Learning to build a model, how did Mr. Liu Run become a business consultant from scratch?
All complexity stems from its inherent simplicity: variables, causal chain, reinforcement ring, regulation ring and lag effect.
After understanding the characteristics of these five structural modules, this paper will take the story of "Runmi Consulting" as an example to demonstrate how to use these structural modules to build a business model.
Why cite this case?
I'll tell you a dark secret: if you want to visit a consulting company or a business teacher, it depends on whether they use their own theories and methods to run themselves.
In 20 13 years, I left Microsoft, which had been working for nearly 14 years, and founded Runmi Consulting.
My first client was myself.
In consulting terms, it is to help this "customer" establish an effective business model. To put it bluntly, let a self-made entrepreneur really get things done.
How to build it? I decided to put on my business insight glasses and look at consulting this industry.
First, core stocks
What are the core stocks in the consulting industry?
A friend of McKinsey said: Success stories. Successful cases will bring more successful cases;
A friend of Boston Consulting said: Deep insight. Being able to treat diseases is the key;
Cao Yang counted his fingers: consulting, training, giving speeches, writing articles and books.
These five core variables complement each other; Liu Qin said: Fame. It's all about accumulating word of mouth.
That makes sense.
This is also a problem that people often encounter when they face major choices: many factors will affect your success or failure, which seems to be important, but which one or which ones are the real core?
Therefore, it is not enough for you to know only the elements themselves. You must first find the "critical causal chain" between them.
Second, the key causal chain.
For me when starting a business, the most critical causal chain is the causal chain that leads to income.
What is the key "cause" that leads to the inevitable "fruit" of income?
After a circle of interviews, I purified a key "reason" from many factors, that is: word of mouth.
You might say, what's so strange about this? The reputation of all companies is very important.
Yes, but for other types of companies, reputation is not necessarily the first reason.
When it comes to starting a consulting company, many people always say: this business is good, there is no cost, isn't it a person? It seems reasonable. Consulting companies do not need to buy factories and equipment first, nor do they have the pressure of inventory turnover, or even high start-up funds.
However, these people ignore a common sense that consulting companies need to bear a huge cost: transaction costs.
Successful consulting companies have their own success, and there is only one kind of failed consulting company: customers don't believe in your ability.
Because you don't believe it, the transaction cost is high: tell me, what can you do? Where are you better than X? What is better than y? Can you make it cheaper? Can you bid? We can only pay 30% first, and then I'll pay the balance when I see the effect.
These high transaction costs will lead to a consulting company's extremely slow transaction speed and insufficient strategic determination for customers, so the effect is not good, and the consulting company itself will not receive money.
Therefore, reputation is the power to make customers believe.
Only by reducing the transaction cost with excellent reputation can Runmi Consulting build strategic potential and I can finish the business.
Find "Reputation-(+) >; After the key income causal chain, I set myself an iron law:
Never go to the customer site to do pre-sales.
No matter how big an entrepreneur you are, as long as you don't want to come to my small office to chat, it means that my "reputation" is not strong enough to make you move.
As long as it's not a customer won by the first reason of "credibility", no matter how rich it is, it's not my real customer. It's my fault that I'm not strong enough
My inner monologue is: please forgive me for not being able to serve you, because I will use this time to continue to improve myself desperately.
This is the key causal chain, which gives you strategic strength. Found the key elements "reputation" and "reputation-(+) >; Income ",how to start this system?
Third, strengthen the cycle: the flywheel to promote growth.
The core duty of CEO is to "assess the situation and not complain about others". My duty is to constantly improve the "potential" and "reputation". Establish an "enhanced cycle".
First of all, what is to promote the promotion of the core stock of "credibility"?
Works. I must have good works, works recognized by entrepreneurs from the heart, such as thought-provoking articles and thorough and magnificent books, in order to enhance my reputation.
So, what promoted the emergence of "works"?
Knowledge. Talking on paper will only be laughed at. I must participate in the real business, solve specific problems, and stay at the forefront of the business in order to have real talent and insight.
So, what is driving the accumulation of "knowledge"?
