Entrepreneurial

Winning businesses will deliver meaning online in 2010

— Thomas Bonney is founder and managing director of CMF Associates, a financial consulting, staffing and recruiting firm based in Philadelphia, PA, that serves private equity, middle-market and small-cap public companies nationally. The views expressed are his own. –

Back in January 2000, we talked extensively about the “New Economy” that was expected to accompany the commercialization of the Internet. Then what I characterize as the “Decade of Speed and Connectedness” was upon us, in which 24/7 information transparency and accessibility imparted an overlay of urgency to every potential communication, task, or issue.

This all-encompassing connectedness drove the corporate decision-making of the past 10 years to be ruled by speed. The ability to focus on priority issues at hand was lost in the rush to be first to market, in the race to rack up website hits, blog comments, and online “friends.”

Such widespread informational momentum created pressure for businesses to stay in the online conversation 24/7, and expend valuable time and energy on both high and low return-on-attention “connections.” As a result, many firms adopted a mentality that simply “getting connected” with prospects and customers through multiple online touchpoints would be enough to meet customer wishes and objectives. What is now apparent is that such an approach actually created the risk of completely disconnecting from the real needs of customers, as evidenced by the fates of CD Now and AOL in the early part of the 2000s. Additionally there were the social media missteps that cropped up in 2009, such as Facebook’s “terms and conditions” controversy and Mars/Skittles’ one-sided Twitter feed that left negative comments unanswered.

January 2010 marks the dawn of what I believe to be the “Decade of Meaning and Consequence,” in which progressive businesses are realizing their challenges don’t solely revolve around getting the customer to visit a store or a website, but in getting them to stay and engage in a transaction. The previous “Decade of Speed and Connectedness” has rendered investments in rapid response and accessibility tools a given, but these initiatives only provide a competitive advantage if they lead customers to meaningful products and services that offer solutions to real issues. Without this healthy dose of meaning and consequence, we may bring customers through our physical and virtual front doors, but leave the back door wide open for them to walk right through to a competitor.

To ensure “meaning and consequence” is strategically embedded in connections with customers, businesses should pursue selective participation in online environments in accordance with their target audience’s preferences, which in turn should facilitate the ability to more actively listen, respond, and deliver meaningful value.

America’s economic recovery lies in the middle market

Thomas Bonney is founder and managing director of CMF Associates, a financial consulting, staffing and recruiting firm based in Philadelphia, PA, that serves private equity, middle-market and small-cap public companies nationally. The views expressed are his own.

In his 1988 Republican National Convention acceptance speech, George Bush championed the tradition of the American community, describing it as “a brilliant diversity spread like stars, like a thousand points of light in a broad and peaceful sky.”

More than 20 years later, this tradition still forms the core of our country’s strength – particularly the “thousand points of light” that comprise our medium-sized, family- and private-equity owned business community. I believe it is this community that will ultimately drive the tailwind of economic recovery and growth.

The economic healing power of these businesses is clear. According to the Small Business Administration, more than 6.7 million of the 27.2 million existing businesses in 2007 were small businesses with less than 500 paid employees. Just one hire by each of these firms would more than replenish the 6.46 million jobs lost since the recession began in December 2007 through June 2009.

Smaller companies continue to forge the strongest track record of job protection. The Labor Department’s Quarterly Business Employment data for Q4 2008 shows that, relative to the size of private sector employment, job losses at large companies were approximately one-third larger than losses in the middle market. Mid-sized companies with 999 employees or less accounted for 10.9% of job losses, while larger companies with 1000+ employees were responsible for 20.7% of job losses.

Middle market American leadership teams generally are innovators. The innovation we see on the ground is qualitative and anecdotal, but indicates a growing desire on the part of a subset of the middle market to begin to play some offense. This is not the sort of data that quickly moves through the labyrinth of channels used to generate state and federal government data that drives Wall Street and dominates media outlets; we expect that our qualitative observations will be validated in quantitative data by Q1 2010.

For instance, smaller companies are already taking the initiative to pick up the pieces of fallen “humpty dumpty” corporations. Many individuals displaced by larger organizations’ job-shedding are choosing to leverage their experience and relationships and start their own organizations which, in turn, will hire more employees. One example is a newly founded consulting firm that identifies orphan pharmaceutical compounds within large pharmaceutical companies, and connects them with middle-market companies whose cost structures are in line with the orphan compounds’ expected revenues.