Is it time to reinvent yourself, or your company? It’s hard to say – but this article might shed some light on it.
Whenever I think about tough economic times – such as we’re dealing with now – I always remember an interesting story about the inventors/founders of the Palm corporation. You know, Palm – the company that basically built the handheld computer industry. In the article, I was reminded of the fact that Palm actually started as a company that made software for handheld computers made by other companies. They just had one teeny-weeny little problem in the early 90s. Their industry was dying without ever really living.
If you remember, the handheld computers of the time sucked. They were heavy, awkward, and didn’t work well. Therefore, if you happened to be in the business of making software for a type of computer that people weren’t buying, you were not in a particularly good position in the market. During a meeting with their investors, one investor happened to ask Palm’s founders if they knew how they would build their own handheld. Jeff Hawkins, the brains at Palm, replied that he did. Hawkins actually didn’t have the slightest clue how to build a handheld, but the board didn’t know that. They tasked Hawkins with reinventing Palm. And in the reinvention (if you hadn’t guessed), there’s a Business Development lesson for all of us.
Frankly, Hawkins was working with more machismo than anything else, but sometimes, that’s what it takes. After the board meeting, he and his co-founder had a brief meeting where they decided that it was better to take a risk of going out in a blaze of glory, rather than dying of a thousand paper cuts as their industry tanked. The rest, of course, is history. Palm reinvented themselves, and in so doing, reinvented their industry. It goes without saying that a lot of people got rich in doing it.
I’m reminded of a couple of my Consulting clients (and several other people I’ve talked to in the last couple of years) who lament the fact that their industries are dying, shrinking, or just stagnant. Or worse – that their companies are. Or, finally, I’ve encountered salespeople with the same lament about their territories. And they don’t know how to fix the problem. Well, take heart. There is a fix. But it takes the same kind of huevos that Hawkins showed, and sometimes it takes the willingness to plow forward without a full knowledge of what lies ahead.
If you’re finding yourself in this situation, you have to reinvent yourself, or die a slow death. One essential truth of business is that you’re either growing or shrinking. There’s no middle ground. Even if your revenues are the same year to year, you’re shrinking due to increases in costs. And if you’re shrinking, it takes radical steps to fix the problem. I’ll tell you how, but I’m making the assumption that you’re doing things right. You’re still making sales calls, your products and your services are meeting customer expectations, and overall, you’re not actively killing your company. Here are the things you need to think about to reinvent yourself:
- Change your stuff. Your “stuff” is your array of products and services. Sometimes, the stuff you’ve been selling for years is no longer the stuff that the market demands – maybe your technology has become obsolete, or maybe your products have fallen behind your competitors. You still have a valued asset – your customer relationships. Use that relationship. Find new stuff (preferably somehow allied to your current stuff) that those happy customers will buy from you. I worked recently with the sales manager for a copier company here in Kansas City. Nothing remarkable in that, except that the company started many years ago as a typewriter repair company. Think there’s a lot of call for typewriter repair these days? At some point, they reinvented. With some good sales training (provided by me of course), they have succeeded.
- Change your customer base. Maybe, instead of adding new products, your stuff can be sold to a different industry or customer base. The classic example of this is Viagra. There’s no delicate way to put this, but Viagra was originally developed as a medication for certain heart conditions – and it didn’t work as well as they hoped. It had…uh…certain side effects that were marketable. Conventional thinking trashes a couple hundred million in research and development – creative thinking has made billions.
- Go to the mattresses. Remember that old line from the “Godfather?” Sometimes, you’re not in a position to change your customers or your products. It’s just that someone is going to survive, and it’s going to be either you or your competitors. Well, who’s it gonna be? This is definitely a risk it all strategy, but if you’re going to do this, there’s no halfway. History is littered with failed companies that viewed their competitors as “gentlemen” and “friends” who reacted too late to their competitors’ aggressiveness. Don’t be that guy.
- Cut out the middleman. If your product or service is sold through distribution, and those distributors quit supporting you, don’t wait. Go to the end user. It’s a tough strategy, but if it’s survival, who do you want it to be?
- Vertically integrate. This is what Palm did. Their survival depended on the quality of the manufacturers upstream from them. When those manufacturers laid a collective egg, they were toast until they decided to take control of their own destiny. A decade later, they still command the handheld computing market.
Usually, I write my columns hoping that they apply to a lot of my readers. In all honesty, I hope it doesn’t apply to too many of you. However, if you see yourself in any of the above examples, it’s time to fix the problem. You can either write a success story or a failure. Good luck and good selling!
