The Future Ain’t What It Used to Be: Are You Ready to Change?
This article is a reprint of Wise Bread's contribution to OPEN Forum from American Express -- where small business owners can get advice from experts and share tips with each other.
When was the last time you licked a stamp or sent a telegram? Used a folded map to find a scenic overlook and then took a picture with a Polaroid camera? Looked up a number in a phone book and made a call at a pay phone? Stuck a 3 ¼ inch diskette in your computer or a cassette tape in a Walkman?
All those products used to be made by companies that today either sell a whole new line of products or they’re out of business.
Employees are changing too, as baby-boomers retire in droves and younger workers—with very different values and aspirations—take their place. Consumerization, as it’s called, is changing the IT landscape thanks to laptops and iPads that exceed the capabilities of office computers and put new demands on infrastructure. Even customers are changing as they adopt social networks, expect customization, and demand green responsibility.
Managing change is the biggest challenge facing business owners today.
What Business Are You Really In?
“The railroads did not stop growing because the need for passenger and freight transportation declined,” Harvard professor Theodore Levitt famously wrote in Marketing Myopia. “They let others take customers away from them because they assumed themselves to be in the railroad business rather than the transportation business.”
So what’s the railroad equivalent today? The music business comes to mind. Napster was a wake-up call, and iTunes change everything. The movie and television industry is next in line. Consider, for example, that the top-grossing 2011 movie, Harry Potter and the Deathly Hallows: Part II, made about $380 million in four months. The electronic game, Call of Duty: Modern Warfare 3, made over $400 million within 24 hours of release.
If Hollywood understands that it’s in the entertainment business, not simply the movie business, before long we won’t watch films, we will interact with them, defining the story line based on our game playing skills as a gunfighter or car driver. If instead, they bury their collective heads in the proverbial sand, they’ll find themselves on an express train to nowhere.
The same is true for small business owners. If you don’t understand what business you’re really in, you can’t predict where your market is headed—much less get there ahead of the competition.
Can You Predict the Future?
Physicist and science fiction writer Arthur Clarke wrote, “When a distinguished but elderly scientist states that something is possible, he is almost certainly right. When he states that something is impossible, he is very probably wrong.” What’s more, he wrote, we tend to under-predict the near future and over-predict the more distant future.
For over a hundred years, Eastman Kodak was the name in photography. Could they have foreseen the demise of film? As a matter of fact, yes.
Twenty-five years ago they hired my wife to do a series of international lectures to alert photo processing companies that the end was nigh (of parking lot film drop kiosks). Although they saw it coming, Kodak failed to change. Today, with billions and billions of photos captured on iPhones and digital cameras, the name Kodak is seldom seen. Ironically, some of the most popular iPhone apps are designed to make iPhone pictures look like they were taken by old film cameras using Kodachrome film.
Eric Schmidt, Google's founder and chairman, said it concisely when he recently wrote to a U.S. Senate subcommittee, “...history shows that popular technology is often supplanted by entirely new models.” He ought to know. His company didn’t even exist in 1998. Now Twitter, created in 2006, is threatening Google by handling 1.6 billion searches a day and providing on-the-spot news.
What Can You Do About It?
If change is inevitable—and accelerating—how can you manage it? Alan Kay, 40 years ago said, “The best way to predict the future is to invent it.”
Unquestionably, agility and innovativeness are the most important capabilities for a company in a rapidly changing world. What you’re doing today is not what you’re going to be doing five years from now. Which raises the question, why in the world is Apple building a new corporate headquarters that will be bigger than the Pentagon?
One firm, you know who it is, that gets it is offering $100 million to the start-ups that will help it transition from being a credit card company into a financial services company. Credit cards will soon be a thing of the past. When your smart phone allows you buy anything from a soft-drink at a vending machine to expensive jewelry in a hoity-toity store, plastic is useless. In fact, you can already use your iPhone to buy merchandise and check yourself out in Apple stores.
The Moral of the Story
Most companies can survive, in some way, just as the homeless manage to survive in some way. But is that good enough for you? If you aspire to do something great, can you make it happen? You have to believe in it, invest in it, even tweak the universe to make it happen. Can you do that?
You can’t simply deliver a product or service. To be more than a survivor, to succeed, your company needs to do one thing—it needs to satisfy the needs of its customers.
As Theodore Levitt put it, “In short, the organization must learn to think of itself not as producing goods or services but buying customers, as doing the things that make people want to do business with it.”
Are you doing that now? Will you be doing that tomorrow?
Tagged: Small Business Resource Center, business change, business models, business planning, change management, small business
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