Adapt or perish

We have seen the demise of HMV and Jessops in the last few days. OK, administrators may prolong the agony, but these are companies that are deeply flawed for 2013 with their current business model. Before we all wag a finger and say “well you could see that one coming”… well ok then.. but the real lesson is that plans need to be reviewed because the world changes. So what can we learn from HMV and others like them?

Certain of what you do?

Change is constant. If you run a business and you do not adapt to the marketplace (or create a new market) your days are certainly numbered. Technology as we all know has changed what is possible. It has happened to retailing, but it will (and does already) happen in most aspects of life. Technology leverages effort and the rewards for getting this right can be enormous. Getting technology wrong or failing to understand its implications can lead to ruin, just ask Kodak, Polaroid, Jessops, HMV… sense a theme? yet it isn’t just the obvious. Many are now viewing and trying goods on the high street, but then buying them online. Admittedly this is easier when products are identical, but of course the web does also help compare. Where I believe businesses like HMV and Kodak went wrong was not only to fail to identify the change quickly enough, but also to fail to understand what they do. Eh? Kodak make film, cameras, inks right… yes, but no. Kodak captured or recorded images, memories, moments – precisely how they did so was always going to alter. HMV sold records… well tapes, CDs…hold on calendars, DVDs, videos etc etc. What HMV actually sell is entertainment – sound and image, precisely how is almost a red herring.

The technology leverage

I cannot think of an example, where technology cannot alter the delivery of what is done. Certainly in my own field of financial services – technology has made a massive difference. When I started, policy documents were like ancient scrolls, eventually making way for typed documents yet today many are electronic documents. Still the same essential thing… but not if you are a copperplate writer. Financial planning is not about providing financial products. Anyone want one? no,  of course not. Financial planning is about solving the problem of maintaining or improving your lifestyle. So whilst there are changes in IFA land, many “advisers” still sell products thinking that this is the solution… you know the story… I want to retire at 65… oh, here’s a pension plan for you then. The truth is that pension plans are just savings plans with tax relief. They might be very good at building a pot of money, but then again, this is only one way of many options available. That’s why I believe that what I do is different. I focus on helping clients to think about their lifestyle and offer thoughts and questions about it and how it might alter if certain things happen, some obvious and some highly personal and unique. I’m sure that one day a computer will be able to perform most of my work for the mass market, but I very much doubt that it will pick up the body language, tone and expressions in a way that is meaningful. In other words the essence of being a person not a robot. Mind you, I’m sure some would prefer that robots did. I doubt that you are one of them.