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How to Succeed in Today’s Changing Business World – Gaining Deep Insights into Industry Trends and Your Own Business

Well, it is indeed getting more and more difficult.
The business world suddenly reissued the question, changed the test paper, and threw it in front of everyone.
As a result, most people failed the exam.
How to solve the problem? This is a question that gets asked a lot these days.
The colder the winter, the harder it is to practice basic skills.
Only companies with a thorough insight into the nature of the industry and a deep understanding of their own business can have a chance to live well.

The global vice president was fired on the spot

When I was still working at Microsoft, Tang Jun told me one thing.
He said that every time he went to the Seattle headquarters to report on his work, he regarded death as home.
Before each job report, a bar will be reserved first.
If you survive the debriefing meeting, go to drink and celebrate with the executives. Otherwise, drink and break up.
ah? Is it that exaggerated?
Because the CEO of Microsoft at the time was Steve Ballmer (Steve Ballmer), reporting to him could lose his job at any time.
In the large conference room, Ballmer first sat in without saying a word. Sitting around him was a group of global vice presidents of Microsoft. These dark people were waiting to go up one by one.
Microsoft’s reporting style is to put 16 pages of PPT content in one PPT page.
A PPT, first divided into four, and then divided into four, filled with all kinds of text, tables, data, densely packed. Then use a huge projector to project the PPT onto an even bigger wall.
Then, one page, two pages, three pages. Scroll down, scroll down, scroll down.
Ballmer, just keep listening.
That scene was not a report, but a execution.
Suddenly, Ballmer interrupted:
Stop, stop, stop.
Ballmer pointed to the number on the wall and said, according to our business logic, your number, turn back to the third page, seems to be inconsistent with this. The numbers should be the same, please recalculate and explain.
After a calculation, it really does not match.
how to explain? how to explain? The global vice president couldn’t explain it, the numbers are just different, it’s just wrong.
Everyone present was covered in cold sweat, feeling like they were sitting on pins and needles. No one dared to make any sound.
Then, Ballmer called the global HR of Microsoft next to him, and fired the global vice president on the spot and immediately.
Because you don’t understand your business, you don’t understand your business. I don’t understand at all.

From a macro perspective, understand the nature of the industry
So, do you know what business you are doing?
Macroscopically, do you have a deep understanding of the nature of your industry?
Many people have worked in an industry for many years, but they are still a novice just getting started, and they don’t know the point.
If you can gain insight into the secrets of the industry, you will be able to grasp the trend and grasp the law better. Otherwise, it will be just a matter of repeating things mechanically for a lifetime.
For example, self-operated e-commerce, what is its secret?
Is it a logistics system? Is it the quality of the goods? Is it customer service level?
These are all important, but not essential.
Taking JD.com as an example, its secret is negative cash flow.
What is negative cash flow?
If JD.com purchases a batch of goods upstream, JD.com usually pays 60 days after receiving the goods.
How long will it take for this batch of goods to be sold? Generally it is 22 days.
Do you understand?
In other words, JD.com recovered the money from downstream consumers after 22 days, and then waited another 38 days before paying the upstream.
During these 38 days, JD.com doesn’t have to do anything, and it can have a large sum of money to use first.
Therefore, the bigger JD.com does, the richer it will be. The secret is that the upstream account period is greater than the downstream account period.
This is negative cash flow.
For example, bulk trade, those who sell soybeans, crude oil, and coal in the market, what is their secret?
Is it negotiating power? Is it a network relationship? Is it the shipping speed?
These are all important, but not essential.
The secret of bulk trading is advance capital.
What’s the meaning?
If you purchase a batch of oil from PetroChina Sinopec and want to sell it to a company in the United States, it seems that the business is very simple, that is, to transport the goods from the left to the right and make a profit, but in fact it is not the case.
Remember the account period just mentioned?
If you do business with companies like PetroChina and Sinopec, they won’t give you any payment terms. Pay with one hand, deliver with one hand, cash transaction.
But when you send the goods to the United States, will the American customers pay back immediately? Nor will it. They usually give you the money after three months.
This means that the upstream money must be repaid immediately, and the downstream money can only be returned after three months.
This is not doing trade at all, it is to advance capital first.
Therefore, if you want to do bulk trade, you must first have a large amount of funds to ensure your own safety.
Using this logic, let’s look at why many companies have broken cash flow. Maybe you will feel differently.
For example, the retail industry, what is their secret?
Is it cheap? Is it where the product is placed? Is it the hard work of the salesperson?
These are all important, but not essential.
The secret of the retail industry is the inventory cycle.
After you buy a batch of goods, how long can you sell them.
Suppose a mom-and-pop shop buys 100 yuan worth of goods and sells them for 150 yuan, making a 50% profit. The profit is good, but it takes a year to sell them.
As for another large supermarket, it may also buy goods worth 100 yuan and sell them for 110 yuan, only earning 10%. The profit is very thin, but it only takes a month to sell them.
So, who of them makes more money?
Of course it is a big supermarket.
Because the inventory cycle of large supermarkets is shorter and the turnover speed is faster, it can be sold 12 times a year, and a total of 120 yuan can be earned. And that husband and wife shop can only earn 50 yuan a year.
That’s why, I can sell it cheaper than you and earn more than you.
So, do you really understand your industry?
Did you know the general and the superficial, or did you gain insight into the essence and secrets?
Do you really understand?

