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Research Triangle Business Advisors
October 2012 Newsletter

Especially with the pending election, you can’t turn on CNN or Fox News without hearing about the changes impacting small businesses. The biggest challenge facing small business today is the volatility and unpredictability of change.

This month’s newsletter discusses what management can do to mitigate this volatility.

Bob De Contreras





Volatility Drives Unpredictability of change

What management can do about it

Volatility strikes more frequently than in the past. More than half of the most turbulent quarters over the past 30 years have occurred during the past decade.

Volatility has increased in intensity. Volatility in revenue growth, in revenue ranking, and in operating margins have all more than doubled since the 1960s.

Volatility today persists much longer than in preceding periods. The average duration of periods of high unpredictability have quadrupled over the past three decades.

Volatility in media/marketing alternatives. 52% of small businesses use social media, up from 42% last year.

Analysts say that the top growth companies show a change management advantage that is rooted in five capabilities.

  • Indication advantage. –The ability to read and act on change indicators.

    • Management supports and initiates reactive change.

  • Testing advantage.—the ability to experiment rapidly and economically to learn new and better ways of coping with change.

    • Management constantly tries new ways to do the existing processes.

  • Staffing advantage—the ability to hire the best personnel and organize in ways that promote adaptation, including enhancing knowledge flow, diversity, risk taking, collaboration, and flexibility.

    • Management focused on hiring only the best qualified staff and that fit the company culture.

  • Media advantage. –the ability to harness the diversity and adaptive potential of modern communication systems.

    • Management drives the use of new media alternatives – social media, email, video, blogs, etc.

  • Eco-social advantage.—the ability to continuously adapt the business model to changes in the ecological, social, and economic changes over both the short and long-term.

    • Management effectively balances short-term with long-term goals, and adjusts these goals in response to environmental changes.

What this article is saying is that to be a growth company, the CEO and management team must focus on working ON the business, not IN the business.  Management should hire good people to work IN the business and get out of their way, so that management can focus ON dealing with market volatility and responsive change.

Cary | Raleigh | Research Triangle Park | Greensboro | North Carolina
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