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Asian organizations have become used to steady state markets and defined, although fast growing, markets. Organizational cultures as a result, are slow to change. Hence the relative inertia when the internet and e-commerce revolution reached our shores. Established firms in the Asia Pacific have major advantages over start-up ecommerce firms due to existing strong customer relationships and distribution channels. The problem is how to jump start the organizational inertia and jealousies that occur when an established organization embraces e-commerce. The problem is Global. Even NBCi, the new website for media giant NBC in the US, has had a shaky start, not only due to an inconsistent acquisition policy, but due to organizational politics. Rather than supporting the Web arm of the enterprise, senior managers not involved with the NBCi venture have preferred to set up their own Web ventures. The result - an increasingly shaky brand - poorly integrated with the core business. In the wake of a slow moving management, unable to adapt to the pace of change in the Information Age, many companies have set up fairly automonous units to develop the e-side. Jeans and t-shirts, flexible though long work hours, an organizational culture more suited to the demands on e-commerce. Problem was that with the new ventures came increasing funding demands to keep up. And the old management, faced with decreasing budgets, has to catch up fast. In an Asia where personal and face-to face relationships are king, many top management failed to see that the world is indeed changing. And in an Asia where new ideas have a harder time being accepted than in other regions, it is no wonder that e-commerce start ups, managed and staffed by younger innovative minds often frustrated in old economy companies are grabbing all the attention. However many of these start-ups, on the other hand suffer spoiled youth problems that wiser minds could temper - a lack of attention to planning, detail, and understanding of the big picture. Again, it is no wonder that Internet start ups in Asia are suffering the same fate of their precursors in the West. Glamour start ups in Hong Kong like Tom.Com and Pacific Century Cyberworks are now attracting stock valuations similar or less than their initial offerings. The situation is even worse in China, where a whirl of pent-up youthful entreprenuership has resulted in a mass of Internet portals as an example of one class of new economy offerings, clamouring for the same market. While financial analysts are fond of attributing the global dive in hi-tech and internet-related stocks to investor misgivings on the value of the new e-economy as a whole, the an alternative reason is even simpler, and more substantive - and it relates to organizational culture and structure. Management gurus from Drucker to McCluhan, Ohmae to Peters have signalled for years that the information age would be characterised by fast change. The reality is that even lean hungry new economy start-ups can not even hope to keep up with these changes. While one development group is busy at work in an office developing the next big thing, they can be absolutely sure that somebody else has the same idea, and are at work as well, blissfully ignorant of their competition. Worse still, in the new global economy, these competitors could be at work anywhere in the world, not just in your patch. Product life cycles are decreasing fast. Yesterday's good ideas are swept on to today's garbage heap. That is why we see similar products and services hitting the market at the same time. Dr Koop was followed fast by several otehr medical information sites. Now Dr Koop is gone, and others are in the critical ward. High profile Cosmetics Web sites have gone smelly, and the retailing field is littered with such business disasters as Boo.Com Our traditional methods of competitive research and consumer market research are far too slow to provide the required information to build a half decent business strategy. And that's just the international stage. In Asia, some organizations, including those in our region like Singapore Airlines, have become leaner, and able to react to changes much quicker. But the great majority, dictated by family control, led by privelage rather than competence, and constrained by top-down rigid and formal structures have been relatively slow to adapt. Lack of Competitive intelligence and even knowledge the of the fast changing nature of the market and consumer needs and motives is a key reason behind the present problems of e-commerce start-ups. Given that, the opportunity for old economy companies with the competitive advantage of established consumer and logistical networks is a plus in the new economy, if, and only if, cultures and structures can be changed to accomodate new e-commerce opportunities. Established companies in Asia usually have built up solid procedures of product testing and they have built up brand and customer loyalty through personal contacts. These personal contacts are a source of competitive intelligence. If only these companies could harness the ideas and enthusaism of their youth, and hitch it up to the wisdom of age! Worth thinking about, but here are some ideas -
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© Asian Business Strategy & Street Intelligence Ezine 2000
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