Top 20 Destroyers of Value # 9 Not Keeping up with a Changing World…Are you a Modern Day Dinosaur?

Posted on September 19, 2012 · Posted in Blog

Forewarning: This may get a little harsh…don’t take it personally.

Entrepreneurship and business is, has and always will be one of the greatest examples of Darwinism. Those that do not adapt to a changing world go extinct. Those that lead the change and are early adopters reap the rewards.

There is a dynamic significantly impacting the business world and business value. Many are fighting it, some get it and those that don’t will become some of our generation’s Dinosaurs.

It’s never really been about the name on the door but the people behind it and many of those people are going independent and conducting business in a virtual world. I hear people my age fight it every day and insist on downtown offices, staff and in person meetings. I fought it, thought it and justified it as well.

To our generation, it’s the comfort zone…the way we always have and will run a company. However, like most disruptive technologies taking advantage of opportunities that come with remote staff and going virtual can improve the quality of service, drive down cost and create competitive advantages.

Business leaders who are not taking advantage of this are unknowingly driving down the value of their companies. As competition takes advantage of these opportunities and create competitive advantages, those that don’t will fall behind.

Let me give a couple examples. One of our new client’s is a husband and wife team that runs a professional services firm. They both graduated from top graduate schools in their field. They worked for leading companies in their industry, learned the business but instead of climbing the corporate ladder, they stepped out from behind the curtain of a big corporate name and went out on their own.

Unlike start up firms of the past, they didn’t worry about office space, support staff or lack of human resources. They took advantage of going virtual. The owners and employees work from home. Their employees are experienced, credentialed and highly respected. They don’t waste time commuting to an office for endless meetings and they don’t need to be managed and babysat. Their firm can ramp up research projects with support staff from all over the world.

When you work with their firm, you don’t work with a freshly minted associate who is using your project as a classroom like most “big name” firms do. Your service fee doesn’t include a downtown office, staff and a “blended” fee that includes a partner that you seldom see but support their endless perks and boondoggles.

You get experienced, proven professionals with no fixed overhead or imbedded resource costs. They are not alone. I sit on an advisory board with the owner of a company who employs over 300 virtual customer and back office support. They work for a fraction of the cost and overhead. She can ramp up in busy times and scale back when business slows.

I have to admit I have overcome my reluctance and our firm is now taking advantage of the opportunity. Our main financial analyst who graduated from a leading University works from home and one of his researchers works from home in Toronto. We utilize one of the most experienced and respected valuation analyst’s in our field to consult and review valuation reports while he is traveling in semi retirement throughout the US. Talk about a win / win!

(For a shameless plug, I can assure you we factor in a fraction of the overhead burden for a typical engagement and I’ll put our experience and credentials against any other project team in our field)

The advantages of a virtual world are all around. Early adapters are tapping into world class talent creating companies, utilizing support staff and eliminating traditional facility overhead to create lean, profitable and more valuable businesses.

Are you destroying value in your company by not taking advantage of this opportunity?

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