One of the worst hackneyed clichés is “If it ain’t broke, don’t fix it.” If this is your way of doing business, then it is a good bet that it’s just a matter of time until you hit that big bump in the road and the wheels fall off your wagon. It may start as a small crack in the underlying pavement of your strategy, manifesting itself as a minor issue with an inquiring customer asking when are you going to do this or that, but you can be sure that this slight whisper will build to that proverbial shout. Face it, whether you like it or not, you’re doing business and competing in an age where existing and prospective customers have access to instant information. This includes quickly discovering the first inkling of the “new best thing” that the “next Steve Jobs” has cooking in his or her garage — something that just might be a breakthrough or meaningful, innovation in your industry.
Customer loyalty today is based on a “What have you done for me lately?” mentality. It’s mandatory that your customers be on a constant vigil for how to improve. For customers to be loyal to you, they have to know that you’re always improving and on the prowl for how to do it better or how to find new solutions to new problems sometimes before your customers even know they might have a problem.
To be a player, you have to devote time, effort and, yes, money to perpetual research and development. R&D is not just for tech companies or manufacturers but also for companies that plan to be around tomorrow. Even small businesses, as basic as a cleaning service, have to be on the lookout for anything that can do it better: from the latest vacuum to a new cleaning chemical that proves to be a better solution (pun intended). Retailers, too, are constantly changing store presentations as well as merchandise. In most businesses, the real villain is inertia, which leads to complacency from within and customer boredom from the same old product even if it’s working. When each side of an ongoing relationship starts taking one another for granted, it’s just a matter of time before problems begin to percolate.
Certainly money is tight for small and big companies alike, and the bean counters are quick to give R&D expenses an evil eye. Unfortunately, and even understandably, it’s usually the first thing cut when sales slow and when banks start tightening leading covenants. The justification is typically that innovation needs to be put on hold because there is no immediate return on the investment.
The bigger question for the CEO is, “Are these types of expenses nice or necessary?” I vehemently would argue it’s the latter. Why do car companies perpetually come out with new models with new gadgets every year? Why do technology companies introduce version 1.0, and then, six months later, come out with version 1.1. The answer to both is, “to keep a product fresh and compelling.” It’s about creating a degree of planned obsolescence to ensure that a product doesn’t become commoditized, which can spell the beginning of the end. As soon as that happens, a company’s trophy product will be knocked off and made more cheaply by someone who doesn’t have overhead expenses as high as the originator and who will surely cut the price and the incumbent’s heart at the same time.
Make sure you’re stirring the pot, asking questions of your team members, making it their charge to dig for even the most elusive answers. This leads to innovation, which is followed by creating elasticity for your products because you’ll have found a way to make your widget better and more economical. In turn, this can increase demand and produce planned obsolescence for the older version. To do otherwise, companies run the big risk of being victims of their own initial success.
It all gets down to changing or being a casualty of change. When you improve your business, you can continue to dazzle your customers and hopefully keep them, which will make your business grow, allow sales and profits to increase and create more jobs. This is the heart of capitalism. So, if it ain’t broke, make sure you break it.
Michael Feuer co-founded OfficeMax in 1988, starting with one store and $20,000 of his own money. During a 16-year span, Feuer, as CEO, grew the company to almost 1,000 stores worldwide with annual sales of approximately $5 billion before selling this retail giant for almost $1.5 billion in December 2003. In 2010, Feuer launched another retail concept, Max-Wellness, a first of its kind chain featuring more than 7,000 products for head-to-toe care. Feuer serves on a number of corporate and philanthropic boards and is a frequent speaker on business, marketing and building entrepreneurial enterprises. Reach him with comments at firstname.lastname@example.org.
A unique new book with an unorthodox, yet proven approach to achieving extraordinary success.
What does it take to grow rapidly and effectively from mind to market?
This book offers an unconventional philosophy for starting and building a business that exceeds your own expectations.
Beating the competition is never easy. That’s why it requires a benevolent dictator.
Published by John Wiley & Sons. AVAILABLE NOW! Order online now at: www.thebenevolentdictator.biz
Also available wherever books and eBooks are sold, and from Smart Business Magazine and www.SBNOnline.com. Contact Dustin S. Klein of Smart Business at (800) 988-4726 for bulk order special pricing.