While I’m too lazy (or burnt) to write a few new screeds this week, as has become our tradition we’ll look back at the posts you guys read and shared the most over the past 12 months. This first one was also one of my favorites because it’s a good example of what I’m trying to do here most days. That is, of course, to take the things that go on around us all the time and find actionable business lessons among all the other stuff. This was from last April 10. Enjoy!
Suppose you have a small but very popular business. You began as a handful of people, most of whom are still with you after you kicked out a couple of uneven performers. While you’ve added some staff as the business grew, every employee is a key employee since there really aren’t any overlapping roles.
Thirty five years go by, the business grows, and while there are good years and bad, the product mix is generally well-received by customers and reviewers. In an industry where products come and go very quickly, this one endures, even though it went through a period where everyone wondering if it had lost its way. The product focus changes with each release cycle to match the times – no one has ever called your business stagnant even though its product sector has gone through some very rough times. In fact, there is an entire secondary business of add-ons and information providers that has grown up around your business. Not a bad place to be.
One day, you learn that a key employee is sick and several months later he dies. You adjust by hiring someone who can do what he did albeit without the strong emotional bond to the team as the late employee. A few years later, another key member – your right hand – passes away suddenly. The team is devastated and there are real questions about the ability of the business to continue. The emotional toll on you is palpable and the business community wonders if you’ll retire and shut it down.
Instead, you decide to replace the man who everyone thought was irreplaceable. You let customers know that it will be different, and while you will make best efforts to minimize the differences, you are up front about it being different and don’t try to pretend as if nothing had changed. You bring on more employees to reinforce some of the differences, creating a transformed product in the process. You release new product – one developed primarily with an outside team for a fresh perspective. It’s very well received, and breathes life into the older products, and customers continue to buy it in droves. The business remains true to its core values and it’s obvious that the old and new employees are on the same page thanks to excellent leadership.
It’s really a textbook case on managing business transformation in difficult times. I was privileged to witness it myself last night. Ladies and gentlemen, Bruce Springsteen and the E Street Band.
For our Foodie Friday Fun this week I refer you to an article on the Eater/Philadelphia blog.
(Photo credit: pomarc)
It makes a statement about food that just might have some business implications too. Let’s see what you think.
In a piece entitled The 10 Signs Your Menu Is Out Of Style, they assert the following:
…what we eat is strongly influenced by the trickle-down effect of creative ideas and the cultural atmosphere we’re making decisions in. But, at what point does an ingredient or dish that once seemed utterly fresh become completely stale?
A classic like roast chicken may be safe, but most dishes are not so timeless. For example: The Korean taco. What started as a food-truck highlight from Kogi in Los Angeles has wended its way to TGI Friday’s menus everywhere. And recently, a bacon-studded sundae has appeared at Burger King. When a dish turns up on a chain restaurant menu, it’s over.
I agree – there’s a huge difference between a classic that’s widely executed with varying degrees of success and something “trendy” that loses its cutting edge. Of course, that’s kind of true about anything in business, isn’t it? The problem with trendy is that it becomes passe. Or as Yogi once said about why he no longer went to Ruggeri’s, a St. Louis restaurant: “Nobody goes there anymore. It’s too crowded.”
If your business is built around catering to the masses, grabbing the latest thing and making it widely available is a good thing. More often than not, we’re not about mass anymore – we fulfill niches, we serve highly segmented audiences, and we can’t afford to let the rest of the world catch up or dilute our magic potion. Apple is the best at this (and yes, they serve mass markets but they’ve moved on by the time others catch up).
So what’s on your menu these days? Classics? Something others will be dumbing down for their own menus in six months? Or are you trying to stay afloat serving up stale versions of other’s creativity? Think about it!
Here is an interesting story from the folks at MediaBiz that just cuts to the core of almost every business issue. It points out the Sophie’s Choice created by some older business models in a time when technology is forcing them to change. First the facts:
DirecTV (Photo credit: Wikipedia)
A handful of DIRECTV subs stopped receiving HBO after the company started blocking the signal on older TV sets that don’t have the encryption standard High-bandwidth Digital Content Protection (HDCP). DIRECTV… recently added HDCP protection to all HBO-owned channels and “will continue rolling out to other premium services in the coming weeks.” The company said affected customers should replace their HDMI connection with a component video cable and a separate audio cable (emphasis added).
Most folks who do so for a living will tell you that HDMI is a better signal (and therefore picture) than component video. DirecTV also markets itself accurately as providing a better picture to consumers. Without content, however, there is no service – it’s a big, empty pipe. It’s the content providers who are insisting on the use of HDCP. They’re the ones whose business model is most impacted by what they presume is widespread piracy and are insisting on this protection layer. DirecTV is placed in the untenable position of either losing the content by catering to their partners or telling customers to degrade their pictures and potentially losing customers who can get better video elsewhere using more current technology.
Ultimately, customers pay the bills. I believe we win when we serve them and while that may, as in this case, cause problems with partners, suppliers, and others, that downside risk vs. that of angry and vocal consumers is minimal. In this case, the customers who would most notice the downgrade to component video are probably the ones who would know how to cut the cord and get the content they seek elsewhere, hopefully through legitimate means rather than piracy. As businesspeople, we encourage that illegal behavior by choosing any segment over our customers – witness what the music business did for a very long time.
That’s where I come out. How do you see it?