It is not necessary to change. Survival is not mandatory. – W. Edwards Deming
I recently went for a walk while listening to a pre-recorded podcast on my iPod. At the end of the podcast there was an advertisement for an App to get the podcasts live. So I unplugged the earphones from my iPod and into my smartphone. Two minutes later I was enjoying the latest podcast on my phone. I haven’t taken a walk with my iPod since.
Some might say “big deal”, but it IS a big deal. My smartphone has replaced not just my mp3 player but also my camera, my pedometer (I used to take both of these on walks too), my GPS unit (no, I didn’t take one on my walks) and for many people their watch. I am not privy to the market data on these products, but they’re all certainly now mature markets. Companies in these sectors are likely facing the prospect of declining sales.
I wonder – did they see it coming? Imagine telling a company riding the digital music player or digital camera boom a few years ago that the end was near. But there are many cases of successful companies being surprised when something new comes along, often from outside their current market, and eats their proverbial lunch.
The lesson is that it’s worthwhile conducting a regular strategic review of your market, technology and products. I don’t mean just which deals you lose, but actually looking at competitive/substitute products and the technology landscape beyond. Use these products and see how they stack up against your own. Think about how well they satisfy the customer’s needs (do they deliver the important 80% of the value for just 20% of the price – along with some unexpected novel features?). Take them apart and dissect their technology. Now, think of where the products and technology are going and consider what could cause your product to become irrelevant. Companies that are paranoid enough to do this on a regular basis have a chance to respond early enough to change, and stay in business.
I’ll bet you an iPod and an old digital camera that you can think of some companies that weren’t, didn’t and now aren’t!
NB: with this post, we welcome Chris Barrett, VP Engineering, to Stratford Managers.