Creating and maintaining a business that lasts requires leaders with a particular vision, awareness and dedication—leaders who can morph and steady their organizations in keeping with the market and technology to the greatest long-term benefit.
The previous decade has provided examples of several industries where leaders didn’t do a good job of the anticipating, adjusting and leading through changing of market dynamics, consumer preference and technology.
The death of newspapers came the day someone said, “I know. We should take all our content—the stuff people have been paying us to produce for centuries—and put it all online for free.” When asked how they were going to monetize the giving away of their product, the newspaper brain trusts said, “We’ll figure that part out later.” And the nail in the newspaper coffin was struck. The decline of “readership” began, which of course, led to the decline of advertising, which led to the gutting of newsrooms, which led to poor products. So in a time when there is more demand for information than ever before, the primary source of information of the last century is no longer in a situation to provide it.
But newspapers weren’t the only industry to suffer a digital demise. At the turn of the century, video rentals were riding high, but they didn’t do enough to keep up with technology and video on demand made their business model obsolete. Had it looked ahead, video rental companies could have retained their market.
Film for cameras has gone the way of VHS videos. Like newspapers and video rental stores and companies heavily invested in film technology were content with their fat and happy existence. They forgot to continue focusing on emerging technologies and their customers’ needs and convenience in the changing digital image market. Additionally, they failed to remind their customers of the value in holding a picture in one’s hands. Digital images are here, there and gone ten times faster than it took a Polaroid picture to develop.
TO BUILD AN ENDURING BUSINESS, YOU NEED TO:
1. Create a product pipeline and product lifecycle that remains relevant.
Are you regularly refreshing, upgrading, improving or replacing products? Is your portfolio of products and services remaining consistently connected to its customer base? Are your products cost-effective to your customer for what they provide? Are you aware of competitive alternatives or substitutions to your product base?
2. Build a marketing and messaging machine to tell your story and communicate the benefits of your products and services.
Are you staying relevant to your audience? Are you constantly refining your message to communicate the key benefits your product provides its customers?
3. Protect the goose that lays the golden eggs.
What is it about your business model that gives you the advantage in the market place? Are you properly maintaining your assets and equipment? Are you protecting that advantage? (If it’s your sales company, then don’t strip out costs. If it’s about your manufacturing capabilities, then keep them up to date. Protect those core assets.)
4. Establish a never-ending secession and leadership transition planning process.
All leadership transitions are difficult. Part of the challenge is anticipating potential events and planning appropriately with ready-now successors. This is a bigger issue in smaller businesses than in larger businesses. Do you have a process in place to develop your future leaders? Do you have ready-now successors in place?
5. Place strategic bets and do your homework. Narrow your focus.
Don’t take the peanut butter approach on strategic bets. Too many people are afraid to place bets and spread the bets too thin. What are your top three strategic bets? Make sure you properly resource them—funding, people, materials and management support.
What two or three initiatives will have the biggest impact to top and bottom line growth? If you could only do three things right next year, what three things would they be? If I wanted to change my relationship with my customers to make them stronger, what three things would I do?
6. Be comfortable with the decisions that have to be made.
Make them. Track them. Stick to them.
7. Stay aware of advancements, technologies and trends directly and indirectly linked to your business.
Sometimes a fad turns into a revenue model that can kill your business. Unless they’re yours, technology advancements and potential capabilities are the factors of your business that you control the least. You have to adjust to them rather than them adjusting to you. How you choose could make or break your business (think newspapers). Technology is the hardest to strategically encounter in the marketplace. It requires you to think completely differently about your business if your business is going to succeed.
If you bet your farm on horse whips, and along came the automobile, you’re in trouble. Unless you figure out how your capability in producing horsewhips can serve the emerging market.
RECAP: HOW TO PUT THESE TRAITS INTO ACTION?
First, be aware of the big picture. Where does your awareness as a leader come from? Don’t underestimate the people and places that can open the doors of technological possibility, perspective and opportunity. Find the potential sources and people who take you to the edge—or just past it. They may be quirky, but you need them.
Second, plan for disruption. Leaders of enduring companies anticipate external changes that will have an impact on their business model. In the planning processes of strategy, marketing and products, they create contingency plans for disruptions in technology and/or competition.
Finally, get your team right. Building an enduring business is about people. It’s about having the right team in place—a team that has the capabilities, perspective and experience in the industry to know the business and anticipate changes.