Story:
Heartbeat City: A Hybrid Innovation
Hybrid E-Novation: MLA Enterprises
Heartbeat City
Marie L. Hauser-Adee
Abstract................................................................................................................... 3
Introduction............................................................................................................ 3
Overview.................................................................................................................. 3
Style...................................................................................................................... 4
Incentive Compatible Franchise System................................................................. 4
Components of Franchise...................................................................................... 4
Internet Auctioneer’s Cafe............................................................................................................. 4
Virtual Offices................................................................................................................................ 6
Bed and Breakfast & Adventure Travel......................................................................................... 6
Lower-Level Supporting Services................................................................................................. 7
Futuristic Stakeholders.......................................................................................... 7
Community Building Games.................................................................................. 7
Compensation................................................................................................................................. 7
New Processes......................................................................................................... 7
Venture Capital..................................................................................................... 8
Staffing.................................................................................................................. 8
Contracts............................................................................................................... 8
Innovative Services................................................................................................. 8
Flexible, but transparent Pricing............................................................................ 9
Payments............................................................................................................... 9
Integrated Trans-Enterprises Systems.................................................................. 9
Turning the organization Inside-out................................................................... 10
Conclusion............................................................................................................ 10
Abstract
Internet companies are sprouting up all over the WWW, driven by opportunity. Traditional companies are moving to the WWW, driven by fear of obsolescence. I propose an innovative, from the ground up hybrid organization, using all the advantages of both worlds and combining them into an innovative electronic commerce franchise system. The innovation stems from the fact that existing customers will be presented with new interdisciplinary processes and services. All brought under one hat by transorganizational systems. Therein lies the next generation of electronic commerce software systems.
Introduction
The MLA Enterprises case study describes an Internet Startup which will try to bridge many of the gaps between traditional enterprises and those who have established themselves as purely Internet ventures (i.e. www.amazon.com). This new so-called hybrid E-novation, will be a true cyberintermediary, which means that it will provide a front to the stakeholders as a coherent unit, however behind it there will be many already established partners. The work of this new enterprise is therefore comparable to Amazon as a guarantor and relationship manager towards the end customers. The future of electronic commerce will be designated by interorganizational systems, i.e., by integrating interdisciplinary products and services. In summary, MLA Enterprises will be completely stakeholder oriented, as it has not been possible until recent history.
Another aspect of that which this innovative franchise attempts to realize is to bridge the gap between electronic commerce research and the development of such enterprises, as there is a large necessity to do so.
Overview
The new type of franchise intends to serve Information Technology services like standardized and yet customizable products and services. It is composed of three main modules, an Internet Auctioneers Cafe (IAC), a virtual offices venue and an exclusive B&B with interfaces to adventure travel offers. Each will be defined independently and their synergies will be presented. The entire franchise idea encompasses two main dimensions, the virtual and the physical world.
The franchise form has been chosen due to the increasing trend for owning your own business. The franchisees will pay their fees to a holding company, MLA Enterprises.
The standard franchise will follow the (American-style) building, like a McDonald's or Burger King, but will not be selling fast food, rather rapid standard or unique IT products and services in a comfortable atmosphere, centered around the end-consumer. As the franchise is intended to take advantage of new customizable possibilities, a franchisee will be able to mix and match the different modules depending on the specific needs of their customers and their expertise. Since in today's world, everything starts in digital terms, first there will be a patented digital world, representing and supporting all the physical processes. In this multimedia supported 3D model, interested parties can already design, online, their desired franchise.
Style
The overriding architectural guidelines are also quite innovative in that they should be a „camping“ version of the Ritz Carlton or luxury-camping. This means that mostly wood and leather furniture, but fully high-tech, using many principles of ubiquitous computing. So stakeholders will feel very relaxed and down to nature, though completely wired. A further principle which needs to be adhered to is that of ecological and environment friendly energy use and all-natural resources consumption. The company should have the flavor of one of these new Internet Philanthropist, whose profits will be reinvested into more franchises supporting the goals of their communities.
Many principles will come from advancements in automated, wired homes. Tables and chairs will be adjustable. Wall partitions and their colors (because they have built in screens) will also be changeable depending on the venues. Elevators will have multiple music styles to choose from. Another idea is that of the European "Hauswirt" principle, the top floor being the home of the owner of the franchise. Since it is up to the regions to decide what they do, there are many options open. As the global franchises are modular and flexible, they could also be bought privately as homes and/or as offices for independent companies, of course, since they will also be suited for that.
