Of course, the recent Covid-19 crisis has made people re-think their business. But there’s one fundamental mistake I’m seeing a lot at the moment (and which government appears to have bought into too).
It’s what I call the “let’s get things back to the way they used to be” approach.
That rarely works because the world moves on remarkably quickly, leaving business owners who won’t adapt (or perhaps can’t adapt…my heart goes out to you if you run a pub, for example) high and dry.
Most often, it’s because businesses get so absorbed in their “how” they forget their customers’ “what”.
This isn’t just for 2020. It’s happened again and again throughout business history.
For example, in the early years of the 20th Century, all the US railroad companies…the predominant form of cross-country transportation at the time…were approached by a range of “upstart entrepreneurs” to invest in their new automobile manufacturing operation or their recently-formed transcontinental airline.
The railroad companies turned them all down “because we’re a railroad company”. What they forgot was that being a railroad company was a “how”…it’s how people moved across the country, not the “what”.
The “what” for their customers was getting to their destination, not the precise method by which they got there.
So when the airlines could fly across the US in eight hours instead of a four or five day train journey, people who valued their time flew instead of taking the train.
For people who wanted to travel on their own schedule, make stops along the way, or divert off-course to visit relatives, the car was an attractive alternative.
Things never went back to “the way they used to be” for the US railroad business.
Their premium customers flew. Their budget-conscious or more independent-minded customers drove. Ultimately, there weren’t enough travellers left to cover the huge fixed costs of operating a passenger railway and, outside commuter lines serving some big cities, railroads virtually disappeared as a way for people to travel around the US.
Why are events of 100 years ago relevant today?
That’s because, just like those railroad companies, people who are desperate, for understandable reasons from their perspective, for things to go back to the way they used to be, are likely to be very disappointed.
City centre commercial landlords, for example, are in the vanguard of the “everyone needs to get back to the office” movement at the moment.
Unfortunately for them, the sort of businesses which which rent city centre office space have spent six months discovering that Zoom and occasional office visits for client meetings works just as well as piling everybody into a central physical location. What’s more, they can save six-figure sums every year by dramatically downsizing the amount of swanky city centre office space they lease.
At the next break clause in their lease, or after whatever notice to exit they have to give, no sane business which pays six-figures in city centre office rents is going back to “they way things used to be” any time soon.
Commercial landlords have become so wrapped up in the particular “how” they profit from (ie getting people physically together in the middle of cities to conduct business), they’ve forgotten their customers’ “what” (ie businesses just want to get the work done, bill clients and make a profit – if they can do a lot of that remotely and save a fortune on rent at the same time, they’ll bank that saving at the first opportunity).
Whatever challenges your business faces at the moment, you’re more likely to survive and thrive by re-orientating your business round your clients’ “what” and attach a lot less importance to your “how”…the particular way you help them do that at the moment.
Don’t end up like the American passenger railroads and get edged out by someone else providing a better or at least “close enough” end-result for your customers, more attuned to their specific needs.
If 2020 has taught us anything it’s that there’s always another “how”…another way to get things done.
Focus on your customers’ “what” instead. If the US railroads had done that 100 years ago, today we’d be driving around in Union Pacific automobiles and flying coast-to-coast on Atchison, Topeka and Santa Fe Airlines.