Even some of the greatest brands are becoming obsolete, but it is possible to avoid their fate. Michael McQueen outlines the 10 keys to winning the battle for relevance in the years ahead
Recent years have seen scores of iconic businesses and brands fall by the wayside. The demise of Kodak, SAAB, Borders and Blockbuster leaves us with little doubt – a shift is happening and no organisation or brand is immune to extinction.
As once-lucrative revenue models increasingly come under siege and distribution channels that have been stable for decades crumble before our eyes, it is becoming apparent that the rules of business have changed; the goalposts have been moved.
In the financial services sector, a raft of shifts are disrupting the status quo in profound and fundamental ways. These include:
As consumers have greater power and access to information than ever before, the role of the gatekeeper is more threatened. Simply providing a transaction interface as a broker, agent or adviser is no longer enough.
As the financial services sector becomes increasingly crowded with non-traditional players, incumbents must adapt to the new competitive environment rather than assuming their historical success will guarantee future survival.
As a new generation of consumers and clients known as Gen Y make their presence known, it is critical that businesses and brands take steps to understand and engage this group. After all, they are a massive cohort (9 million in Canada) who are buying different things in different ways and for different reasons than older generations.
The final major shift disrupting the financial services industry is that of regulatory change. While governments continue to move the goalposts as they have in recent years, financial services brands and organisations have little choice but to respond.
Amid these disruptive headwinds, the words of Charles Darwin ring true: “It is not the strongest that survive, nor the most intelligent. Rather, it is those who are most responsive to change”.
The challenge for every financial services business today is to evolve in the face of rapid and widespread change. Simply relying on conventional wisdom or assumptions that have held true in the past will set any brand or organisation on a collision course with obsolescence.
Below are 10 keys to winning the battle for relevance in the years ahead:
1 Change before you are forced to
Most businesses wait to innovate until their hand is forced. As Steve Jobs once observed, if you are not willing to cannibalise your own business, someone will do it for you.
Consider how Blackberry and Nokia have done just this in recent years. Rather than recognising the seismic shifts afoot in their industries, both of these tech giants essentially relied on their historical size and market positioning until the writing on the wall was too dire to ignore.
In contrast, look at how Encyclopaedia Britannica started preparing for the post-print age as far back as the mid-1990s and therefore had shifted entirely away from their reliance on paper-based products by the late 2000s.
2 Become clear about the business you are actually in
Many businesses fall into the trap of defining themselves by the products they sell or the markets they are operating in – all the while losing sight of who they are and why they exist.
Consider how Kodak did this and veered off track in the 1970s and 1980s. Rather that remaining focused on their core DNA as a memory preservation company, Kodak started to see themselves as a film company – a paradigm that left them unwilling and unable to embrace the post-film world.
3 Prune dead wood
Any gardener knows that restoring vitality to a garden requires pruning away the old in order to make way for the new. It is the same in business. Consider how global scientific company DuPont have consistently stayed ahead of the curve by being willing to prune away even their most successful past cash cows, such as Nylon, Lycra and Teflon.
Sony have also recognised the importance of this in turning around their flagging fortunes. The end of their decade-long marriage with Ericsson and the spinning off of entire business units is an attempt to restore the tech giant’s agility and innovative flair.
4 Question everything
The moment any business or leader thinks they have made it, they have passed it. Never fall into the trap of feeling that you are too big to fail or that what has worked in the past will work in the future. Question everything and spare no sacred cows.
Consider how IBM did this in the early 1990s and saw one of the most dramatic turnarounds in recent corporate history.
5 Re-engineer outdated systems and processes
There is a big difference between being in a groove and being in a rut. Many businesses need to evaluate their internal systems and processes honestly. Which of them is outdated, inefficient or simply the ‘way things have always been done around here?’
Harley Davidson realised the importance of this in 2009 amid a severe sales slump and set about re-engineering their internal systems. This exercise saved them $275m in annual running costs and resulted in the business regaining its nimble responsiveness.
6 Beware of biting off more than you can chew
While adopting new products and services is a key way of regaining relevance in a flagging business, beware of trying to change too much too quickly. Consider how Billabong fell into this trap in the late 2000s by acquiring a long list of other brands in the marketplace – a fateful step that has played a key role in their loss of focus.
7 Become ruthlessly customer-centric
It is critical that you stay focused on how the needs, desires and preferences of consumers are changing. Your strategy can never be a ‘set and forget’ one.
Geoff Bezos has a novel way of doing this at Amazon. At every board meeting he leaves an empty chair, which represents Amazon’s customer.
No decision is made without the active consideration of how it will impact on the person in that empty chair.
8 Look to ‘imovate’
The term coined by leading business thinker Oded Shenkar highlights the values of innovating through imitation. He suggests that others may be doing things you can learn from. What practices and ideas are competitors using that you could incorporate and do differently or better?
Consider how Lego did this in embracing video
games; how Samsung did it in the development of their smartphone range; and how even Apple did it by not inventing the MP3 player but rather making it sexy.
9 Encourage dissension within the team/organisation
The most valuable source of innovation in any time is the individual who has fresh eyes or a dissenting view. Are you allowing and encouraging those views to be heard? IKEA did and the whole basis of their flat-pack business model came about as a result.
10 Seek a point of difference
The old marketing adage is true: it is better to be different than better. Rather than trying to outdo the competition in your market, how can you pursue a new market in a new way?
Consider how Cirque du Soleil did just this and managed to build a flourishing business in a dying circus industry.
EYES ON THE HORIZON
Setting up a brand or organisation for enduring relevance involves a principle every experienced surfer understands well. In order to catch the perfect wave, a good surfer knows the importance of keeping their eyes firmly on the horizon.
While a wave is still forming a long way off in the distance, surfers know that this is the time to move – to paddle out and get in position. Move too late or not at all and you’ll simply get washed up as the wave crashes over you.
In much the same way, winning the battle for relevance is about anticipating, preparing for and embracing change, no matter how uncomfortable or confronting it may be.
Michael McQueen is the author of the newly launched book, Winning the Battle for Relevance. He is a leading social commentator and three-time bestselling author. Winning the Battle for Relevance is available in bookstores across the country and through Michael McQueen’s website: www.MichaelMcQueen.net