We could be forgiven for being confused about business improvement…
It’s no wonder a great proportion of businesses are unremarkable. They receive seemingly contradictory advice on how to grow. It becomes unclear what to do next when results are declining.
We are expounded to do the following on a regular basis from all the business tomes assaulting our inbox, social media feeds and the blogs we follow.
Focus, focus, focus on your core business vs disrupt your own business before someone else does
Innovation required vs the need to close the gap between strategy and execution
Productivity efficiency vs develop a service business
Make sure you invest in your people vs get the right people on the bus
Get a social media strategy vs maintain direct customer contact
Everyone knows and has experienced, in some part of their lives, how difficult it can be to achieve change. Its almost as if we need a burning platform (imminent threat) to achieve the focus and commitment we require to MOVE.
Endless “do better” programs exist to get companies to improve and still, 87% of the time, businesses will hit a significant flat spot or decline in their revenue. It happens to the best.
Here are the names of some companies one can’t help but respect over the long haul…..
- GE
- Xerox
- IBM
Why?
Firstly, they have all invented products that have had a significant impact on the world.
Secondly, they have done what many, many, many (did I say many?) physical product companies have tried and failed to achieve and that is to change their business models to generate a substantial portion of their revenue from services.
Thirdly, they have all been around for greater than 100 years. (Founded in 1892, 1906 and 1911 respectively)
Lastly, they have all had near death experiences and survived.
GE’s was in 2008 when Warren Buffet’s Berkshire Hathaway invested $3 billion to shore up their balance sheet amidst the global financial crisis
Xerox had theirs in 2001/2002 when their share price declined from a high of $64 to just $5.
IBM’s was in 1993 when it posted the largest corporate quarterly loss in history (at the time) ringing in a $5.5 billion loss.
But more importantly than any of the specific events and circumstances that triggered those harrowing times, they have all managed to scrap, fight, think, innovate and survive their way to different markets, vastly different product portfolios and newer business models. Many, many, many (did I say many?) other companies were not able to do that and filed for bankruptcy. (Lehman Brothers, Kodak, GM)
Here are some companies that are currently the toast of the town:
- Uber
- Airbnb
- Snapchat
These companies are all in the top 10 list of UNICORNS. A unicorn is a privately owned start up that has achieved a valuation greater than $1 Billion.
The UNICORNS have very bright futures. (As did Xerox with a 95% plus market share in photocopiers at 70% margins in the 60’s and early 70’s before their market share dropped to 14% in the space of 4 years by 1980). The longer they are around the more the 87% odds of them having a major slump in revenue mount…
In each case above, the three “legacy” companies had their burning platform to achieve the change required to endure. A word to the wise for the newbies……don’t leave it until a near death experience to change up your offer because your products WILL erode and disappear over time. For all the non UNICORNS out there…. best to start now, don’t wait for the engine to stall.
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