If you were in the grocery business in the late 1990s, you already had plenty of competition. There were larger chains like Kroger plus all kinds of smaller IGA stores, not to mention the various convenience stores like Dairy Mart, all of whom were fighting for the same grocery dollar.
The market couldn’t possibly take another competitor entering the marketplace, but that’s exactly what happened. Walmart started selling groceries.
When the behemoth entered the grocery market, most smaller players couldn’t compete. The mom-and-pop stores mostly closed their doors and even the big chains suffered. Business was down and margins were hurt.
The surprising part about this is that most of the players in the market didn’t expect it. They were “business as usual,” and then, suddenly, Walmart came to town. Walmart now controls an estimated 16 to 25 percent of the grocery market nationwide, depending on who you ask. Before the late ’90s, Walmart’s share was zero. The market didn’t anticipate being attacked from that direction, but that’s exactly what happened.
The music industry suffered a similar fate. Remember all the retail record stores that were out there? There were multiple stores in each mall plus specialty retailers on every corner. If you wanted music, you drove to the store and bought a CD. Then iTunes and iPods showed up. It was a game changer. Most of those record stores have long since been shuttered. Who would have thought that you would just download music over the Internet and all those stores would be gone?
The lessons are clear: You will have new competitors, but you won’t necessarily know who they will be or what direction they will come from.
Too often, we are locked into studying our existing market, carefully watching every move our known competitors are making. But while we are doing that, an unknown threat is creeping up behind us.
The only way to fight these unknown dangers is to always be prepared for the worst. It’s the old “an ounce of prevention is worth a pound or cure” adage.
The companies that operate the most efficiently and leverage technology to their advantage will be the ones in the best position to fight off all threats, both known and unknown.
Your management team has to be open-minded to all new ideas and be structured in a way that can quickly adapt to market changes. If your team can’t do this, then either you don’t have the right team or the structure is wrong.
Making changes requires quick reactions, and people need to buy in as soon as possible. To be fair, you need to give people the opportunity to change, but if they can’t adapt with you, then you have to replace them or find a position better suited for them.
In today’s ever-changing economy, there are a lot of very difficult decisions that need to be made regarding your people. You can’t be an effective CEO and run your company like you are the head of a fan club with your employees as the members. Making the changes required to survive and thrive in the world requires fast action, and many of the decisions will not be popular. If you are constantly surveying them to see if they approve of your actions, you’ll probably be headed for failure.
Sell your direct reports on your vision and get their buy-in. After that, you need to get as many people on board as possible. Those that can’t do that in a reasonable time need to move on.
Most people don’t like change, but this is a new era we live in. Speed is imperative. In the time you took to read this column, some unknown future competitor just crept a little closer to launching an attack on your market share. Are you ready for them? Or do you need to send out a survey first?
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or firstname.lastname@example.org.