How do we cope in tough times?
The merger of Sears and Kmart seems to be failing - Edward Lampert's strategy - get big and cut cut cut. Those who do this in newspapers seem also to be be failing - expenses go down but so does the product and so customers leave. By getting scale by using leverage, they also get the leverage on the way down.
Most people still think about their business in a mechanical sense. Build up the structure via debt and make the structure more efficient by cutting. I don't think that this will work anymore - we see it failing all over. But as it is the only way we know how to cope in tough times, we keep trying it in hope that this time it will work.
Is there another way? Is there, in particular a way for my friends in Public TV and Radio - who never had much to start with to cope and even thrive in the tough times to come?
Let's think of "More for less".
Get scale not through using leverage but by using the power of networks. Get "More" by using the power of the network effect to bring resources into the organization from your customers and your peers.
Use the web to be the "More". Here is where you can tap into the power of the Network effect - here you have access to infinite "shelf space" and to huge customer input and resources.
I am going to follow this post up later today with a case study of how the Canadian Banks did this 20 years ago - resulting in system volume rising exponentially - 90% of transactions occurring outside the branches - with most of the work that supports this volume done by the customers themselves or automated.
Watch for the Interac Story soon
