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1. The majority of commerce for products
and services within a Non Linear era has moved away from essentials
and basic needs of people. These are now either a source
of loss or minimal added value, subsidized, or provided
free by governments. Added value is now restricted to ' erstwhile
non-essentials and what was described in developing economies
as 'luxury products and service.
2. This means that in future business cannot
expect to make profit from supply of demand or need. Profit
and added value will come only through the creation of
demand that does not exist per se before the offer for the
product or service is made. Earlier products were designed
as per need, now they must be "developed to create a new
need".
3. In a Non Linear era, management will learn
that fiscal management and planning will have to increase
their focus on "avoidance of loss" in the same way
as in the linear past they focussed on identifying profit
opportunities. In a Non Linear era, there will always be "greater
loss making scenarios than profit making opportunities".
If we can avoid loss then it is "most likely" that we will
make a profit !!! Avoiding loss will thus finally bring higher
returns to shareholders than seeking profits because in a
Non Linear era, the rate of erosion will always be faster
than wealth creation!
4. Our inability to manage the future basically
stems from the huge success we have experienced within the
linear era from volume and increased output as the ONLY indicators
of progress. This is now implanted in our psyche and into
our education and evaluation systems as the only concept of
growth which to our minds by definition can only come from
MORE! ( the mind reads this and says ..obviously!!) This is
the 'last obsessive perception' that stems from linear logic
and must be destroyed. In a nonlinear future, "more will
increasingly come from less". We have to cut costs,
reduce many consumptions, save natural resources and even
revive endangered animal life in order to insure a very basic
sustainability for ourselves".
5. Large size corporates will be more
'vulnerable to fiscal value erosion in event of product failure'
compared to smaller companies because increasingly in a Non
Linear era consumers and financial markets will place a far
greater value based on "perception of the future than on
past achievements". (Unfortunate, but true!)
6. Globalisation of products will reduce
in favour of services as is happening over the last decade
and this will increase once man-hours are easier to trade
in digital format and routine communication permits live interaction.
This will imply that manufacture of products will decrease
from locations that were chosen only based on a lower labour
cost. ( developing economies need to be aware of this) Production
will naturally move "closer to the point of consumption".
There will be greater savings to offset the increased labour
costs. These will come from inventory management, the ability
to accommodate shorter product cycles, better fiscal rotation,
faster response to customer needs and diversity.
7. One of the most critical errors of
the linear era has been in the "valuation of Intellectual
Property". While IPR will be the primary commercial product
of the Non Linear era it has been subjected to linear logic
in its development and commercial costing.
8. Intellectual Property is created at a
cost based on the developer-owner's income. Its value however
is dependant on the buyers income and demand!! If an IPR has
no demand it has 'zero value'! The charge for IPR thus has
to be amortized OVER THE BUYERS INCOME AND NOT THE DEVELOPERS
COST!! The method to calculate this is easy and transparent
and can be based on "per capita income or expenditure of the
USER for that product or service category". The so called
"loss" that is perceived by the owner of IPR is notional and
erroneous because at 'their' price there is no demand and
at a lower IPR value the volume "compensates for this loss".
As an example India spends a mere USD 50 per capita on Healthcare
and it is USD 2000 in the USA and rising. SO 40 Indians can
contribute ONE UNIT OF IPR AS RECOVERED IN THE US!! An amortization
of even 25 units will mean a greater profit for the owner
of the IPR because the population can provide the volume and
numbers to finally give a "higher earning from IPR to the
owner".
9. Linear Logic has spawned cliché's such
as "Change is the only constant". In a Non Linear era, management
will have to develop skills and attitudes that consider 'change"
to be a perception that is caused by "our own state of
unpreparedness". Explanations like " this was not expected"
will become unacceptable because in a Non Linear era we in
any case should not be expecting the future to follow any
forecast able pattern or emulate the past norms. SO HOW DO
WE PLAN??
10. Planning can become simpler for the 'executors'
and more challenging for the managers and decisions makers.
All through the linear era, managers have had an exceptionally
easy task in making decisions that were basically "instructions
based on substantial past based research, experience and resources".
NOW, within uncertainty, planning will have to be based
on "negation". Senior decision makers must now decide
"what should not be done or what the corporate will not do!!".
Everything else will then be permitted by default …… a TRUE
empowerment for efficient execution that provides flexibility
as per market dynamics.
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