The Road We’re On
“If you don’t know where you’re going, any road will get you there.” Lewis Carroll, author of Alice’s Adventures in Wonderland
Most of you made a number of hard decisions going into spring 2009, decisions necessary to your survival. You did things like reducing payroll and inventory levels; deferring facility improvements or expansions; or putting off the introduction of new programs that required financial investments. And with the economy just starting to show some hints of what will be a very slow and prolonged recovery period, most of you either maintained or intensified these reactive changes to the current environment going into 2010. The key word here is “reactive”: You made changes to your existing business model or operations based on factors you couldn’t control, with the hope that when the economy was healthy again, you could reverse some of those decisions you recently made and go back to the way things were before the economic crisis hit. These changes were envisioned as Band-Aids that could be taken off when conditions improved.
But if you subscribe to what I and many others have been suggesting in the past few months, the economy and consumer spending won’t revert to “the way it was.” The impact of the current economic challenges on consumers will shape their buying behaviors for many years to come; the new mindset of the “grounded consumer” is here to stay. The days of consumers funding their lifestyles with easy credit and home equity are over; they’re realizing that they have to be more fiscally responsible for their own futures. The competitive landscape has changed with retailers putting more emphasis on price value than ever before; this, too, will be with us for many years to come.
All of this raises some questions. Your “old” business model was built on the “old” economy driven by the “old” consumer. Will the reactive changes you made to your existing business model those that allowed you to survive the prolonged economic downturn and the resultant challenges on consumer spending be enough to grow your business in the future? Or do you need to rethink and develop a new business model that caters to the “new” grounded consumer and how they think about spending in a new world ofcompetitive retailing, dealing with significant changes that will be more permanentthan temporary?
A New View
“Creativity is a lot like looking at the world through a kaleidoscope. You look at a set of elements, the same ones everyone else sees, but then reassemble those floating bits and pieces into an enticing new possibility. Effective leaders are able to shake up their thinking as though their brains are kaleidoscopes, permitting an array of different patterns out of the same bits of reality.” Rosabeth Moss Kanter
If you were starting your business from scratch tomorrow, on a clean sheet of paper, without any limitations, would your new vision look anything like your current business plan, facility, strategy or programs? I recognize that you have a lot invested in your current business model, but you’re in retail to satisfy and address the needs of consumers. They shouldn’t have to conform to what you’d like them to be. Your current business model may allow you to survive, but will it allow you to grow and to take advantage of the new opportunities and possibilities that are out there today, tomorrow and in years to come?
I’d suggest that you take a few hours, either alone or with your management team, and create a new vision for your business as a startup company, without any influence from your business as it is today. That will probably be the mostdifficult part of this exercise, as you will most likely try to protect or defend the decisions you’ve made over time, but you need to remove all of your personal biases and the physical limitations of your current operation from the process for it to be effective. Think about the new grounded consumers and their spending habits, not your “old” customers or your ideal customers. Think about those consumers’ financial challenges and limitations. Think about their new value system and how it will shape their purchase behavior. Think about the needs of the different generations. Think about how you could best communicate and connect with new consumers. Think about other businesses in this competitive arena and anticipate where they might be in their thinking and positioning, now and in the future.
If you are honest with yourself throughout the vision process and have done your homework to understand the new consumer, you’ll most likely see that there are a lot of desired areas that your current business model can’t support or that you hadn’t thought of before. You might find opportunities that can help you better position your company for future growth and build relevancy with your desired customer base.
It’s highly unlikely that you would want to bulldoze completely what you already have and build a new startup company; you have a lot of brand and capital equity that you want to protect and leverage. That said, this vision-creation exercise can be a valuable tool for positive change that can foster:
- enhancements and repositioning of your current programs and services
- the addition of new strategies and programs to address new opportunities
- exiting or scaling back businesses that don’t make sense for longer-term growth
Unlike the reactive changes you were forced to make in the past few years to survive, your new vision can be the catalyst for planned change over time. It can be a guide for setting a new strategic direction. You’ll be able to implement some of it immediately, and others will take time based on the need to modify your operating structure and resource availability.
Joel Barker, a noted business futurist, sums up the importance of the need for vision: “You can and should shape your own future, because if you don’t, someone else surely will,” and “Vision without action is a dream. Action without vision is simply passing the time. Action with vision is making a positive difference.”
Planned change is always more positive, effective and profitable, and it’s almost always easier to implement. Creating your vision is the first step in your change journey…
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