Online Business Effectiveness: What Makes It?

What makes an on-line business effective are the same ingredients that make any business effective. The only difference is that in an on-line business we dont see our customers. We dont see the other people who work in our business. We dont see most of the people we bring in to the business. But the principles are the same.

I did a research study a while back to find out the out the most common factors of effective businesses. My study design was a meta-analysis. All that means is that I studied what other people had already studied about what causes businesses to be effective, and I listed the factors that were most often mentioned. The meta-analysis approach is considered the most powerful of research studies, meaning the results are considered the most valid.

After pouring over all the literature on successful business practices my findings boiled down to the following core.

1. Effective businesses build into their organization a culture of change because their leaders seem to understand, as William Bridges put it, that unless organizations change and change quickly they will not survive. That makes sense. I teach cultural anthropology at a local University. I teach my students that one of the fundamental features of culture is that all cultures are always changing, and cultures today change more rapidly than ever before in history. And of course people change. The defining measurements of the pre-computer Cold War age was fear, control, and protection.

According to New York Times Pulitzer price winner Thomas Friedman, the defining measurement globalization is speed. The most frequently asked question in the business world used to be, whose side are you on? The most frequently asked questions today is to what extent are you connected to everyone? According to the Central Intelligence Agencys Fact Book, there were 934 million internet users in 2004. It is estimated that there will be 416 million new internet users by 2007. At that rate 16,000 new users enter the world of the internet every hour of every day. Thats change and thats speed. The most successful businesses understand this and they are constantly adapting to tap into the resources these new users represent.

2. Effective businesses share information. The reason for this is expressed best by Sally Helgesen. Withholding information and power from others assumes they are incapable of handling it and it deprives the business of a rich and powerful resource. Lets face it, trade secrets dont exist in todays information rich, speed-driven world anyway. Effective businesses also share information because they want everyone to see how the whole organization functions. This enhances understanding and in doing so enhances commitment, a powerful principle for business effectiveness.

3. Effective businesses have a high tolerance for mistakes. Thats because no mistakes mean no experiments. It demoralizes and reduces creative insights that could literally catapult a business to higher performance. Edison was ridiculed for spending almost every waking hour of every day trying to find a way to produce light through connectors inside of a glass bulb. When asked why he didnt quit and spend his time on more productive activities he answered, each time something doesnt work Im that much closer to finding the solution because Ive eliminated one more application I know doesnt work. So effective businesses tolerate mistakes. And in operating an on-line business you will make more mistakes, and so will your affiliates, and youll be tempted to give up and quit, but you must remember that every mistake you make is a valuable learning experience, and you are one step closer to discovering the light that will generate the wealth you seek.

4. Effective businesses focus on the mission. I often refer to Peter Drucker as the mentor I never met. Hes over 90 years of age and has written some 100 books on management principles. Ive read most of them. According to Drucker, effective businesses constantly ask, what is our mission. What are our goals. They do not start with the question what do I want. They start out asking what needs to be done? Effective businesses do this because they know if they are to survive long-term they have to have a reason for being beyond just making money. Thats why the mission statement of MacDonalds is to be the worlds best quick service restaurant experienceso that we can make every customer in every restaurant smile. Coincidentally, MacDonalds has also made a lot of money. If your only goal in wanting to get into the on-line business field is to make a lot of money for yourself you may achieve some short-term success. But you wont find ultimate happiness. Youll squander your earnings and wind up in worse shape than you are now. Look at the many retired professional athletes who made millions during their careers and are now living in poverty. These arent the ones you read about, but they are by far the majority. Mike Tyson is probably the most noted example.

5. Effective businesses teach. This may surprise you, but I found in the most successful income generating businesses their in-service training related more to behavioral than to skills training. Thats because effective businesses leaders know that what is needed most from employees is commitment, and commitment comes from values. They want people who have values beyond the workplace and who are in tune with their inner selves more than they want people who have a specialized skill. Thats because that specialized skill, lacking a commitment to a cause, can go anywhere anytime and cause the business to lose a valuable asset. And the wise business leader knows that the best way to evoke commitment is by emphasizing both organizational and personal values in everything that is communicated.

I hope you understand what I am about to say and you will not take it as high brow or self-promoting because it illustrates an important point on the principle of teaching. People often ask what my wife and I did that caused our children to become such responsible adults who really have their lives together. What kinds of rules did we have while the children were growing up? Were we demanding about homework and chores, etc.? Today our two sons and one daughter are all not only active, but they are leaders in church and community service endeavors. No theyre not perfect and if they read this they would say, Dad, youre exaggerating. We made a lot of poor decisions when we were young. But none of those poor decisions invalidated the values they were taught and that became implanted into their hearts that make them what they are today.

And you know what? We didnt have a lot of rules. In fact we were pretty lax about when they went to bed and how much television they watched. Now Im sure we made mistakes, but what we did do is emphasize values and tried to be an example of the values we taught them - values like honesty, integrity, caring for and being concerned about others, sharing, trusting, etc.

Ill never forget the day our daughter, who at the time was 18 years of age, was driving past a major intersection with her younger 9 year old brother in the car with her. She saw a man standing at the corner holding up a sign saying he needed money. Rachael drove to the nearest MacDonalds, purchased a Big Mac Meal drove back and parked the car near that same intersection, and asked her brother to go over and hand the Big Mac meal to that man holding up the sign. All three of our children have been doing things like this ever since. Why? Because they learned that we should take every opportunity we have to help another person in need, and they learned another important principle. The more we give the more we get back. Its an eternal principle and it is fail proof.

So to summarize, if you want to be an effective on-line business entrepreneur incorporate these 5 principles of demonstrated effectiveness and you cannot help but succeed.

1. Build into your system a culture of change so you will have the capacity to adapt and respond quickly.

2. Share information freely so others can benefit from what you have learned.

3. Tolerate the mistakes of others so they can be freed to experiment with new ideas.

4. Focus on the mission so you will always be in tune with your reason for being as an on-line business.

5. Teach others and dont get too caught up in teaching skills and techniques because competency alone will never satisfy the deep longings of the soul. You also need to teach values.

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