Sunday, May 21, 2006

Make Nice Venn Diagrams



ESC © - The Source of Success

Ever wonder why some companies are more successful than others?

The most likely origins as the answer includes more power, more capital, well-trained sales team, great product knowledge, financial management austere and controlled, more talent or intelligence, the greater will to succeed and a willingness to take risks above average. Statistically it is proven by studies, that these are precisely the most frequent responses of most business executives. Those who have had to combat a life with limited success, seek solace in that there are some hurdles, which are almost impossible to jump. To this add up to complement the difficult macroeconomic conditions in which they operate.

is a fact that many individuals and companies have achieved outstanding success, despite having left under unfavorable conditions over others.

Wolfgang Mewes, German and research systems, discussed for years the reasons for success of individuals and businesses. After years of methodical research concluded, that consciously or unconsciously, all came under a similar strategy. Mewes reached his first conclusion:

success depends solely on the strategy

The essence of this strategy Mewes first systematized and more than 30 years is known as EKS ®, the most successful strategic thinking and methodology in all Europe with more than 2,000 advisers and consultants formally assets under the eaves, over one million cases has been applied worldwide. The strategic principles today are the same then, only areas have adapted to find innovation and change environment. In the areas of strategic development of SMEs, human resources, career planning and processes of innovation and change, EKS ® is now the most successful methods in Europe, with strong attacks on the U.S. market. Adaptation to the idiosyncrasy of Latin America is called Strategy Focused Senses (ESC ©).

What is Strategy?

Strategy is the way, how and why the human being or a company uses their skills, manpower and resources toward a goal. In an even more specific, the strategy of teaching how to use these skills more effectively forces and media.

Few will be working with such strategic awareness. Thus the failures or the "status quo" are far greater in number than the successes. In Latin America these differences are even more pronounced, not only within countries but also facing the rest of the world in a global inevitably.

According to the experience of thousands of cases it has had to face the EKS ® for over 30 years, passing from the oil crisis in the '70s to the Russian recession of 1998, as well as dozens successfully resolved cases in Latin America very different adverse situations, it is easy conclude that it is more important to invest heavily a few months on improving the strategy, which spend their lives working hard to achieve a moderate success and unsure in front of the dynamics of change.

Strategic thinking - today more than before - is a "key technology"

The strategy will identify and use the forces and means. Against competitors to think about technical and economic categories will be a definite advantage. At the beginning of a process of strategic change, each firm has limited resources, which may use more or less effect. The key questions are: Is

real will to change of thought?
How these forces are used?

Even the best know-how has no value, if used strategically wrong.

"The difference between a good and a bad strategy can not be that big," many skeptics believe, conservative and afraid to change thinking. The difference of effect is exemplified by David and Goliath, where the "weak" David beats Goliath substantially "stronger." Why? Just because it used its forces more efficiently and also in the most effective. David knew nothing of EKS ® or ESC ©, but the principles are the same and applied to the company are summarized in what I call Basic Principles of the ESC ©:

1. The principle of concentration instead of "paper" or dispersion. The "paper" is dispersion of forces in the most diverse activities not excel in any particular. In popular saying: "that all trades." The really successful and influential companies are leaders in a specific segment and will be almost impossible to be in several at once. Experience has shown that the dispersion can have different sources: Customer
• Counseling misunderstood. "The customer is king" is a fatal error, leads to chaos because it is impossible to get along with everyone, leading to a diversification which weakens the service, logistics, cost structure, etc.
· Entrepreneurship pioneer too pronounced. Very technologically oriented companies tend to get excited over their own inventions, ignoring what the market really wants or needs.
· Fear of a drop in demand. Especially larger companies, "depend" on a diversification strategy ("we will not all eggs in one basket"), whose origins lie in the financial thinking (theory of portfolio investments). Extrapolated to trade policy, encourages the dispersion rather than concentration, "" as the risk and reliance on focus all in one area is too high given the fall in demand "
Do not dispose of ineptitude. Times change and customer needs. Just some successful companies eventually face new opportunities in new markets. This will add new products, services, target groups, markets, etc., which require great energy, time and resources. There comes a point where the amputation of some of these is necessary, but nobody wants to do. The dispersion persists.
· Goals very general. Those without goals clearly stated and known to all within the company become the market game ball and stop there where others do not want to go. Dispersed companies fail to take root and thus its business areas are dictated by clients and even settle for the crumbs left behind by competitors. Sometimes it works to survive, but not as a strategy for success.
· Diversity of interests. "Specialization is boring, because it always does the same thing" often the most creative comment. Adapting to changes in a specific field requires expertise, innovation and creativity, even more than in diversified fields, with the difference that by distancing concentration against competitors is growing. Not just because of specialization, but in the most efficient and therefore also require creativity.
©
With the ESC can learn how to defend yourself from the temptation of the dispersion and thus of "paper"

2. The principle of effective point. Already in the initial phase of the methodology ESC © the concentration will be in one's own strengths, ie what you do better than the competition. The main task of an enterprise to solve problems and tasks, as well as wants and needs. Markets are interconnected systems that act as an intertwining their network elements (employers, employees, customers, suppliers, partners, etc.).. These elements are fairly visible, but those who fail to clearly visualize the structure of this network, becoming entangled in it. While most people know who lives and works in interconnected systems, also thinks and acts as if they had limited impact forces: technical optimize technical processes, the financial economists, the business of marketing, etc..

not how but where is the decisive point. Do not try to match competitors, but build on their own special strengths is critical. Point more accurately is more important than the size of forces.

