Terminology to Know

Terminology to Know

Terminology to KnowWe’re living in an age of information overload, with large amounts of new information continually being created and bombarding us.  Alan Toffler said in 1970 that “information overload will lead to ‘future shock syndrome’ as an individual will suffer severe physical and mental disturbances.” Maybe it’s not as bad as all that, but for business owners, it’s essential to stay up on information that could impact our companies and our decision-making.  Information includes new terminology and what it means. Here are some terms that have come to prominence recently and what they can indicate to you.

Disruption

The dictionary says that “disruption” is a disturbance or problems that interrupt an event, activity, or process. We’ve come to understand the term as it relates to business by thinking about disruptive innovation (explained in detail in “What Is Disruptive Innovation?” in Harvard Business Review (HBR)). The article notes key points about disruptive innovation:

  • It’s a process
  • The business model of a company that’s a disrupter is different

The article also notes that not all disrupters succeed; we only hear about the successes like Amazon.

What does the term mean for small businesses? I think it means recognizing that we have to continually change as customer needs demand. A small business may not necessarily become the next Amazon, but it can create a disturbance in order to retain customers and keep a competitive edge.

Sustainability

The dictionary defines “sustainability” as the quality of not being harmful to the environment or depleting natural resources (e.g., solar or wind energy). For small businesses, it means taking into account the environmental and social impact of decisions. This means going beyond what the law requires and spending the money to achieve sustainability.

The term has also been used in conjunction with the workplace: sustainable workplace practices. This means creating a safe and healthy environment in which employees can work.

HBR also had an article last year “The Comprehensive Business Case for Sustainability”. It claims that “sustainability efforts clearly result in a positive impact on business performance.” Focusing on sustainability creates a competitive edge by creating value for all stakeholders: employees, owners, supply chains, society, and the planet. Large corporations can, for example, do this by creating new products that minimize waste. Small businesses can also do this by paying attention to the concept of sustainability and adapting business practices accordingly, such as engaging employees in a company practice of recycling.

Blockchain

The dictionary defines blockchain as a publicly-shared decentralized database or digital ledger that records transactions across many computers so that it can’t be altered. There’s a good article from Business Insider explaining blockchain.

What does this mean for small businesses? At present, probably nothing. The technology likely is or will be employed by large institutions (banks, brokerage firms) with which small companies do business. However, because the technology makes transactions fast and secure, blockchain is expected to reduce costs, which could result in savings for small business customers. The article mentioned that it could, for example, be used for real estate transactions, where “smart contracts” would transfer title and release escrow when ownership is confirmed (Forbes reported that it’s already being used in the country of Georgia).

Note: Bitcoin and other crypocurrency are often talked about in the same breath as blockchain. The terms clearly are not interchangeable, but these digital currencies may be used for blockchain transactions.

Conclusion

New terminology is always being created. In an earlier blog I wrote about predictive scheduling, which is a concept that was new to me. I expect there to be an ever-growing lexicon for business owners to master. Stay tuned! 

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