Reinvent your business: should you change direction?
As music icon Madonna once observed: “You have to reinvent to stay fresh; to stay in the game.”
All businesses – and pop stars – need to evolve to remain relevant, and therefore successful.
If you don’t respond to changes in technology or consumer demand, you will fail. And if you don’t respond fast enough, you will also fail.
It is often the pace of change, rather than the change itself, which catches many businesses unaware – which is why it is vital to keep an eye on your industry for signs of movements.
Those subject to the greatest disruption are those that need to respond fastest.
The classic examples of international business that failed to respond to a fundamental shift in the marketplace are Kodak and Blockbuster.
Kodak, of course, was slow to respond to the explosive growth of digital photography, while Blockbuster underestimated the impact of video on-demand services such as Netflix.
What successful business owners realise is that a downturn can become permanent if it’s not addressed fast. It is not a matter of “riding out the storm”.
Even if your tough times have been triggered by wider economic conditions, it still signals a change in the market that may require you to shift your offerings.
In hard times, ask yourself:
- Are people still willing to pay for your product/service?
- Is it still relevant?
In the book Stall Points, business writers Derek van Bever and Matthew Olson state that less than 10 per cent of businesses that run up against major stall points will fully recover.
Global fast food chain McDonald’s was quick to spot a stall when the company posted its first-ever quarterly loss in 2002.
Sensing a threat, the company quickly shifted focus from opening new stores, to revising its menu.
Extensive research into changing customer demands led to healthier options, more upmarket burger offerings, an expansion into coffee and the introduction of a delivery service.
This emphasis on responding to customers’ changing desires represents a fundamental shift in the business imperative, says Perth business adviser Diana Simich, director of Training for Growth.
“Before, it was the corporates that dictated what we bought,” says Simich.
A smaller marketplace meant people often accepted what they were offered. Now consumers can source virtually anything.
“So it’s flipped and it’s the consumers that dictate,” says Simich.
“If we’re not listening to what the customers really want and we’re not doing a bit of research, what we’re doing is possibly being a bit ignorant. It’s hard. If something’s been working for 15 years, we don’t want to change.”
This resistance to change often stems from the fact that businesses hit hardest by disruption are usually riding a wave of success before the rug is pulled out from under them.
Nokia, for example, sold more mobile phones than any company for an incredible 14 years from 1998 until 2012.
It was hit for six by the smart phone boom. If you keep an eye on changing demands, you can position yourself to take advantage, rather than being caught off-guard by a rival who spotted the opportunity before you.