How to save your business from decline
Forget it. In business there is no permanent advantage; neither is there assurances of continued revenue except the business regenerates and re-engineers to meet changing whims in its industry.
By developing a point of view about the future, harnessing foresight and sustained debate based on trends in technology, lifestyle changes, regulations and demographics, entrepreneurs can scale or pivot their efforts to stay relevant as Gokada, formerly a ride-hailing firm, did by moving into food delivery.
“Lay-offs”, “CVAs”, “restructuring”, “downsizing”, and “streamlining” – you hear all kinds these days – are consequences of short-sighted management which had committed more intellectual and material resources into shoring up the present than projecting into what the industry, competition or the consumers would look like in the next 5 to 10 years.
It is often said that you can’t have your cake and eat it. Maybe, somehow, you have to spread the cake over the years ahead so that you can have just enough for brunch sometimes. In business, this witty introspection is valid. It is much more compelling to keep track of change and prospect for them.
Precisely, the ability to do this consistently accurately is the trade that marks and maps fortunes for businesses that choose to think and rethink to unfurl new processes, new ways, and new competences, for an unpredictable new generation of users and buyers of services and products.
Why is it necessary to continuously future-proof your business?
- Today’s customers may be quite different from tomorrow’s customers – ask Xerox and Canon if the margins from inks on paper are sustainable
- Channels through which products reach the customers may change – Is Netflix and Amazon not dumping cable TVs and brick and mortal respectively?
- Who the competitors are may change – Are Washington Post and Time Magazine still competitors in the face of Facebook and Google’s superior content aggregate and ads revenues?
Developing a distinctive view of the future is not negotiable in reaching new perspective. Any organisation which neglects this fact will end up putting itself in trouble. You see the consequences everywhere. Sears, once a US retail giant is dying a slow death. Toys R Us is unbelievably out. Maplin has collapsed. New Look has been closing down stores after stores. Air Berlin is gone. The celebrated Ryanair is fighting to keep its once vaunted business model.
Asides that, there are panic mergers, buying and take-over here and there, hurried to sustain existence. Nestle is working to climb on the back of Starbucks into the next-phase of coffee consumption in North America; Fox is putting its lifeline in Sky.
When a business fails, it means someone trusted with the rein slept on the watch. It is like the captain of the ‘Titanic’ who failed to sight the iceberg from a safe distance. Most notably, they are the top executives whose shortsighted ambitions and academic stubbornness make victims of past glory. When caught unawares by a regenerated market and consumers, these ‘celebrated’ execs activate the next line of action by making the ‘asset sweat’ or ‘grow lean’ to support ballooning overheads as well as rein in R & D. These at the end of the day put pressure on the society as more people are laid off when businesses liquidate or downsize.
Perhaps, these could have been prevented if, according to C.K Prahalad and Gary Hamel, in their book, Competing for the Future, companies sincerely can provide timely answers to these ‘present’ and ‘future’ questions:
- Which customers do we serve today? Which customers will we serve in the future?
- Through what channels do we reach our customers today? Through what channels will we reach customers in the future?
- Who are our competitors today? Who will our competitors be in the future?
- What is the basis for our competitive advantage today? What will be the basis for our competitive advantage in the future?
- Where do our margins come from today? Where will our margins come from in the future?
- What skills or capabilities make us unique today? What skills and capabilities will make us unique in the future?
As new generations of consumers begin to take their health seriously, we have seen Coca Cola supporting its product portfolio with Diet Coke, Coke Light; Pepsi has also done the same. Walmart bought jet.com, JD.com and Indian Flipkart, to compete favourably against Amazon as consumers seek more convenience via online shopping. Bloomberg has stepped up its online publications to shore up current preference for online content.
The future will no pity for those businesses which won’t let go of the past, and develop a clear view of the future. By developing new product concepts and building new competences, OR regenerating and reengineering the organisational structure take advantage of an-always-changing business climate, entrepreneurs will keep making a difference in their industries.