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alan picture bill picture       A Business Forum Book Review:

GPS for the Emerging Business

          The use of space satellites has transformed navigation in the later part of the Twentieth Century. The United States’ Navstar GPS (global positioning system) enables one’s location to be determined to within less than 100 feet anyplace on the face of the earth -- and in any kind of environment. We are no longer hostage to the vagaries of less-than-perfect chronometers, wobbly sextants, inclement weather, or zero visibility. Travel by sea, air and land is still not free of perils, but "getting lost" need not be one of them.

          While the global marketplace is still fraught with potential hazards for the smaller business, a helpful navigational guide is now available, Going Global: Four Entrepreneurs Map the New World Marketplace, by William C. Taylor and Alan M. Webber (Viking Penguin, 160 pages, $22.95). Former editors of the Harvard Business Review, the authors have assembled in-depth interviews with four notably successful pilots in transnational markets. They have been dubbed "The Captain," "The Mapmaker," "The First Mate," and "The Financier." Although affiliated with large corporations, the insights of these four leaders are invaluable to the owner/manager of the emerging business.

          "The Captain," David R. Whitwam, Chairman and Chief Executive Officer of the Whirlpool Corporation since 1987, has assembled a global web of manufacturing facilities, R&D centers, and strong brands -- KitchenAid, Roper, Estate, Admiral, Ignis, Laden, Bauknecht and, of course, Whirlpool. Whirlpool has now become the only global player in what had been perceived as the stodgy and traditional world of refrigerators, washing machines and dishwashers. A strategic innovator, it is driving change and pressing its competitors to simply keep up -- to react rather than to challenge.

          While the emerging business cannot establish a network of its own factories around the world, today’s economy often demands a carefully-crafted global web of suppliers and even distributors. This is a strategy recognizing both transnational opportunities as well as competitive risks. And it requires the owner/manager’s hands-on commitment. "Is being physically on site around the world important for you?" David Whitwam’s response, "It’s absolutely important. I’m out of the country at least one week per month, sometimes more, and it should probably be lots more."

          "The Mapmaker," Kenichi Ohmae, former chairman of the Tokyo office of McKinsey & Company, was one of the first business analysts to recognize the emergence of the commercially borderless world. His respected 1987 book, Beyond National Borders, concluded that political boundaries "... are virtually meaningless today. In our new economic system, cooperation and interdependence, not conflict and independence, are prerequisites for survival."

          As a "mapmaker," Ohmae helps us to see the world in new and more relevant ways. In lieu of national boundaries, he now delineates 30 key regional markets around the globe. Customers are to be identified and differentiated by specific market characteristics, not by historic national differences. Even for the emerging business, he wisely observes, "The shift in the mid-1980s from variable to fixed costs in the nature of competition is one of the most important aspects of globalization."

          "The First Mate," Barbara Kux, vice president of Switzerland’s Nestlé, has gained recognition for her ability in selecting managers and joint venture partners able to capitalize on rather than react to rapid transnational change. Her seasoned conclusion: "The first trait of a global manager is to be nimble. Move fast but don’t hip-shoot. Do some analysis, but not too much analysis, and then act." Ironically, this counsel may be much better attuned to the emerging business than to the world’s largest food company.

          "The Financier" is L. John Doerr, partner with Kleiner Perkins Caufield & Byers, the venture capital firm that has launched some of today’s best known, creative and world-changing enterprises. In a marketplace that is now global for all businesses, he emphasizes the importance of having a sharp vision of one’s unique mission. "Today entrepreneurs invent new business models. ... the critical measure of the genius of any venture is not the market it’s in, but the way it’s in that market -- the business model it uses to beat the competition." Focusing on longer-term fundamentals, John Doerr’s conclusion may startle some, "If the choice is between making a difference and making a profit, I’d vote for making a difference."

          Like Navstar GPS, this succinct guide helps the owner/ manager of the emerging business grasp where we and all the components of our endeavors are today using today’s -- not yesterday’s -- maps. The audacious explorers of the Fifteenth and Sixteenth Centuries had only the crudest tools with which to work, and often sailed into calamity. Going Global offers an excellent guide to successfully navigating the treacherous seas of today’s world-girdling marketplace.

Your comments and suggestions for these pages are most welcomed!

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