Incentive Compatible Franchise System
The enterprise described in this case study will be managed out of Switzerland, with franchisees in all mayor, developed economic countries in the first stage. Franchisees world-wide would be able to purchase the licenses to a unit for a semi-variable price. Franchisees that want to have more independence would pay more up front (fixed) and have a lower commission (flexible) which they want to pay to the franchise, while others may choose to adopt an exact replica in the management structure and therefore, will pay a larger amount of variable costs over time.
The franchise will always retain 100% management rights to the franchises, though the decentralized ownership and management will be encouraged. The franchises themselves will also be subject to competition, as is common in other franchise systems today. When management deems that there is a management problem, the right is reserved to not renew a 3-month contract for the manager in question and inject a new a high-performing manager, thus retaining the global reputation for the franchise and the income for the owner of the franchise.
The new electronic commerce engines, front-end and back-end systems, to support these requirements will all necessarily have to be web-based, modular and flexible.
Components of Franchise
Internet Auctioneer’s Cafe
This cafe will be open 24 hours a day, wherever possible given local restrictions. It will first serve breakfast for guests of the B&B and to external customers. From 9:00am to 16:00, with a break for lunch, there will be internet education courses for the end users, showing them everything from basic internet skills to web negotiations (auctions and the use of negotiation agents). The courses will be held in the main room, which is circular and surrounds a stage for the mediator. All tables will be equipped with keyboards and adjustable screens. The learning will be offered at everyone’s own pace, so the instructors/mediators will be able to support everyone in their learning at whatever stage they should find themselves in the Webucation. People will be able to subscribe to the courses and go at their own leisure, given availability, guaranteed only by reservation, as is common is most courses. Subscribers or members, will also, of course, also be able to access the course materials from home once they have officially subscribed. All club members will have access based on their flexibly customizable subscriptions and it will be completely secure using the highest security protocols available on the Internet at any one time. In this sense, this franchise will be a mixture of an Internet Service Provider, an Education Venue and a Restaurant. It should target the higher end as far as making sure that the customers get more interested and versed in the height of electronic commerce, i.e., in various forms of new, technology-enabled automated negotiations. But it would also be available to people wanting to just learn how to run their businesses or personal lives in an expert-mediated environment. This will also be an interface between academia and practice, since all education materials will reflect state-of-the-art research in electronic commerce.
During the evening, the Internet Auctioneer’s Cafe will turn into a normal venue for dinner and entertainment. The restaurant will be always a theme restaurant, this is decided at the franchisee level. One restaurant in Tokyo may have an American Theme, while one in Russia could have a Disney Land Theme. Theme restaurants are in, because people want to not only eat great food, but also be entertained while they are at it. Due to improvements in technology, it is also totally imaginable that the menu can be changed daily or can even be defined by the club members in advance by a voting interface. At least the specials. The entertainment can and should also be fairly flexible. It will become a known venue for artist to present themselves or their services. One night "a cappella" singers can present themselves, while another night a new band can play intermittently. Again, everything will be digitally video taped, even the guests, so these event video cassettes can be bought by the public. For special events, a videographer can be hired to especially video tape an event (B-days, Anniversaries).
While the presentations are not running, there will be large screens around the main room displaying highlight of video clips from MLA Enterprises stakeholders around the world, doubling as advertisement and entertainment. The ordering will happen online, as the guests get to their tables, they can choose their food themselves by pointing -and-clicking, dragging and dropping or cutting and pasting. They will also be able to submit their order and find out where it is in the process. They can also check the estimated serving times in order to decide of they have time or not. When they wonder where their food is, they can also look and see if their server has picked it up or if it is still in the oven. Relieving the servers. Customers can also order anything they want provided they have time and the ingredients are in the house...eat whatever your heart desires. Specialties depending on the cooks on the shift, can also be accommodated. Maybe there is a special Japanese cook that day, so sushi would be especially good, however not when the Mexican cook is in.
