Trending
We live in a business world full of disruption.
Whether you work in financial services, manufacturing, logistics or retail, no business today can ignore the rapid pace of change facing us all. Very much led by the never-ending advancement of digital technology , the business landscape and the challenges facing it, seem to change on a monthly basis.
As little as twenty years ago, organisations could quite comfortably rely on having well-respected products and services. Without needing to ‘break sweat’, customers would keep coming back for more. Many businesses could rely almost entirely on their brand name – believing that they had embedded themselves in the hearts of consumers, they could sit back and watch the money pouring in. Others believed that they were the only ones able to manufacture certain products or provide certain services – it was a case of ‘how many do you want?’, rather than ‘how can we help and support you?’.
Today, things couldn’t be more different. Products that were once seen as being ground-breaking, innovative and unique, can now be copied and manufactured for a fraction of the price by factories in China. Digital technology has led to the accessibility of products and services surpassing the product itself as a key differentiator in the buying process. I call it the Amazon principle – you can quite literally buy almost anything you want from Amazon – anything. Why bother going anywhere else when you know Amazon can get most things you could ever want or need within 24 hours? Amazon are the world’s best reason or cause of the need for business transformation.
Amazon recently announced that they were going to start selling pharmaceuticals. It will not be long before they launch their own Bank. I have always said that if Amazon sold houses, we would buy them from them….. because we know they would make it so easy. Unless you have been living in a cave, the way Amazon has disrupted many industries cannot have gone unnoticed.
However (there is always one of those), whilst disruption is slap bang in front of our eyes, businesses and entire industries continue to drag their feet and almost ignore the transformation of their marketplace altogether.
Let’s take Toys R Us as case in point .
Toys R Us stores today look almost exactly as they did when the company was founded in 1948! Sadly, they will now look rather different due to the business going bankrupt last month. A brand that firmly established itself in the minds of consumers around the world, is no more. Why? In my opinion, the answer is simple – the complete failure of the business to transform. The complete failure of those who led it to recognise that their proposition was no longer relevant to the needs and wants of consumers.
Retail, in general, is an industry that contains companies completely failing to continually reassess their ‘why’, as marketing guru Simon Sinek would say. If the leadership of Toys R Us had asked themselves five years ago, ‘what is our purpose?’ ; and ‘how are we going to continue to make our purpose a reality?’; they would have realised that things needed to change. In the UK, retailers have been struggling with this concept since the demise of 100-year-old Woolworths in 2009. Nine years later, as Toys R Us have demonstrated, those who benefitted from the space ‘Woollies’ created have repeated the same old mistakes.
Exactly why businesses are struggling to transform themselves is an interesting question.
Is it fear of change? Is it arrogance? Is it poor leadership? Or is it simply the case that businesses that were created for a specific purpose at some point in the past, will always get to a point where they are just no longer needed anymore?
I spent seven years working for a retailer – a retailer whose brands first started trading in 1890! The business is still going strong today – 128 years later! The business I was recruited by in 2005 was called ‘Littlewoods’. Shortly afterward it became ‘Littlewoods Shop Direct Group’. Today, it is known as just ‘Shop Direct’. The Littlewoods brand is still going strong. Others, such as Kays – the world’s first catalogue brand – has been laid to rest. At the beginning of the noughties, Littlewoods still had 200 bricks and mortar department stores. Today, Shop Direct is the UKs second largest pureplay online retailer – it does not possess any bricks and mortar stores.
The transformation of Shop Direct was genius. Everyone who played a part in it can be seen as a revolutionary of business transformation. It was courageous – resulting in not only the survival of the organisation, but in its sustainability. I actually wrote an article about Littlewoods in 2013 – entitled ‘re-invention and innovation’ , it serves as the perfect case study of effective business transformation.
Related: The Customer Experience Million Dollar Question: Will My Customer Come Back?
In 2018, businesses in all industries need to accept that the harsh reality is ‘transform or die’.
It sounds remarkably harsh and blunt, but it is a very harsh and blunt reality. If an organisation wants to survive in the world today, it must continuously (at least once a year) consider the following ten questions:
The answers to these questions should have a significant influence on both the business AND customer strategy. The actions that need to be taken may need to be courageous – they may result in significant change. They may even result in the company getting smaller before it gets larger.
Factoring this thinking into strategic business planning goes against the norm – the norm being an obsessive focus on revenue and profit generation. Transformation may mean that you must go backward, before you go forward. A reluctance to accept this is likely to lead to necessary change never actually happening. What can be guaranteed is that if you do not facilitate continuous change, someone else out there will – and if the changes they make have the effect of better meeting the needs and expectations of YOUR customers , then it is highly likely that you may not have a business left at all.