Meaning Based Management and Ideology
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Following several years of research, I have reached the conclusion that Western companies tend to limit their involvement in Russia and other countries where they have opened offices to executive functions only. The strategy remains with the parent company. Furthermore, the discussion of metastrategies, or strategies of strategies, is not permitted. The branches are provided with informational materials, including sales kits. In summary, this is a set of arguments and strategies for negotiations, sales and marketing plans, theses on upcoming PR actions and events, and other highly specific instructions and guidelines for conducting business. It is noteworthy that the creation of this documentation is carried out by individuals who are not publicly known, particularly within the branch. The company thus protects its business at the highest level, ensuring that key strategic issues remain within its control while allowing for flexibility within defined limits, with a system of control and incentives in place. Consequently, a notional corridor is established, which, if executed correctly, will lead the company to achieve its desired outcomes with a high probability. It is essential that the head office consistently collects feedback and analyzes it alongside the planned strategies, making any necessary adjustments to ensure optimal future performance. It’s an excellent system. It should be noted that the above description is a collective representation of a Western business operating in international markets and should therefore be treated as an idealised model.
Planning horizon
Another aspect that has been a surprising discovery for me is the planning horizon. All of the aforementioned companies plan a decade ahead, then create a sales plan for the year that branches split into quarterly and monthly plans. Even companies operating in Russia have a long-term plan in place. For an extended period, my inquiries regarding the “how” of the process went unanswered. There was a lack of trust. However, I began to receive responses.
One of the prominent Swiss business leaders who has had a significant impact on my professional development once stated that he consistently employed a strategic approach, even when he initiated his operations in Russia during the mid-1990s. At a minimum, for a period of 10 to 15 years. This was in the 1990s. At that time, planning was generally viewed as an unproductive exercise due to the rapid pace of change in the country. Moreover, the majority of Russian entrepreneurs remain unconvinced by this approach. This is due to the fact that the technology in question is no longer in use.
As previously stated, international companies only transfer executive functions to Russia, whereas strategic planning is a management function. Consequently, this knowledge is not shared at the local level, and in general, it does not extend beyond the head office in the West. Furthermore, Russian technologies were effectively buried under the remains of the former Soviet Union and its Gosplan. First, the significance of the country and its five-year plans was diminished, and subsequently, essential abilities and expertise in long-term goal-setting were neglected. At one time, for instance, these contributed to the nation’s advancement in space exploration or facilitated a breakthrough in nuclear power. The fact that we have forgotten how to do it does not mean that it is impossible to relearn.
As a first step, I suggest familiarizing yourself with foresight technology. For your information, Google employs this method to describe scenarios for the next 50 years. As an example of strategic planning, we can look to the approach taken by Ilon Musk. I recall that in 2015, few people were aware of his reputation. That’s when I had a conversation at the Higher School of Economics, where I was pursuing my MBA, and such conversations were relevant. I was promoting the idea that Tesla’s core business is not cars. It’s about a high-end takeover of the entire automobile market and expansion into other markets, even those that are not directly related. In summary, the key takeaway is that.
Lesson from Ilon Mask
The internal combustion engine has a relatively low efficiency rating of less than 25%. The physics curriculum in our educational institution. The most efficient electric motors achieve 90—95% efficiency. Furthermore, the use of an electric motor obviates the necessity for a gearbox. Furthermore, this is a highly complex and costly component in the overall design. In summary, electric motors offer a more efficient, cost-effective, and straightforward solution for automotive applications. Therefore, 99% of the automotive industry as a whole is eliminated. The results show that the top performers are not the industry incumbents.
The next item on the agenda is Artificial intelligence technologies, which were initially perceived as ambitious but which Google was already actively developing, eventually resulted in the advent of autonomous vehicles that do not require a human driver. From a technical standpoint, this has already been achieved. It is common knowledge that Tesla has developed an autopilot system and that Yandex has made significant advances in this field. The vehicle is therefore capable of driving itself.
This is where my expertise in financial matters becomes relevant. Therefore, the vehicle purchased and situated in close proximity to your residence, rather than being utilized on the road and generating revenue for you, is merely idling and incurring losses due to depreciation, taxes, inflation, and the cost of capital if the vehicle is financed. The vehicle could be operational on a 24/7 basis. This is why Tesla designed models with cameras pointed into the cabin. Ultimately, it is the passenger rating and other cab chips of the future. We bid you a warm welcome to the world of social ratings.
