One of the things that frustrate me the most is inefficiency. We’re in Q4 of 2018 right now, but a lot of business owners seem to still live in the 90s.
I’m speaking for both here and abroad. So it’s not that the Philippines is behind on technology adaptation. The problem is that of the people running the business.
I am reading this book about the history of businesses and I got reminded of this quote again:
There are no business problems, only people problems.
Failure to adapt is a sure-fire way to kill your business.
Just think about it, if everyone else is moving forward and you stay still, you’d get left behind.
Below are a few myths and tips you need to know in order to survive in today’s business environment.
Don’t fix what’s not broken
Earlier this week, I wrote about planning for the future, one of the things that business owners need to overcome is taking no action when everything seems to be working just fine.
Don’t fix what’s not broken.
While that may be true now, that won’t be true in the next couple of years. The world doesn’t stand still. And it won’t wait for you to catch up.
I have one client who refuses to invest in a modern infrastructure. One that is a necessity in today’s business environment. One that is already a given.
After all, they have been doing what they are doing for more than decade.
Don’t fix what’s not broken, right?
Then, something happened.
This year, the months that had the highest sales for the past few years plummeted down to ~50%.
A sudden technological change from Google and Facebook brought about the immediate cause of the decline in sales.
But if you look further back, it’s the failure to modernize whatever was necessary when things were going ok.
Now, we’re scrambling to update and upgrade everything so we can stay relevant. So we can get back to where we were before.
As a consultant, it frustrates me because I know I could have done something to avoid this scenario. But I wasn’t able to convince the owner to work on it soon enough.
Always be changing
The only way to ensure your business stays in business is to always adapt to change. Don’t change for change’s sake; rather, continue adapting to the needs of your customers.
One of the things that makes the big brands we’re familiar with so successful is the careful application planned obsolescence.
From the consumer perspective, planned obsolescence has a negative connotation.
It goes like this:
This company is producing products that break down quickly or needs to be replaced frequently. It has low quality.
But, looking at it from another perspective, planned obsolescence may be the only way to keep your business alive.
Let me explain.
If your strategy is to build inferior / so-so products to make a quick buck, you won’t last long. As economists will tell you, the market is efficient. It will adjust and self-correct.
So if you’re trying to increase your demand by making products that will break down faster than its normal lifecycle, the market will stop supporting you.
What I’m referring to in planned obsolescence, and one that is often taken out of context by a lot of people, is to continuously make your existing products look inferior to your new products.
Develop new products so good that customers would want to buy the new ones instead of keeping the old one.
It’s not that you created poor quality products before; rather, you strived so hard to produce something better that the old one.
In other words, it’s all about innovation.
Innovate or die
This phrase often comes up when a huge brand loses its luster. Most often, this is in the tech industry.
But what about the industries like those falling under services? Construction? Delivery? Infrastructure? Agriculture?
All these industries aren’t getting that much attention primarily because there’s not much innovation happening in them.
And that makes them very appealing to entrepreneurs.
Are you familiar with Revolution Precrafted, the first Philippine-based unicorn startup? They are in the housing industry. But they succeeded in innovating in an industry where not much has changed for a long time. They found a niche in the market where they can earn profitably at 30% margins when industry averages is at 6%.
Read this interview last June with the founder, Robbie Antonio to learn more about what’s happening with the company.
There’s a lot of opportunities in every market and in every industry. You just have to know where and how to look for it.
These kinds of posts – strategy, economics, management – will be the focus of my future articles.
Let me know what you think in the comments below! 👇