While there is great debate as to how to make a successful company, a key part is being relevant to your customers. Robert Coorey has an excellent book titled “Feed a starving crowd” (feedastarvingcrowd.com) which, as the name implies, argues that your business will succeed if you are surrounded by people starving for your product.
So you have a business that is booming. It is supplying your customers what you want. All is good.
One of the worst things that can go wrong is that you lose business relevance.
I recently heard Michal McQueen (michaelmcqueen.net) speak on the topic and his insights were brilliant.
There are many great examples of companies that have lost relevance and have consequently failed because of it.
Kodak is a classic example. Not only did they fail to embrace the change from film to digital, but they actually invented one of the first digital cameras and then tried to suppress it. But once people moved to digital, they didn’t need film anymore and Kodak slid into irrelevance.
Printed encyclopedias saw it with the internet, and then wikipedia made commercial encyclopedias obsolete.
How do you lose business relevance?
There are 4 changes that happen outside the control of a business that will drag relevance away from them.
Technology would have to be the biggest change that is happening. I heard a great quote when it came to computers which is “technology changes a lot slower in 2 years than you expect, but far more in ten than you imagine”.
Ten years ago smart phones didn’t really exist. Now they shape how consumers do business. Twenty years ago the internet was just starting to be introduced to normal people. Thirty years ago computers were just starting to be introduced into homes.
What will be the game changer in the next ten years?
Our population is changing. We have an aging population combined with a younger generation that is going things differently and think differently.
So while we talk about technology changes, at the same time it changes the way people think, act and interact.
We have moved away from the “lucky generation” who were rebuilding after World War 2, and now the baby boomers are retiring, and Gen-X and Gen-Y are now shaping the work force. These are the “what’s in it for me” generations who have grown up with a changing world.
Market place changes
What’s the difference between a fad and a long term change?
The Swiss saw digital watches as a fad and they paid the price. They refused to change with the times until it was too late. Digital watches became the norm, and precision Swiss watches became redundant.
Mind you, how many people have now stopped wearing watches because their smart phone tells them the time.
Or how many people will start wearing smart watches that will interface to their phone?
We also have the change away from small stores to large super stores – be it supermarkets, hardware stores, or recently even pet stores.
If you are a retail outlet, the pressure is now on to either go big or boutique because if you don’t the only option left is broke.
It is amazing how a single law can have a huge impact on an industry. Both regulation and deregulation impact on how businesses thrive, especially small businesses.
This has been seen with financial advisers, mortgage brokers, news agents, and pharmacies.
How to gain business relevance?
Just as these 4 changes can destroy relevance, they can also be used to gain relevance and to move into new markets.
So here are 4 ways to help stay releavant
Identify who you really are
While for many this seems obvious, the wrong answer can be disasterous. Kodak thought they “sold photograhic film” which on face value was true. The deeper truth, however, is that Kodak helped people preserve memories. If Kodak had seen that as their business then they may have invented Instagram or even Facebook.
So as the changes are happening outside the company, make sure they are happening inside the company.
This involves the adoption of new technology and attitudes. It involves the hard decisions to stop old practices, and the insight to introduce better ways.
But change for the sake of change can be just as damaging as not changing at all. So what is a good approach to change. Why not try these 4 steps:
1. Identify: List everything that is involved in a process or job. Work out what you are doing now.
2. Question – With everything that you do, question it. Does it make sense? Is it outdated? Is it adding value? Do we need to be doing it still?
3. Change – If it needs to doing, is there a better way of doing it? Is there new technology that helps?
4. Merge – Put it all back together again and evaluate the difference. Is it working?
And then repeat – again and again.
And then you have a chance of keeping business relevance.