOC!

“We Aren’t the World” – Required Reading Before Going Global

What do we really know about human behavior and motivation, worldwide?

Sustainable business models and social enterprise models count on our ability to understand why our customers buy and use our products and services. Our most successful clients have developed an uncanny sixth sense ability to know the customer’s motivations better than the customer.

On their home turf.

“Home turf”, for many of our clients, means¬†WEIRD countries. Now before anyone takes offense –¬†WEIRD stands for¬†Western,¬†Educated,¬†Industrialized,¬†Rich, and¬†Democratic. As long as they grow their ventures into other WEIRD markets, that sixth sense about customer motivation can serve them. But go beyond, and it’s a different story (to which our clients with global reach can attest).

weirdstudylesscrop-Mark_McGinnis

Why is this so?  Why do some of our instincts about customer motives in foreign markets turn out to be wrong Рand sometimes waaay wrong??

“We Aren’t the World” is a brilliant article / interview about three researchers at University of British Columbia who, according to author, Ethan Watters, “are shaking the foundations of psychology and economics‚ÄĒand hoping to change the way social scientists think about human behavior and culture.”

Their work has taken them around the world, testing how¬†perceptions, behaviors, and motivations vary by culture. Along the way, they discovered significant biases in the research methods of “…a¬†vast amount of scholarly literature in the social sciences‚ÄĒparticularly in economics and psychology…”

“As the three continued their work, they noticed something else that was remarkable: again and again one group of people appeared to be particularly unusual when compared to other populations‚ÄĒwith perceptions, behaviors, and motivations that were almost always sliding down one end of the human bell curve.

In the end they titled their paper ‚ÄúThe Weirdest People in the World‚ÄĚ (pdf) By ‚Äúweird‚ÄĚ they meant both unusual and Western, Educated, Industrialized, Rich, and Democratic. It is not just our Western habits and cultural preferences that are different from the rest of the world, it appears. The very way we think about ourselves and others‚ÄĒand even the way we perceive reality‚ÄĒmakes us distinct from other humans on the planet, not to mention from the vast majority of our ancestors. Among Westerners, the data showed that Americans were often the most unusual, leading the researchers to conclude that ‚ÄúAmerican participants are exceptional even within the unusual population of Westerners‚ÄĒoutliers among outliers.‚ÄĚ

Given the data, they concluded that social scientists could not possibly have picked a worse population from which to draw broad generalizations. Researchers had been doing the equivalent of studying penguins while believing that they were learning insights applicable to all birds.”

How could this happen?? (Did you guess: ‘European colonialism and political correctness’?)

“The last generation or two of undergraduates have largely been taught by a cohort of social scientists busily doing penance for the racism and Eurocentrism of their predecessors… “

Decolonizing_Methodologies__CoverI cannot overestimate the importance of developing acute cultural sensitivity when going into regions affected by European colonial expansion, which began in the 15th century and whose impact is felt to this day.

Also, don’t assume you have to cross oceans to find such cultures. I owe a debt of gratitude to my aboriginal clients and friends – members of Coastal First Nations in British Columbia. They helped me through one of the most powerful, disturbing experiences of my career as I learned about the terrible history of abuse of aboriginals in residential schools in Canada.¬†For more information, please visit¬†Canada’s¬†Truth and Reconciliation Commission¬†site.

 

For any colleagues heading into similar territory, the site above, as well as the book: Decolonizing Methodologies: Research and Indigenous Peoples may help heighten your cultural sensitivity.

To avoid stereotyping, it is rarely stated bluntly just exactly what those culturally derived qualities might be…¬†Economists and psychologists, for their part, did an end run around the issue with the convenient assumption that their job was to study the human mind stripped of culture. The human brain is genetically comparable around the globe, it was agreed, so human hardwiring for much behavior, perception, and cognition should be similarly universal. No need, in that case, to look beyond the convenient population of undergraduates for test subjects. A 2008 survey of the top six psychology journals dramatically shows how common that assumption was: more than 96 percent of the subjects tested in psychological studies from 2003 to 2007 were Westerners‚ÄĒwith nearly 70 percent from the United States alone. Put another way: 96 percent of human subjects in these studies came from countries that represent only 12 percent of the world‚Äôs population.”

But it gets worse. From the research paper:

“Even within the West, however, the typical sampling method for psychological studies is far from representative. In the Journal of Personality and Social Psychology, the premier journal in social psychology‚ÄĒthe sub‚Äźdiscipline of psychology that should (arguably) be the most attentive to questions about the subjects‚Äô backgrounds‚ÄĒ67% of the American samples (and 80% of the samples from other countries) were composed solely of undergraduates in psychology courses (Arnett 2008). …”

No. Way. Epic experiment design assumption goes horribly wrong and throws a shadow over an entire field of study. Oh Рand anything else that is based on the field in question.

The magazine article concludes:

“And here is the rub: the culturally shaped analytic/individualistic mind-sets may partly explain why Western researchers have so dramatically failed to take into account the interplay between culture and cognition. In the end, the goal of boiling down human psychology to hardwiring is not surprising given the type of mind that has been designing the studies. Taking an object (in this case the human mind) out of its context is, after all, what distinguishes the analytic reasoning style prevalent in the West. Similarly, we may have underestimated the impact of culture because the very ideas of being subject to the will of larger historical currents and of unconsciously mimicking the cognition of those around us challenges our Western conception of the self as independent and self-determined. The historical missteps of Western researchers, in other words, have been the predictable consequences of the WEIRD mind doing the thinking.”

So take heed – if your organization has plans to operate in a foreign cultural context and marketplace:

  • Read the article, research paper, and anything credible you can find about the culture.
  • Find local cultural guides and take a learning journey, immersive¬†far beyond the ‘airport hotel and tour bus’ visit. The aim is to¬†experience firsthand¬†the nation, the people and their culture – down to the specifics of¬†where and how they will buy and use your offering. (Be prepared to put aside anything you’ve read in favor of direct experience.)
  • Given all you have learned, localize your business model, offering and approach.

Maybe then, the locals won’t dismiss you as too¬†WEIRD.

A shout out to Fleurette Sweeny at SelfDesign Learning Foundation for turning us on to this article!

– Gary Ralston

© 2013 Ralston Consulting Inc.

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Wednesday, September 25th, 2013 Article Archive, Book and Media Reviews, Business Models, Corporate Social Responsibility, Main Page, Marketing, Social Enterprise, Values Comments Off on “We Aren’t the World” – Required Reading Before Going Global

Contact Us Today

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ANN RALSTON

T 614-761-1841 ext 2
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Call me! - Ann Ralston


GARY RALSTON

T 614-761-1841 ext 3
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Call me! - Gary Ralston

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