Leg 1. Understanding Core Business. Part III.
Good Morning! Bonjour a Tous!
The 7 sailing teams at the Volvo Ocean Race are near Lisbon. It seems they will be ready to arrive tomorrow. I would like to share a dashboard racing screenshot of the results up to this moment. The Volvo Ocean Race 2017-2018 has a section on its website called RACING. And if you click there, you will find several options of the “LIVE” current status of the boats. The race position tracker will be “live”, that is what I know. At the moment team Vestas 11th Hour Racing is winning (it is the little orange boat in the dashboard)… Technology is amazing when used well. I love this Race Position Tracker. Any person on earth can see this race with a click, and it doesn´t matter if you are located in the USA, South Africa, UK, Switzerland, India, New Zealand, Argentina, Colombia, El Salvador or Singapore.
I would like to share with you some thoughts about the “core business”. The “core business” of a company is not and can´t be considered as a static “oeuvre”. It is not a painting hanging at the Louvre Museum in Paris. The world is changing so much. Technology opens new manners of living too. Since 2008, we have been living so many things which can´t be dismissed:
- A financial global crisis which started in 2008.
- The recent geopolitical changes in Europe.
- A refugee crisis in the Middle East which has affected Europe directly.
- A divergence of priorities in the US political agenda. President Obama had a different strategic vision of his country and his diplomatic agenda in the world was completely different to what we see with President Trump at the moment. President Trump has a distinct agenda for the coming years.
- A Brexit from Great Britain stepping out of the European Union. Cataluña is wishing to be independent of Spain since decades ago and we don´t know how Spain will sort out this.
- China´s clear expansionary ambitions all over the world, and particularly in Asia, Africa, and Latinamerica.
- India´s strong steps toward a modern development and a clear bet on working hard to improve its social index with national programmes such as “Make in India”, “National Skills Development Mission” and “Digital India”.
- Russia´s strengthening economic position in the world and its commitment to creating a pro-Russian “branding” name.
- From the point of view of corporate America: “More than one in three Fortune 500 U.S. public companies from 1995-2004 experienced bankruptcy or takeover” (Chris Zook, Unstoppable: Finding Hidden Assets to Renew the Core and Fuel Profitable Growth).
In this general global context, there are many factors accelerating global business turbulence; Chris Zook has identified seven of them:
- Faster movement of information – on everything
- Speed of capital formation
- Emergence of China and India, and their disruptive impact
- Reduced capital intensity among the most profitable new industries
- Increasingly rapid movement of executives among companies
- The rise and impact of private equity firms
- Speed of overall technology cycles
I can´t find a better phrase to define the new challenges for this coming years as a future decade of “Transformation and renewal”. I certainly believe these years will give us the opportunity to:
- Embrace the new (which is good for us) and dismiss the new things which don’t add value to our lives.
- Revalue the old ways which are good for us, and erase the old things which have not given us anything good to our lives.
In the “core business” context, are we opening a new door to a “melange” (mix) of new market niches?
This transformation and renewal of our “core lives” (keeping the good old ways and embracing the good new things) will push us to redefine our “core businesses too”. We will see a clear division between: (1) A group of traditional people who will not like to leave the old style of doing things or who are returning themselves to the “old” way of living “because adopted technology was an opioid to them, and are currently living the negative consequences of being too techie”; and (2) A second group of people: the group who embraces technology without any doubt accepting the pace of it (including robotics and AI), buying “Alexa Amazon Echo Speakers” and promoting every single gadget or technological advancement which helps them to automate their lives. And these two manners of extremely polarized living will coexist. But I also foresee a (3) third group of people: the emerging hybrid ones who will mix the “artisan way or brick & mortar” and the “industrial-tech” way. And here we are: with three groups of different clients. There are and will be enough markets with three groups of clients or customers. With these three type of different clients, we will be able to redefine businesses with three different concepts, three different product differentiation, different use of technology, different channels and different concepts of branding.
According to the Census Bureau’s definition, the Millenials are the generation who was born between 1982-2000. Generation X, or Gen X, is the name given to us, who were born between 1965 and 1982. 
I am from the Gen X group (I was born in 1970). And I have met Gen X and many Millennials who dislike the extreme levels of technology as enablers of all their quotidian aspects of life: More and more, we are returning to the basics, we are regressing to try to enjoy the simplicity of life, many of us are moving back to the farms, to the “agriculture” method of living, and enjoying the nature in rustic lands, deciding to drop the urban cities and care for our children in rustic environments, and many of us are trying to find happiness there… I find it extremely interesting. If there is a market niche of people who consciously decide to drop the “urban cities” and select the minimum tech gadgets or computer/tablet applications needed just to be informed, to be able to do financial transactions and payments, and some applications for kids education and games… that is a “balance”.
Our generation (Gen X and Millenials) are starting to discern. Many of us have been completely tech-addicts for years, but more and more, we are changing our point of view in relation to technology. That doesn´t make us anti-technological either. We have started to ask ourselves for the first time in years, before buying new gadgets: Is this technology convenient?, If we adopt it, until what limit?. Is this new technology ethical? etc., etc… We are not following the techie waves as a fashion trend anymore, we have started to ask ourselves about the consequences: social, family, lack of privacy and security issues, and many other effects of the abuse of technology in our health or social wrong implications for kids… 
We are starting to say NO to excessive tech gadgets and social media use, and we are starting to say: Technology is OK but with limits, just for what is needed and required. We are learning to adapt the capacity to turn off the Android or iPhone when in a meeting. We are learning to leave the phone hidden when arriving at our home after work and find the pleasure of reading a book and feel the pages in our fingers, as we did it when we were studying high school. We are waking up to have the capacity to shut down tablets when we want to. As you know, I am not a mom yet, but I will be a mom as soon as I marry my adorable and handsome Alejandro Guillermo Lozano Artolachipi. But for all my good friends who are Moms and are raising kids, I have seen them truly committed to keeping the “good old” ways, not just in their professional lives but also in their homes… “We are keen to enjoy the simple pleasures of life still knowing when to turn technology off to experience life to its fullest”. Again, we are now convinced of the importance of balance. 
We are dropping the corporate jobs, and looking to set up new businesses in what we like to do, and I foresee more entrepreneurship efforts in the future. We are trying to develop new ventures from home. We are building start-ups.We want to have more time and enjoy the simplicity of living. I love it. It is a beautiful mix of living: a “melange” of the old and the new. Let´s see what will happen with a growing market as such. The GenX and Millenials hybrid group will continue to grow in numbers, in needs, in wants, everywhere in the world. We won´t accept anything less than that. We believe in the quality of life, in balance and we will ask for balanced products and services offer too.
The concept of ” core business” for our third group, the Gen X and Millenials “hybrid” group will open “new market niches” for all. And old companies will have to redefine and expand a new scope of business. Of course, new companies will be created to fulfill the needs of our “hybrid” wishes… Our “Transformation and Renewal Cycle” of life is coming. Remember we are learning all the time. As the Volvo Racing Teams, we don´t know many things of the ocean… we are learning by sailing.
Source references:
http://www.volvooceanrace.com/en/dashboard.html
http://www.unstoppablegrowth.com/core/cycle_of_business_growth.asp?groupCode=3
https://www.brookings.edu/opinions/the-financial-crisis-and-emerging-markets/
http://genprogress.org/voices/2017/07/14/45643/millennials-and-money/
http://www.investopedia.com/terms/g/generation-x-genx.asp
Note: All the pictures and videos shown on this blog do not belong to me. I do not own any of the lovely photos posted unless otherwise stated.
Eleonora Escalante Strategy 