In interconnected systems there are basically two strategies behavior:
1. Increasing the inclusion of resources. More knowledge, more capital, more personal. The premise is: how much do it.
2. In each situation, aims to place more effectively. The more dense interconnection - which is an important feature of our global world - more important is to aim correctly to include the available forces.
©
With the ESC can learn, how to run own special strengths in the most effective.

3. The principle of the minimum. The question is how actually target the most effective point in interconnected systems? In the mid-nineteenth century Justus von Liebig scientist, discovered that the four elements required for plant growth (now known that there are more, but this does not change anything in the beginning): phosphoric acid, lime, potassium and nitrogen. If you miss just one of these factors, growth stops and even if other items are available in excess. Called "minimum factor" to the small element, which inhibited the growth process. Mewes discovered instead that the principle of von Liebig in agriculture, was equally valid for use in social and economic systems.

What relates von Liebig fertilization according to the company?
According to Mewes research on successful companies, joined the corroboration of the relationship between plant growth and the discovery of von Liebig, in which a significant part of the art of management was then, always provide a system the bottleneck factor, ie that need little more than required at present and even more urgent for development.

• In an enterprise, the minimum internal factor is the bottleneck of success. Shows the problem that prevents a company can offer to your target the optimum benefit. If all forces are concentrated in clear this bottleneck, the company can develop a lot better. The most effective point to focus the strengths, will always be in the bottleneck factor. No single company to survive and grow, but all other systems that surround it (traders, clients, suppliers, etc.).. All have the same need. The better to concentrate the activities on the basis of the interests and needs of people in the environment, the opposition is relaxed.
• In an enterprise, the minimum external factor is the key to success. The relationship between growth and bottleneck factors in the ESC © is twofold, differentiating between minimal external factors (primary) and internal (secondary).
minimum external factor limiting the development and success of a company's target group. If possible provide the target group this factor at least, will lay the groundwork for success. Since each system (including humans) desires to continue to grow, demand more strongly that it inhibits the growth factor (bottleneck). Those who possess the ability to "liberate" the most burning problem or need, you can be sure that their products or services will be sought and accepted in larger quantities.
©
With the ESC can learn to find the bottleneck for the development in an interconnected system, ie the most effective. Those who achieve its target group to provide this minimum factor, you can expect a greater acceptance and demand. But the point is how it benefits the target group and not, how best to solve internal problems (thought and action rather introverted extrovert.)

4. The principle of profit maximization rather than profit. Each year, across company make thousands of decisions and choices depend on your goals.

a company's success is determined:
· For the type of goal
· For the reasons that originates from the goal
· For clarity and concrete that is the goal
· By the way in which consistently pursued
kills
The right goal:
• It is objective
• It is known in a concrete way for all who are persecuted competence
• It is more consistently than the competition

What is the best goal objective?
some time, modern management has a very simple answer to this question: higher profits. Although there may be differences of assessment, there is consensus that it is a sum of methods to dispose of the company profits. Balance, finance, costs and steers the decisions of managers as a compass in the direction of maximizing profits, which in turn are a measure for business development and fitness directors.
More than one employer could be more social and its decisions would be guided by human emotions such as friendship, loyalty, compassion and understanding. But a company can only be as social as it allows competition and profit situation.
Will earnings then contribute to the common good - or not? Profit maximization is increasingly exposed to criticism, even among business and science. Why?
First, in an economy totally geared to earnings, the common welfare falls short.
Second, the more a human being is oriented on profit and personal gain, the more interpersonal relations are reduced to purely material. The negative effect of profit-centered behavior and therefore selfish, has been found by researchers of human behavior.
Third, "a company needs to gain as much as the human breath." That's right. However, it is more correct, that the more consistently and to better meet a company meets a specific need, the faster maximize - among others - their profits. Conclusion: profits should not be the end, but the consequence. Getting
gains
socially compatible
This has nothing to do with socialism, Christianity, social market economy or any other dogma. Points to a distinction between profit maximization indirect or direct.

world's best known instruments for direct profit maximization are: displacement
· Competition poster
· Training
· Application of power
· Sale
• Even aggressive, crime (fraud, theft, corruption, drugs ... )

Instead there is only one tool for maximizing profits: increasing benefits for the environment. The gain would be the inevitable consequence. Profit orientation on earnings acts as a filter, creating a more positive image of the company, enterprise and market economy. The difference seems small, but crucial: the maximization of profit leads to conflicts, tensions and interests, while the indirect causes a reduction in interests and integration of supply and demand less confrontational and aggressive.
©
With the ESC can learn how to define business goals that are crucial for long-term success. Learn that the ultimate goal of the company is to solve problems or meet needs, offer the most benefit to your target group. Practical experience over 30 years has shown that this indirect way of maximizing earnings, earnings leads to more durable and less wear simultaneously, conflicts and risks.

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