Leverage an underused business tool
In part one of this series, I introduced the topic of change as a functional and strategic way to think about trends. For those who missed it, let’s do a quick review.
Because change is so fundamental to our physical reality, we don’t always consider the shifts and adaptations we make day to day, even when those changes will ultimately have a huge impact on us. We tend to get caught up in trends — big splashy events or products. Contrary to that habit of mind, I believe business needs to think about change and the culture in a new light.
We consider change when we look back in time, or when we live through a global event like the economic meltdown of 2008. Sometimes, we only notice change when we’re touched by it personally in some major way, like a new baby, the loss of a job, or the move to a new city.
For the most part, though, we don’t think much about change. Sometimes we don’t want to think about it — especially for our business — because it’s ephemeral and transitory. In the moment, it’s hard to pin down, understand, and decide if it has any meaning for us.
Ignore change at your peril
Why think about change, and how big changes come about? Change is a critical data — an indicator of something meaningful. In practical terms, recognizing change can mean life and death for a business. Change happens and businesses thrive or die. And for some enterprises, it’s a slow, painful death. The innovation graveyard is littered with big brands that failed to pay attention to the culture and didn’t adequately respond to change.
How did legendary brands like Kodak miss the change coming right at them? The pace of change is clouding our vision. In modern life, the pace of change can be obscured by how connected we now are. A hyper-speed culture has turned into a crisis of living.
Leveraging an Underused Business Tool
Many organizations focus on change management — how to respond once change has happened in the culture or been determined for an organization. But for researchers, product developers and insights professionals, there’s a more important idea to focus on — change recognition. It is an under-appreciated business skill, a warning sign. Change recognition focuses on the customer, the culture and on external markets offering early hints about how the shifting world influences your enterprise.
Fix How You Look at Change
To avoid being swamped by a cultural wave and to form a robust, forward-looking POV, you’ll need to build new institutional awarenesses and flex a fresh analytic muscle; one that takes into account broader cultural perspectives.
How do you do it? The example below focuses on retail to illustrate the complexity and dynamics of change and gives specific attention to the shifts in adjacent areas that led to what we now know has changed in this massively vital industry.
Retail: Bricks v Clicks
Retail is a category in full-tilt turmoil right now. Where are the bricks going to fall? The past’s changes will show a surprising turn of events.
Main street. The beating heart of American communities (Photo by chuttersnap on Unsplash)
Main Street. For decades, Main Street was the beating heart of American communities. Small business and retail thrived.
Malls and Big Boxes. The advent of shopping malls in 1956 began to drain the life from main street over the next 50 years. Then Big Boxes dominated retail, delivering a near-fatal blow to Main Street shops.
Ecommerce. The impact of ecommerce, launched in the early 2000s, is still reverberating across the retail aisles. The might of Amazon is now pushing once-powerful big boxes to the edge: Macy’s, JC Penney’s, Sears and K-mart and Aeropostale are clinging to life.
The changing retail landscape has been devastating. (Photo by Carla Januska)
Zombie Malls The effect of the changing retail landscape on malls has been devastating.
“Between 20% and 25% of the nation’s shopping malls will close in the next five years.” – Credit Suisse, LATimes 6.1.17
Developers are having to get creative about how to utilize those spaces; they’re now pulling in doctor’s offices, condos, schools, sports facilities and even grocery stores.
“The Natick Mall outside of Boston will welcome a Wegmans supermarket in 2018, taking over the space that formerly was a JCPenney. In Ohio, Kroger plans to build a new store on the site of a former Macy’s at the Kingsdale Shopping Center.” –The Wall Street Journal 3.7.17
New bricks Some ecommerce success stories are opening retail stores to add a high-touch element that ecommerce can’t deliver. Warby Parker, which is now worth more than $1 billion, currently has 46 retail locations in the U.S and plans to open 25 more this year. – Inc. 1.25.17
Bonobos, originally a “digital only” brand opened “guide shops” to accelerate sales. –New York Times 11.11.16
Even Amazon has, in addition to acquiring Whole Foods, opened a handful of its own physical bookstores, and is taking the very notion of shopping in a new direction with Amazon Go, the AI, sensor-based concept that lets you walk in, grab what you want and walk back out.
The Alibaba Singles Day global event clocked in at $25 billion, demonstrating the power of savvy technology strategy to expand operations and improve efficiencies throughout the supply chain from large distributors to SMEs creating a huge playing field.
AI, VR and More Technology will continue to alter in store and online shopping experiences as AI, VR and AR make suggestions for us, automate repetitive transactions, and create fun, informative and immersive experiences.
What we can learn from change
The retail category is far from settled, and given the current pace of change be really tough for long-time players to weather. Population growth, a booming economy, ecommerce, mobile shopping, and a digital generation all set the stage for a major shift in retail.
But never bet against the elements central to the human condition. Just like the fear that journalists would disappear or we would no longer read real books. Retail, like other businesses in flux, is making its way back by satisfying core consumer values of service, community, trust, and what it takes to grow and succeed.
5 Building Blocks of Change
It is often tough to focus on and make sense of the signals of change, but if you stay alert and change how you think about change, you won’t be caught off guard. Below are five ways to think about change for your business and your clients:
1. History:
Use your knowledge of the past – attitudes, industry trends and failed products – as a foundational look at how your industry has ALREADY changed, and to evaluate the weak spots and areas ripe for innovation.
2. Culture is Context
Change doesn’t happen in a vacuum. Nothing — brands, dictators, pop stars, societies – comes into being on its own. Culture reflects nature in this way — we live in a dynamic system where each part exists in relation to the other parts. Looks for those influences and ask what the culture is calling forth from your industry.
3. Don’t Shrug Off The Obvious
Change comes from everywhere and anywhere: chaos, collapse, growth, innovation, randomness, institutional, individual, revolutionary, evolutionary. Change doesn’t have to come at you head on to swallow your business.
4. Big change starts off invisible
Watch the fringes, the early radar, the wacky innovations. Customer suggestions and complaints, no matter how wild, are signals of coming change. Be open and ready to put the pieces together.
5. Values.
Watch for consumer drift. When consumer values aren’t being met, they migrate to something that better meets their needs.
How do you start?
Here are four steps to start the process of better seeing change.
Start a conversation. Set aside time for your team to step outside the cycle you are in and talk about what you’re seeing in the culture and how it might change your business
Go to school on your industry. Examine and research how your line of work has changed over time for a meaningful foundation from which to see change. Go back 25, 50 or 100 years to really understand how the forces of change brought you to today.
See change as a natural process. Don’t judge. Just pay attention to shifts. Remember to learn and observe first, then decide what actions to take.
Leverage your planners, researchers and analysts. If you have these people in your business or in your extended orbit, make the most of them. These are the people already equipped with the skills to watch for change.