Dr. Pero Mićić
What specific opportunities do you have in the crisis?
Crisis Opportunity No. 06: Virtualize Your Business
Your future opportunities now in crisis? Virtualize your business. For strategic reasons, for efficiency and flexibility at the same time, and for cost reasons. A virtual company has many advantages …
Example: eXp Realty is a virtual company
eXp Realty is a brokerage firm in the USA. It is one of the fastest growing companies in the industry, with more than 20,000 brokers in North America. What’s unique about eXp Realty is this: this brokerage firm, whose core business and raison d’être is building brokerage, doesn’t have a single physical office. The entire company is virtual. It’s not a clunker. They do over a billion dollars in sales.
It is operated on a platform called VirBELA. Which is now also owned by eXp Realty. Some large organizations and schools already operate such platforms. But really serious as a replacement for physical companies, that is still rare.
Virtual enterprise: Home office, video conferencing, 3D virtual worlds
In the public perception, ‘working from home’ is already a major innovation that has presented more than a few with problems that are difficult to solve. The Corona Crisis forced millions of people to work from home and tap into the productivity reserves. At FutureManagementGroup AG, we only had to make one decision and from now on the entire team could work from home. Yes, we have it easy. Of course, this is not so easy for employees in production, assembly or direct customer service. But even with these tasks, more is possible than you might think at first. In any case, ‘working from home’ or home office is only the smallest step, as the example of eXp Realty shows.
Yes, of course, a face-to-face conversation is literally more impactful and effective. But when you know each other, a video conference brings 70% of the impact of a face-to-face meeting. But it also costs only 10% of the personal conversation. And if you don’t know each other yet, you might have 50% of the communication quality. It is still more rational.
It’s not just about ‘working from home’, it’s about ‘working from anywhere to anywhere’. Not just Teams, Zoom and Skype, but 3D virtual worlds. No, this is no longer just a gimmick. Tesla has been selling its highly emotional cars online only since 2012 from the beginning. The next step is entire virtual car dealerships. The possibilities for playful experimentation, for virtually assembling the car yourself in all its variants, are fascinating. The world of computer games shows what is already visually possible.
Of course, we are sorry about the physical stores. But if the virtual doesn’t convince the customers, isn’t better, they won’t accept it. Then the physical business models are better. The customers will decide. Just as in the case of Amazon against local retailers.
To virtualize, you don’t have to develop the platform for your virtual enterprise yourself, either, with multi-million dollar investments. You can rent a platform from several offers, and for a fraction of the cost of your offices.
Realize your virtual company – now!
For strategic reasons, for efficiency and flexibility at the same time, and for cost reasons. Now is the chance to achieve more than ever before. What do you get out of it, you ask?
You can more easily attract and retain good employees because they can better balance family and work. No, the future is not work-life balance, but life-integrated work.
You can solve the much-lamented skills shortage by expanding your geographic footprint. You can engage employees anywhere in the world. We’ll talk about the shortage of skilled workers elsewhere. Because it is not different from the customer shortage. It’s just a question of strategy, supply and price.
They, like eXp Realty save most of the cost of travel and offices.
Your employees will also spend less time on the road and rail if they travel less to the office and less to customers.
You can have your company’s headquarters anywhere in the world. But please pay your taxes here.
By virtualizing your business, you immunize yourself to some extent against disruptive competitors. Because if virtualization is possible in your business area, someone will do it quite consistently.
Sure, all this was possible even before the crisis. It only failed because of notorious thinking limitations, and of course, ingrained habits. Personally, I think a big factor was and is that leaders need the visible presence of their subordinates as a self-esteem booster. Just saying.
I know you are right. Of course, it’s not all plain sailing. But if it were easy, you know….
Strong team energy still needs face-to-face encounters. Our messenger cocktail in the head has not changed. Firstly, we are still social beings, and secondly, videophony and virtual worlds do not achieve 100 percent communication quality. And not all people are comfortable working alone. The conscientious become more productive. The extraverts and neurotics rather not. In addition, IT faces enormous challenges when it comes to security.
Your specific task:
Start with the obvious and simple: Take advantage of the momentum. Keep everything possible that has now been virtualized in the short term, and rather expand it.
Take a look at virtual platform offerings. VirBELA is a good starting point. In Germany, there is TriCAT.
Start with a function or unit in your company. Why not start on the board or in management? That would serve as a role model.
It should be clear that you need to proceed with virtualization with caution. So as not to overwhelm people. And that you don’t do away with physical resources altogether until virtual ones have proven their worth.
I’m excited to hear what you think about the virtualization opportunity!
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Have a bright future!