Is your business prehistoric or an enduring spirit?
Is your business built to last?
Focusing on the Xeroxs, Kodaks and Blackberrys, that neither adapted nor evolved in order to survive, would be too easy. So, to understand what we mean by built to last, let’s break this down with examples of prehistoric dinosaurs, evolving entities and enduring spirits that have seen the future.
For a second, think about this in terms of jobs. Many will look at me side-eyed if I mention copy typists, elevator attendants or switchboard operators. In more recent times, the phasing out of computer operators, industrial machinists and travel agents is likely to elicit more concern. But, wouldn’t you be much more concerned to think, that only the minimally essential accountants, lawyers and journalists will be required in the next decade or two?!
The evolution of industry will affect the viable jobs of the future and how we prepare for them. As Axios states, with its insight from its partnership with Summit Shasta Charter school, pre-career education too needs to evolve. https://www.axios.com/rebooting-high-schools-future-jobs-5366f9f5-1aed-4878-81d6-77992281f205.html
So, think similarly of business sectors. What used to be big business, such as shopping malls, non-mobile computers or automobile manufacturing, are in decline. We must start to categorise businesses in terms of the need they meet, rather than what the company does. Look outwards, rather than inwards. Let’s look at 3 categories: Retail sales, Manufacturing and Music production. These are inward looking categorizations, that are akin to the infamous words of Henry Ford, ‘Any customer can have a car painted any color that he wants, so long as it is black.’
Prehistoric, Evolving and Spirit entities
Some companies are facing extinction, others must adapt or die, while others can evolve but only with some tough choices. The best, will be able to evolve and endure long into the future.
Prehistoric
The prehistoric were definitely not built to last, and many are already extinct or endangered. If you are a mall, shopping centre or retail sales store, learn from the record industry. The latter thought that substituting vinyls with cassette tapes, tapes with CDs and then adding magazines and DVDs to their inventory, was business transformation. This led to their demise. The bricks and mortar retail sales sector has done worse, and the future looks bleak for them. Though to a large extent anchored to a set physical location, they have however been tunnel-visioned in their business transformation. Their approach has simply been inventory and store-type substitution, which is perfunctorily delaying their inevitable demise.
The Sears and K-Marts of the world have shown no inclination to radically transform themselves. They need to meet changing consumer needs and desires, rather than simply stocking the latest inventory types available from their suppliers. We won’t dwell on these companies, as it is evidently too late to make a worthwhile contribution to their mindset.
Apes, Man and Evolution
Like human evolution, these sectors and companies have two possible paths. They can keep surviving as an inferior species, or they can evolve by making some tough choices. You have companies like Sony and Walmart, that have made many of the right moves in the past. However, can they evolve into built-to-last, sustainable companies? Sony on the one hand, has significant mindset hurdles to get over. Walmart, on other hand, simply needs to redefine their industry sector, evolve and future-proof themselves.
An instransigent mindset to preserve a 130 year old business model, will take a company nowhere in a fast evolving marketplace. Neither will taking shortcuts to keep up with the “Joneses”. If Coca-Cola doesn’t eat humble pie, take advantage of their indomitable distribution network ,and open it up to non-proprietary products, they will face decline. Volkswagen, on the other hand, simply needs to cut out the scandals and leverage their strong position in every segment of luxury and functional automobiles. With a stable that includes Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Skoda and the flagship Volkswagen marques; motorcycles under the Ducati brand; and MAN and Scania trucks, they would have to be foolhardy to fail.
Enduring Spirits
These entities have vision, flexibility, long-term strategy and courage. The Amazon story has been widely told, so I’ll only touch on it briefly. What we knew as the online bookseller of the 90s, was long ago replaced by leadership in an online marketplace and cloud data management. Similarly, the example of Dr. Dre and Jimmy Iovine are not even a company, but a business entity of two individuals that morphs to fit and lead the cultural needs of their music audience.
Amazon
With its cloud computing, extension into distribution and bricks and mortar sales through Amazon Go stores and subsidiaries like Whole Foods, Amazon is riding technology leadership into multiple sectors. They both follow and lead consumer challenges, needs and desires to develop and deliver solutions. With their future-proof vision, they are built to last!
Dr. Dre and Jimmy Iovine
Dr. Dre and Jimmy Iovine both started out as music engineers and producers. They rose to the heights of their music production fame through Aftermath/ Interscope records, in Rap/ Hip-hop, Rock and Urban music respectively. As Napster and digital music came onto the scene, they realized that they needed to evolve their business model in order to survive and endure. Controlling not just the music people listened to, but how they listened to it, was their next brainchild; and thus ‘Beats by Dr. Dre’ was born. https://www.inc.com/audacious-companies/burt-helm/beats.html
While other artists are struggling to replace lost revenue from album sales, Dre & Iovine have maintained their foundation as music producers, while extending their revenue streams, by both owning the music rights and market leadership in a key music delivery system.
With the sale of ‘Beats by Dr. Dre’ to Apple, Dre and Iovine will need to use their unmatched credentials as cultural influencers to chart new frontiers. From ‘The Chronic’, Boyz ‘N’ the Hood, NWA and Snoop Dog… Bruce Springsteen, U2, Stevie Nicks and Dire Straits … Tupak Shakur and Eminem … to Gwen Stefani, Lady Gaga, Iggy Azalea and Kendrick Lamar; they have and continue to produce, not just the biggest music stars, but stars who are also cultural icons. This track record of cultural influence over 31 years and 41 years respectively, is built to last.
They have an inimitable understanding of how culture drives music and how music drives culture. The type of music, the nature of the beats, the symbolism of the lyrics, the narratives that are told and ultimately where and how we listen to the music, all influence culture.
Innovation
This debate is academic if innovation isn’t a company’s central focus. If you don’t have first-mover advantage, your company is a me-too follower. If you’re going to go into cloud computing, how are you going to do it differently than Amazon and Microsoft are currently doing it? For audio-visual companies going into streaming, what are you doing to differentiate yourself from Spotify, Apple Music, Netflix, Hulu or Amazon? There is an entry point, and you have to either set yourself apart through innovating the existing offering, or re-framing the industry category.
Industry Framing & Strategic Considerations
- Are your key revenue and profit drivers matchless and sustainable? Are they built to last?
- Who are your real competitors, based on consumer need and usage repertoire?
- What innovations are in the pipeline to drive your industry, as currently defined, or transform your industry in the next 3, 5 and 10 years?
- What are your real strengths and vulnerabilities? Forget that traditional SWOT analysis, that is a “camel created by committee” and is then filed away forever.
- Do you have the right leader with knowledge, awareness, patience and poise, to have the courage to make the right strategic decision?
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