In this case, the service staff takes on a different role. They are the new mediators or trained negotiators. They act as entertainers, consultants, and yes they are responsible for bringing the ordered food. Like in many theme restaurants in the USA, they should be trained actors or students, who have successfully demonstrated competency in the offered electronic commerce training. The staff has, therefore, innovative, motivational responsibilities. They wear theme uniforms and have a tour-guide role, to make the guest feel at home and be able to get along with the technology. Though the target clients are young, internet savvy entrepreneur types, this venue is also perfect for anyone wanting to get competent help while exploring new electronic commerce or simply internet tips and tricks.
For students or late night workers, the venue will provide reduced service, but will welcome these groups in the spirit of 24 hours, global electronic trading. Because all tables will have the internet auctioneers infrastructure, it is imaginable that two friends go shopping here, but online. They can get together and decide on which web-based company will get them the best flight tickets, while enjoying dinner together. Many of these activities are not possible today, but will be commonplace in the future. The moderators will have to have basic training in the knowledge systems and will be able to advice all club members.
A further idea of the Internet Auctioneer’s Cafe is to be a portal to the virtual MLA Enterprises Electronic Commerce city, so-called Heartbeat City. Here there will be a CD-ROM like 3D virtual shopping world, where members can list their offerings in a subtle, visual way. The city will be composed of objects which are for sale on the site. If a lamp provider wants to sell their items over the Electronic Commerce Engine, the lamps would be displayed accordingly. For example it can be the real lamp in the hallways or in the bathrooms. An electronic shopper can then click on it and put it on their account at MLA Enterprises. In this case, MLA Enterprises acts like a clearing house between suppliers or providers of physical goods. Alternatively, these providers can purchase a standalone version of the Electronic Commerce (Auction) engine and have a link to their private site, for a small fee. They can also then choose to be included into our virtual world, thus having the best of both worlds.
Virtual Offices
The second floor will be a fully-professional virtual offices venue not only for meetings with customers who have electronic commerce ideas from the Internet auctioning experience in the IAC, but it will also target young entrepreneurs which do not own offices, but want to have a professional infrastructure available in each city where they travel. The virtual offices will double as the home of the MLA Enterprises electronic commerce consultants and project managers. The virtual offices will be run by a team of professional assistants which will not only be responsible for making appointments with the professional consultants and project managers, but will also answer any questions which club members may have from remote areas, analog to a 24 hour help-desk. Since the franchise intends to be global, this virtual help-desk will not have to be staffed 24 hours, but the computer integrated telephony will be routed to available staff around the world, like the idea of load balancing between servers. Since the entire products and services offered will be standardized, this is equalized with a trading book which gets turned over around the world. All internal processes will also be managed from here, as these will be the official headquarters of the cybermediary too. Potential customers can alternatively, also choose not to have an office at all and outsource their „Intranets“ to MLA Enterprises. A business person can thereby have their own customized office environment (Portal) around the world, without necessarily having partners or connections in the global cities. Day traders are another perfect example of the target customers here.
Community members can also decide to hold professional, fully multimedia presentations using the latest web-based, presentation technology. Customers of both the virtual offices and the multimedia presentations will also have the option of having all meetings digitally videotaped, which leads to the interesting possibility of further seriously altering common contract law, based on written documents (Stanoevska-Slabeva). Parties can agree to have this „3rd-party“ video-taped meeting be accepted as a contract. Not oral, not written, but visual. That is why the role of MLA Enterprises has to be that of a trusted cybermediary.
Since the franchises will be modular in nature, it could be that in certain markets the specialization of the virtual offices varies.
Bed and Breakfast & Adventure Travel
The top floor, includes also a theme B&B quarters with 2 to 3 rooms in the exclusive 4 star category (fitness rooms and relaxation area in the basement). One of these rooms will have a military-style bunk bed room, which can accommodate larger groups, provided that they are willing to share the bathrooms. This top floor is intended to be a place also for guests to plan their next adventure travel tour, which will also be facilitated via MLA Enterprises. Although, relaxation should be the main point, full internet access will be available in all rooms.
It is intended that global management groups who decide to have their increasingly rare physical meetings at the virtual offices or their education at the Internet Auctioneer's Cafe, would also like to round out their day with a team-building exercise, using adventure travel options.
Lower-Level Supporting Services
One level below, will be supporting services. The basic requirements for the basement will be: a relaxation zone (a sauna, a whirlpool and a massage room), a huge room for child day care during the day and a martial arts training zone in the evenings.
