Special Challenges

Moving at the Speed of Light
When comparing a commercial enterprise to a military or other government enterprise, one might be too quick to assess that the commercial environment is more flexible and forgiving in total than are its two government counterparts (especially if you read our section on Military Focus). Not so. It is true that the military or other government enterprise is more likely to be tasked with an inflexible mission within rigid parameters over which it has little control. On the other hand, the military or other government enterprise often has protection from its would-be competitors and therefore has more time to adapt. Not so for the commercial enterprise.

The commercial environment presents its own set of threats and business environmental hazards. These same threats provide opportunities for the commercial enterprise if it is performance based, lean and agile enough to exploit them. Consider the following:

• The convergence of industries and technologies (such as: residential cable, telephone, and high-speed Internet) have broken down the barriers to entry in most technology based industries; allowing your competition to come at you from every direction.

• An emphasis on 90-day performance horizons, based on Wall Street expectations, means you’re never more than a couple of months away from your next report card or pink slip.

• Commoditization of many industries means that customer loyalty and contract incumbency have never meant less to a potential buyer. On the retail side, the world has turned upside-down. Previously consumers would select a store first and then decide what to buy. Now they decide what they want, decide what they are willing to pay, and then let retailers “fight” for the right to sell to them. The Internet has been the great facilitator in this regard.

• Global competition armed with the best technology means that any inefficiency in your enterprise will be exploited immediately. Any available innovation that you don’t integrate with your enterprise will make you obsolete.

This list could go on and on, but Bill Gates said it best several years ago when he asserted that Microsoft® is “never more than two years from going out of business.” If he were saying that today, he might reduce it by a year.

Opportunities Exist Clearly, businesses do thrive in today’s environment, and some have shown the ability to stay on top. The commercial enterprise has the freedom to set its corporate mission, vision and major business objectives, as well as the strategies to implement them. Commercial businesses typically position themselves in the market by trading off elements of product and service quality versus their cost and price structure. The accompanying diagram depicts a wide range in which the commercial enterprise will position itself. There is no universal “right answer” for where that should be as this will vary by industry type, maturity, target markets sought, supply & demand within target markets, etc. While companies are free to establish their own brand and business model, their branding strategy has a tremendous impact on the formation of an optimal enterprise architecture. Crucial decisions must be made. For example:

• How should we structure our strategic business units?
• Should we produce oversees or at home?
• Which of our functions should we outsource, which are core to our brand?
• Should we license content and intellectual property or should we invent it ourselves?
• How do we optimize our organization if we are … a low cost seller, a differentiator, or a niche provider?
• How do we optimize our sales channels and customer relationship strategies?
• And perhaps the hardest question of all … Exactly what business are we in, how has it changed, and what does that mean to our enterprise?