The next item on the agenda is… It is essential that cars be charged. It would be prudent to consider whether it is necessary to outsource this significant and valuable source of power. Let us consider generating our own electricity. Traditional methods are dominated by government-owned entities, and then Tesla Powerwall and Solar Roof products emerge as competitive alternatives. These products afford customers the ability to charge their vehicles, utilize electricity for their homes, and also sell excess electricity generated to the general grid. The subject of energy efficiency is a vast and ever-evolving field.
The next item on the agenda is… The smart car will serve as an active initiator of Internet traffic. That is a market segment that Tesla is keen to retain for itself. However, they have taken this a step further. We offer worldwide coverage. From any location on Earth. Starlink is currently in development. The ability to do so is at your fingertips, with no restrictions in place.
The next item on the agenda is… It is essential to understand that the Starlink satellites cannot be launched without human intervention. Why not retain ownership of this piece? Roscosmos? In the early 2000s, Mr. Musk approached Russia with a request to purchase a rocket. Any type of rocket would be suitable. However, they declined his proposal and sent him away. He ultimately founded SpaceX and pioneered the development of reusable rockets. Until recently, there were even jokes about delivering astronauts via trampolines. However, SpaceX ultimately emerged as the dominant player in this field. A review of SpaceX’s cost of delivering cargo to space is instructive. We will not be discussing the interaction with the Pentagon at this time. There were no actual prototypes produced. The distinction between ideas and technologies on paper and those that are embodied in an organizational structure and a product is a crucial one.
The next item on the agenda is… The construction of spacecraft requires a comprehensive understanding of materials science. As my instructor in materials science and technology of structural materials used to inquire on all examinations: “Please define eutectic.” If you are unsure, please do not hesitate to ask. This is to certify that the answer is F. It is likely that the Cyber track case will not be painted, but will be made of space metal instead. It would appear that the extensive research into material wear and tear, and the creation of demand for highly technological materials within the company, has not been as fruitful as anticipated.
What is the final outcome? The production of a single Tesla electric car has prompted the company to expand into a number of new areas. Furthermore, industry leaders such as Mercedes, BMW, and even Roscosmos have already established themselves as competitors in this field. This was the inaugural segment of the strategic planning master class led by Ilon Musk. Please see Part 2, which will address the topic of humanoid robots and their impact on the labor market.
Intangible and non-obvious
Let me elaborate further on this point, as I believe it is crucial for you to understand that the planning horizon is of paramount importance. Long-term planning enables an organization to navigate through challenging circumstances and reach its objectives.
Historical data demonstrates that truly outstanding results can only be achieved through long-range planning. Let us examine the age of the wealthiest individuals in the world.
This list does not include those who have recently become wealthy and/or well-known bloggers. It is not merely the matter of income and the amounts involved that are of consequence; time is of even greater importance. It is challenging to reach the pinnacle of success, but it is even more difficult to maintain that position.
Bernard Arnault, the richest man according to Forbes in 2023 and head of the French holding company LVMH, which includes more than 70 premium brands – from Christian Dior and Louis Vuitton to Chandon and Dom Perignon – has the following to say: “When we discuss a brand, I always consider what it will be like in five or ten years’ time, rather than focusing on its profits in the next six months.” Consider, for instance, Louis Vuitton, the global leader in luxury goods. My focus is not on the immediate profitability of the venture, but on maintaining its esteem and success over the long term.
However, it would be prudent to avoid attempting to immediately transition to the Premier League. Let us consider an everyday example to gain an understanding of what is meant by a planning horizon. Let us consider our society.
The planning horizon of homeless individuals is constrained to the immediate future, typically within a single day. The primary objective for these individuals is to satisfy their physiological needs and to identify and consume alcohol. Despite their talents and skills, they remain trapped at the social margins due to their tendency to live in the moment. The majority of workers are financially unstable, living one month at a time and relying on each new paycheck to meet their expenses. This is already a significant improvement. It is worth noting that banks, which are often criticised in society for engaging in unfair practices, actually make life more comfortable for workers. Even if the cost exceeds a month’s salary, it can be financed through credit, and housing can be mortgaged. However, all costs must be covered. The middle class is known for its long-term thinking, often considering decisions over years and decades. They are prepared to invest several decades in education, savings, or career development. Those in the upper class are able to consider the long-term implications of their decisions. They frequently possess a background that facilitates success, thanks to a favorable beginning in the form of inheritance, connections, and upbringing. Notable examples include Donald Trump’s father, who was a highly affluent individual, and Xi Jinping’s father, who was Mao Zedong’s closest associate. To avoid an exhaustive list, I will simply state that the upper class thinks globally and aims for long-term results.
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