Futuristic Stakeholders
The word stakeholders is used on purpose, since the borders of customers, staff and suppliers will blend even closer together. The intended cybermediary expects to become a serious partner leading new electronic commerce business models and providing a testing and supporting environment for such new types of community models.
The target group of customers is the knowledge worker who has grown up around the internet, but this organization will also serve the general public in their webucation and infotainment needs using as many fun, multimedia techniques as possible.
Community Building Games
Like evidenced by the success of network games like, Dungeons and Dragons, Arcades or Adventure and Strategic, interactive strategy games will be offered to guests of the IAC as eye-catchers, in order to raise the interests and polish the gaming skills of the target customers.
Building on the ideas of traditional games, many websites are now offering participative games. These can be a series of simulations, or even decision-making systems. Since games are the perfect examples of cooperation within competition, an innovative electronic commerce franchise system should strive to reap the advantages offered by such mechanisms. Fund or stock market games are fairly common on the Internet today, but there is still a large market for more useable outcomes from gaming. For instance, intellectual tests, disguised as games, can be implemented in the hiring process. The candidate with the highest score, would be preferred to others when the selection process for new staff begins. Contests for "the best new idea of the month" can also be rewarded with loyalty points to the person who is voted as having the best business idea. There are furthermore areas to explore in the interactive television and Internet TV areas.
Compensation
Based on a 360 degree system. This includes not only ratings from peers, customers and managers, but also from performance numbers or game outcomes, as described above. Employees will be able to score points compatible with the organizations goals and compete with each other. So, everyone can become a superstar, they just have to work harder than the rest. The compensation will also be transparent. So associates will be able to decide for themselves how much they want to work and how much they want to earn. If a rating is excellent, the bonus would equal to a fixed percentage (say 100%) of their existing contract. If the rating is average, neither staff nor managers would expect additional payment.
New Processes
In the first version of this case study, I will mention only an innovative venture capital process, staffing rules and general contract duration. These are not the only possibilities, but should give the reader a taste for what the author intends.
Venture Capital
Yahoo and Monterbook.com, two innovative purely internet companies have both launched innovative marketing to interest their potential stockholders. They sent out emails promising stock, options to buy stock and/or cash for referrals. This practically guaranteed that the first 1,000,000 customers heard about them via word of (e)mouth. They also became, automatically, the first group of stakeholders. MLA Enterprises wants to take this a step further and periodically offer, on a web auction basis, ownership shares of the holding company. Since it will not yet be a "publicly" traded company, this can be considered an innovative way of tapping into the venture capital markets.
As mentioned already, MLA Enterprises will also offer, via a correspondent financial institution, customer statements, listing their loyalty points, their account status and their ownership shares.
Staffing
In line with futuristic working and management patterns, all staff will have renewable contracts which last no longer than 3 months. This reflects the speed of new business models. On the Internet, it is known that one week is equal to a year of physical business activity. The contracts will be renegotiable from both sides, guaranteeing fairness and most importantly flexibility. One important reason for this is that MLA Enterprises wants to be able to move staff around the world in 3 month tact. The target staff is young, curious about the world and wanting to participate in the adventure travel aspects of the firm's philosophy. This mechanism will also ensure that only the people with personal alignment to the goals of the new Electronic Commerce system, will be hired. Hopefully leading to a high degree of loyalty and therefore retention of knowledge within the enterprise. Furthermore, staff will be encouraged to take part in all the education offerings at a reduced rate. Managers will be selected by their peers in the above mentioned appraisals. Once a manager proves to be ready for managing the entire franchise, MLA Enterprises will open a new franchise system for them and will support them on their path to independent success. This also is intended to make sure that we do not lose great managers to the competition, but make this new electronic commerce organization more successful.
Contracts
All contracts will also follow the 3-month rule. Everything in the franchise can be bought from the suppliers over the Internet, using the Electronic Commerce engines. So, the physical buildings and equipment will be a showcase for the virtual city shopping center.
Innovative Services
The nature of the innovation lies in the mixture of the offerings. Many contemporary competitors offer bits and pieces of what this case study intends to offer, but the multidisciplinary nature of the franchise has not been realized to date.
