How Companies Cope

So how do businesses survive in this ever-changing flat world? Primarily they must be ready for and able to change. This is not the end of if, Friedman has outlined nine rules companies should live by to cope in the flat world.

Rule #1: When the world id flat what can be done will be done. The question is will it be done by you or to you. This rule is simple if you have an idea you should pursue before someone else does. Freidman gives several examples of individuals that have turned great ideas into successful businesses. They key here is many of these things would not be possible if not for the opportunities available in the flat world.

Rule #2: Because we are in a world where whatever is can be done will be done, the most important competition today is between you and your own imagination. This is a theme that has been present throughout the book, the power of the individual. Here Friedman talks a little more about how we can use this power in our companies. Companies need to stretch their employees’ imaginations in order to thrive. This how companies will remain competitive by using their imaginations and tools to maintain constant innovation.

Rule #3: And the small shall act big… One way small companies flourish in the flat world is by learning to act really big. Imagination is necessary, but not sufficient. You have to be able to implement what you imagine. And the key to being small and acting big is being quick to take advantage of all new tools for collaboration to reach farther, faster, wider, and deeper. May be it is just me but things started to get a little repetitive here. It seems like here Friedman took the advice he gives the individual and applies it to the company. Obviously, imagination is not enough to be a success you have to take advantage of the tools available to you. The example Freidman used of Aramex split with Airborne exemplified this perfectly. I would say the reason this is not done more is people do not realize what tools are available to them.

Rule #4: And the big shall act small…One way that big companies learn to flourish in the flat world is by learning how to act really small by enabling their customers to act really big. This is a great idea and companies are actually better for it. When companies let customers “serve themselves in their own way, at their own pace, in their own time according to their own taste.” They are actually making them employees. After all, who knows what the customers want and need better then the customers. I think many companies start to get so big they forget that they need their customers.

Rule #5: The best companies are the best collaborators . In the flat world, more and more business will be done through collaboration within and between companies, for a very simple reason: The next layers of value creation-whether in technology, marketing, biomedicine, or manufacturing- are becoming so complex that no single firm or department is going to be able to master them alone. I had a difficult time understanding this rule. The examples did not necessarily seem like great collaboration efforts. It just seemed like the natural evolution of these companies. Rolls Royce realized the U.K. market was not big enough so they expanded, and video games companies realized games sell better with music. To me that is natural growth. In a global economy, companies must evolve to be truly global to be successful.

Rule #6: In a flat world , the best companies stay healthy by getting regular chest x-rays and then selling the results to their clients. What? That was my first thought but this does actually make a lot of sense. You need to constantly analyze your company’s capabilities. If something does not add value why do it. When you otsource the non-essentials you can focus on your “hot spots” and develop them. That is how HP ended up providing backroom services to the Bank of India.

Rule #7: The best companies outsource to win not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, gain market share and hire more and different specialists-not to save money by firing more people. This falls in line with the last rule. If something does not create value, it would be best to outsource and improve your company by focusing on more value-added activities. I believe many companies jump on the outsource bandwagon because they think it is all about saving money when it is not. Ironically, like LRN, I think companies realize the need for outsourcing when they are ready to grow their business.

Rule #8: HOW you do things as a company matter more today than ever. Price differentiation and service quality are no longer enough to set your business apart in the market. Today it is about how you treat your customers, colleagues, suppliers, and investors. This is one of the few ways you can still differentiate yourself from your competition. As Friedman says, companies today are a lot more transparent so the “how” is really out there for everyone to see. Today’s customers have so much power and it is essential that companies realize this and use it to their advantage.

Rule #9: When the world goes, flat- and you are feeling flattened-reach for a shovel and dig inside yourself. Do not try to build walls. This rule was the most interesting to me. The struggle Greer & Associates faced was one probably faced by many midsized companies. The Flat world , was supposed to make things easier but they found things only becoming more difficult. Once companies realize the need for change they should act on it. Companies have to tie all these rules together to survive building a wall simply will not work!