How to Reinvent your Business?

In today’s competitive business world, it is likely your edge over business rivals become smaller everyday, and before you know it, it is gone in the blink of an eye.

What does this mean?

 It simply means that your products and services have been copied by the competition. And that they have put one over you, a better and more customer- oriented business model.

A product or a service’s life usually lasts for months, or years, even decades, or until the competition finds out your business secrets, copies them, and sells an improved version that puts you out of the competition, or worse, out of business.

Warning Signs

There are tell-tale signs of a dying product or service.

Here are some of them: 1.) costs become counter-optimal (additional cost does not yield more sales or profits), 2.) sales volume declines or stabilizes, prices and profitability diminish, and 3.) profit becomes more a challenge of production/distribution efficiency (cost cutting) than increased sales.

These are warnings. And when you observe these signs, you better get your act together and review your business to avert its death.

Yes, your business could die if you don’t heed the warnings.

First, this means that your business model, or your product or service has lost its competitive advantage. It cannot compete anymore and is slowly losing its leading position to the other players in the business. Second, the product or service is already at the end of its product life cycle, or the industry you are in is already in the sunset of its life.

Whatever the situation, don’t lose hope because all is not lost.  You can reinvent your business.

According to experts, reinventing your business means innovating on the business model you employ to create value and generate profits. A business model describes the underlying principles of how an enterprise creates and delivers value--- economic, social, or other forms of value.

When a business is established, it either explicitly or implicitly uses a particular business model that describes the design or architecture of the value creation, delivery, and capture mechanisms employed by the business enterprise. The essence of a business model is that it defines the manner by which the business enterprise delivers value to customers, entices customers to pay for value, and converts those payments to profit: it thus reflects management’s hypothesis about what customers want, how they want it, and how an enterprise can organize to best meet those needs, get paid for doing so, and make a profit.

Catalysts

Reinventing your business may be undertaken using various forms of catalysts. Prominent among those used by experts to reinvigorate a dying enterprise, or jump start a fledgling start up are the following: innovation, branding, technology and corporate culture.

While each enterprise is unique in itself, the use of one or any combination of the stated catalysts will be able to stimulate and renew the growth of a business.

Let’s define and discuss each catalyst on how it delivers a fresh kind of enthusiasm and interest in the business.

Creating Something New

Innovation is when you create something new to spark renewed interest in your product. This term may mean different things to different people, but simply put, innovation means something entirely new. In the context of enterprise management, it is said that when a business stops innovating, it stops growing. 

Incongruously, when business is excellent, entrepreneurs forget about innovating because there is no need for it---not realizing that doing so may in the long term spell death for the enterprise.

Innovation can come in a new product, or a new way of selling , or still, a new method of producing the product that lowers price. 

But according to the Beveridge Consulting Group in the person of its CEO Dirk Beveridge of Illinois, USA, it is not just these things that provide the competitive advantage.

“The competitive advantage must be their willingness and desire to better understand the needs, desires, wants, opportunities and problems of their customers better than anyone else,” said Beveridge.

“And they must have the skills to provide value-added services. That is the competitive advantage---not the product, not the price.” It is what Beveridge calls product orientation vs. customer focus.

Customers are more difficult to satisfy nowadays. 

So if you want your innovation to be successful, then it must satisfy the customers’ needs first; product improvement or innovation comes later as a result of being able to determine what the customer actually needs or wants.

Consistent and Focused Approach

Second catalyst is branding, wherein the brand acquires a new and distinct personality from the old one.

As defined by experts, a brand can take many forms, including a name, sign, symbol, color combination or slogan. Historically, the word brand began simply as a way to tell one person's cattle from another by means of a hot iron stamp.

Today, a legally protected brand name is called a trademark. The word brand has continued to evolve to encompass identity - it affects the personality of a product, company, or service.

It is assumed that brand marketing can effectively change the perception of customers of the products and services of an enterprise, and can consequently enhance the value of the product or service. For the entrepreneur using branding as catalyst, it is important that he is able to communicate exactly and accurately what the business does exceptionally well for the customers. This should be done in a distinct and consistent manner in all forms of communication media including advertisements, the internet and events and trade shows.

The new branding strategy will do for the new business the following:

•                  Position the product or the service in a new light considering customer needs and        preferences; 
•                 Repackage the product or service to effectively communicate its value added features; and

•                 Expand the market for the product or service.

