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FUTURE WITHIN A NON LINEAR ERA
 
IN MANAGEMENT AND COMMERCE
 

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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