Flexible, but transparent Pricing
One further feature of all the MLA Enterprises products and services, is that all prices will move within a range and should reflect market conditions. For example, if there is a particularly high demand, the prices will rise to their ceilings. If the demand is low, the beer prices could fall to attract more customers. If Brazil's coffee crop freezes, you can count on the coffee becoming more expensive. This sounds like a game, but it is an innovative marketing trick to get stakeholders to think in flexible pricing terms and to place a challenge on the transaction software. Since it also shatters commonplace rules, it sets another challenge for the accounting and regulatory systems. In a few years, this will be commonplace everywhere.
The same principle holds true for the actual franchise units. Once a certain level of business activity has been reached, it is foreseen that a new franchisee would be allowed to enter the market in the same location, securing access to the general public.
Payments
This global franchise, will accept all kinds of traditional payment systems, plus it will have its own MLA Enterprises customer card with a Swiss digital cash chip. These cards can be bought and paid for with other contemporary payment methods. All established digital cash systems will also be accepted. We will offer also managed accounts and credit against fees for auctioned off objects, for those lacking the necessary infrastructure. It should also be self-evident that all payments are also possible over any computer terminal in the world, given that it has a secure WWW interface.
The Swiss digital cash system would be used as a model for payments in special areas, especially in the adventure travel sites. Customers can buy the pre-paid digital cash cards and pay for services on the field using the mobile terminal. This also eliminates currency exchange problems and clearing in the country of origin, since the mobile terminal just needs to be attached to a telephone line for the transfers to be effected. For customers it is a nice alternative, since when they travel, they only need to bring their electronic wallet, which if lost (should they fall off a white water raft), only entails the loss of money, not of all their personal, difficult-to-replace credit cards or bank cards. For the adventure travel tour guide, the benefit lies in the fact that they do not have to carry alternative paper payment mechanisms, like conventional credit card slips and imprint machines. Also, they do not have to deal in local currencies.
Integrated Trans-Enterprises Systems
There is no doubt that the challenges posed by this franchise system from an information technology point of view are immense. However, with the development of Electronic Commerce, the technology is the simple part. Now, it is about integrating all the disparate pieces into a deliverable whole which reflects the needs of the communities going forward. In this sense, more customized cybermediaries will be cropping up. The patented systems to run such a virtual community will be modular, since as mentioned already, certain regions will only need the IAC on three floors, while others will want just the virtual offices. And yet again, in certain adventure travel areas, franchisees can decide to have just one whole building of B&B Adventure Travel systems. Fortunately, everything will be concipated to work online, and so franchisees can actually put their own franchises together, click on their desired features, meet with a responsible e-agent at the virtual offices to negotiate details and visualize, online, the newly created business intention.
Turning the organization Inside-out
Recent advancements in Information Technology allow for new types of organizations to be designed from scratch. Today most organizations spend tons of resources on trying to figure out what their customers will buy by taking a sample or hiring external marketing companies to do this for them. The results, for multiple reasons, are often not representative, since the analytical tools use statistics, not real, live data. In attempting to build a virtual community of physical people, MLA Enterprises wants to harvest the synergies available when a forum of customers can participate in all major strategic decisions by voting on selected alternatives. The inherent self-selection of the respondents, stakeholders of MLA Enterprises, would increase the probability of successful, customer-oriented strategies and tactics. This type of disintermediated feed-forward (as opposed to feedback) is another unique feature of correctly implemented electronic commerce.
To illustrate, stakeholders will help management decide which offer to take from the entertainment choice, events, etc. Thus feeling like a part of a community.
Conclusion
It's a restaurant, no it's a virtual office venue, no it's a hotel, no it's a modern consultancy firm, no it's an adventure travel agency, no it's a new form of hybrid (cyber and physical) electronic commerce franchise system.
This innovative franchise concept strives to be a true electronic commerce research and development platform. It's goal, as with any innovation, is not just for the sake of innovation, but rather to offer superior, community-oriented products and services to the market (Rehfeld 99) and specifically in this case, to bring it to the world's physical and virtual markets faster than it has ever been possible before.
p.s. I wrote this 12 years ago, I did not think about how it would change management and then wrote it. I learned everything, reengineered it and came up with a business plan. I can go over this again and answer your main question, how to change management. By turning the organization inside out, e.i. having telecommuters with an alternative place to work which really has not only all the infrastructure but also the know how, is the change. I am mixing work and home, but in a business way. It was never possible before for women to work without leaving their families behind. This will tap into a super powerful market. I was a waittress myself, before I became director of UBS. I know the type of transformation I want the world to make ;)
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