A word of caution for the entrepreneur, branding is not as simple as it may seem. To be successful, one must invest resources in research to find out what needs to be improved in the product or service, in the way it is communicated and delivered to customers, or in the target customers themselves. 

One must have a customer-focused approach to come up with a new brand and be able to communicate this effectively.

Some tips from known practitioners of the branding strategy: “When using this strategy, according to Charles Conn, Managing Director for the Boston-based Encompass Communication, a design and brand marketing firm, “branding becomes a matter of consistent repetition of the presentation of the company name or product.”

“Without consistency, the target audience may view the company or brand as confused, resulting in a lack of confidence and loyalty to the brand or service,” he explains.

Dan Droz ,  President of Droz and Associates, a branding and design management firm sums it up, “Reinvention through branding can work for any company that understands both its customers’needs and distinctive positioning that allows the company to fulfill those needs.

Leveling the Playing Field

Another way of  reinventing your business in through the use of new technology.      Technology is the process by which humans modify nature to meet their needs and wants. Most people, however, think of technology in terms of its artifacts: computers and software, aircraft, pesticides, water-treatment plants, birth-control pills, and microwave ovens, to name a few. But technology is more than these tangible products.

Technology includes allof the infrastructure necessary for the design, manufacture, operation, and repair of technological artifacts, from corporate headquarters and engineering schools to manufacturing plants and maintenance facilities. The knowledge and processes used to create and to operate technological artifacts -- engineering know-how, manufacturing expertise, and various technical skills -- are equally important part of technology.

In today’s business world, the fastest and most efficient way of jumpstarting your business is through the technology of the internet, or the Web.

Two points of view emerge in the use of the Web. First, it levels the playing field for entrepreneurs and allows enterprises to reinvent themselves to compete in a global scale. Second, the Web forces enterprises to remodel themselves or be left behind as technology continues to improve. Businesses in the internet are compelled to create its distinctive personality to attract customers, encourage brand loyalty because barriers to entry of competitors in the Web is so low.

In a way, the Web allows the enterprise to expand its market to the optimum it can, given the billions of people subscribed to the internet. Its limitations however, is itself given the limited resources of the SME. However, the Web leverages these resources to the maximum enabling the SME to double its market exposure in the least possible time and effort.

The Web also contributes to the efficiency of the business especially in the selling and collection of payments. “Folks go online, do their purchase research, and complete the transaction in a jiffy either onsite (going to the store and purchasing the selected item) or electronically buying it through the internet and just wait for delivery. This level of efficiency can double sales by as much as threefold based on the experience of many Web users.

Changing People’s Culture

Finally, you may reinvent your business by focusing your attention on your greatest asset---your people. This is usually done by a strong leadership in the organization that can drive a corporate culture that says to the people: either you grow; or you go!

In short, it will require a change in your organization’s mind set.

Business culture is a blend of principles, ethics, attitudes, way of life, things forbidden and prohibited, symbols, traditions and folklore all organizations develop over time. You may not think about it, but your business has its own culture.

Whether formally written as a mission statement, or merely spoken and understood, culture governs the way owners and employees think, feel and act.

If you're not happy with your current culture, there are things you can do to change it now.

Look for a symbol, story, ritual or some tool you could use to bring out the values and practices you want for your organization.

Your cultural tool might be a new corporate logo symbolizing your company's personality. Or you could choose a story to embody your approach and make it part of your culture.

If you can't find a tool, make one. For example, you can turn an admired former employee into a symbol by giving an award named after that individual, complete with ritual ceremony.

In the Philippines, we can easily think of a few examples of reinventing one’s business through a change or adoption of a new culture.

For example, a popular pizza chain “Hates Late” and challenges customers to prove them wrong by committing to deliver in a certain number of minutes.  This establishes a norm of behavior among employees to be always on time.

Then there is a drug store that says, “Gising 24 Oras” (Awake, 24 Hours) showing its culture of always being there to provide medicines to Filipinos in a timely and efficient manner with the customers’ convenience utmost in its work ethic.

Another example is an academic institution known for its intellectual snootiness changed its culture by a policy of democratization of its admission policies, where the rich students subsidized the poor. Now, it is populated by the well off as well as the poor students, and is known for its democratic ideals and principles.

Reinventing your business is not easy. It takes a lot of creativity and hard work. But given all things needed to be successful, one thing is crucial: “you will need to obtain a shared commitment to change from all your enterprise’s stakeholders---employees and officers alike, and a readiness from them to redefine the business.” In all likelihood, your business will be competitive and grow in the future.