Fame. Only when you have an excellent reputation will there be many companies that let you accompany you and give you a lot of real feelings.
"Reputation-(+) > Knowledge-(+) > works-(+)& gt； Reputation ",an enhanced cycle, surfaced.
After determining my own "promotion circle", I decided to do nothing as long as it is not a flywheel to promote "reputation, knowledge and works".
Once, an old leader called me to introduce a client. I was particularly touched, but declined. Why? Because this customer's problem is a very common management problem. Most consulting companies can do well, and solving it will not help to improve my reputation. This matter is not in my "enhanced cycle".
Not making money is a difficult decision. Huawei said: "Don't consume strategic resources in non-strategic opportunities."
This is easy to say, but what are the strategic opportunities among many opportunities? Which of your resources are strategic resources? This is not something that can be judged by will and feelings. Only when you put on insightful glasses and determine your own "reinforcement loop" will you know the real answer.
All the successes you think are "sudden" have their interlocking "enhancement rings" behind them.
Fourth, adjust the cycle: break the growth ceiling.
When pushing the booster circuit to speed up the rotation, you must also ask yourself: What is the lowest ceiling for restraining growth in the future?
I know, this is my limited time. No matter how expensive the unit price is, my time will be sold out after all.
I feel at ease when I see the low ceiling. Because I knew something would happen. So, I put the team, products and funds aside.
Then, lower your head and continue to push my flywheel.
Fifth, lag: saturated entrepreneurship.
Yesterday's efforts usually don't pay off today.
Why? Because of the lag effect: the reason is often not near the result.
After careful study, I found that from word of mouth, to knowledge, to works, to word of mouth, every causal chain in the whole enhancement cycle is seriously lagging behind.
then what I choose saturated entrepreneurship.
What is saturated entrepreneurship? It's not a day-and-night job, haggling over cost performance and rate of return. Instead, put strategic resources ahead and let the results appear in advance and clearly.
For me, it is to design three factors for each kind of fruit. Then, wait for time.
I decided to use WeChat official account, Weibo, and later Tik Tok to promote the word-of-mouth flywheel;
To promote the flywheel of knowledge for three reasons: business consultation, entrepreneur community and entrepreneur private board meeting;
For three reasons: offline classes, 5-minute online business school courses and book publishing, * * * promotes the flywheel of works.
So far, the business model I have built for myself has been basically completed.
Then, I started to push the flywheel.
20 13, 1 1, I wrote a book called "traditional enterprises, the internet is kicking the door" and gently promoted the "reputation flywheel";
Therefore, the strategy department of Haier Group came to me to sign a consulting contract to promote the "knowledge flywheel";
Then I wrote the consulting insight into the book internet plus: Strategic Edition, which promoted the "flywheel of works";
Then Mr. Wu Xiaobo came to me to give a speech in the transformation class and once again promoted the "reputation flywheel";
Then, the learning workshop came to me as a member of the private board of directors to promote the "learning flywheel" again;
Then Mr. Luo Zhenyu came to me to do "5 Minutes Business School" and promote "Flywheel of Works" again. ...
So back and forth, push faster and faster.
You see, in this growth cycle, there is neither a flywheel called sales nor a flywheel called income or profit. Because those are the results, not the reasons.
Five years later, Runmi Consulting served as a consultant for Haier, Henderson, COSCO, Baidu and other enterprises, managed 340,000 students in the business school for five minutes, led the private board meeting of entrepreneurs for three consecutive years, led entrepreneurs to study in seven destinations around the world, and published books 18.
It all started with the business model established five years ago.
Summary of main points—
In this lecture, I use the case of Runmi Consulting to demonstrate how to build a complete business model with five system structure modules (variables, causal chain, enhancement ring, adjustment ring and lag effect).
It seems complicated to start a business for five years. In fact, I only did five things:
Find the core stock: credibility;
Find the key causal chain: reputation-(+) > income;
Find the promotion circuit (reputation, knowledge, works) and the flywheel to promote growth;
Find the adjustment loop (time limit) and break the growth ceiling;
Admit the lag effect and start saturated operation.
All complexity stems from its inherent simplicity. Have you learned how to use simplicity and build complexity?