Microscopically, understand the company’s business

I just finished talking about the macro, what about the micro?
On a micro level, do you have a deep understanding of what each position in the company does? What capabilities do you need?
do you really know
It’s like people often come to me and say, Mr. Run, please recommend someone to me.
OK. What kind of person do you want.
The other party thought about it and said, strong ability.
OK. In what areas are you strong?
The other party thought about it again and said, the solution ability is strong.
OK. So how do you define strong solving ability?
After the other party finished listening, they often sprayed a mouthful of blood onto the screen. God, I asked you to recommend someone to me, not to ask you to torture me.
Yes, but if I don’t ask, how can I help recommend it.
And asking this is equivalent to saying, do you really understand the ability required to do the job.
do you really know
But sometimes, when people ask me to recommend someone, I also ask.
OK. So what did you recruit this person for?
The other party thought for a while and said, responsible for sales.
OK. What exactly do you do?
The other party thought for a while and said, sales are specifically responsible for sales.
I know. But what exactly does sales do?
After the other party finished listening, another mouthful of blood sprayed onto the screen. God, what the hell are you asking, sales are sales.
When the other party answers this way, it means that he doesn’t understand the position at all.
Sales is the exchange of products for money, but this is only the result. What is the specific work of sales?
Such as market planning. What products are sold in which area, what resources are distributed in which place, and which customers give more discounts.
Like customer relations. How many customers are visited every day, has the CRM system been filled in, how are customers’ problems solved, and how to maintain the intimacy of customers.
Such as expense management. What is the budget for inviting customers to dinner and entertainment, what is the scope of reimbursement, and how to determine a reasonable expense.
These are things that sales should specifically do.
What to do? What to do?
This question is equivalent to asking, do you really understand your business?
So, can you know the responsibilities of important positions in your company like a few treasures, what exactly are you going to do, and what kind of abilities are needed?
If you don’t know, I suggest that you must re-count and think carefully.

In the future, what kind of company can live well?
Only those companies that can gain insight into the essence of the industry and deeply understand their own business have the opportunity to live well.
It turned out that everyone thought that they were talented players who could get full marks with just a little hard work, but it was only later that they found out that they were ordinary players who had to do their best to get good results.
Now, it takes not only hard work, but also courage and intelligence to be a contestant.
Examination papers are getting more and more difficult, and the requirements for players are getting higher and higher.
It used to be too easy to make money.
In the future, everyone will have to rely on their skills to make money.
How to do it?
What else can I do. Let’s fix it.