So yet another traditional high street brand is in perilous trouble. And therein lies the problem folks… traditional thinking. You see HMV were a huge brand, they were making tonnes of money, and then along came these things called “the connected customer”, “innovative startups”, and “technology”. The three combined can destroy even the biggest of businesses.
It’s a traditional business tactic to think you’re the big-boy that can survive on size and history alone…just ask the guys/gals on the top of the tree (before it was ripped down) at Kodak, Woolworths, Blockbuster, Comet and Jessops…you know, if they’re not hiding in some dark room praying the embarrassment goes away. (It won’t. #justsaying)
No, you see we only have one option, whether we’re a small startup or large global brand we can only do one thing to survive and succeed: learn to adapt, constantly.
Or as former General Electric CEO Jack Welch said, “Change before you have to.”
The biggest change you can make is in your mindset as a business owner. You must become a human leader, not a machine manager.
Related Resources from B2C
» Free Webcast: Build Better Products by Identifying and Validating Your Riskiest Assumptions
Soft Metrics Are Awesome
Traditional business sticks its nose up at so-called “soft metrics” such as customer and employee happiness. NEWSFLASH: they are your two greatest assets!! Without a happy and fulfilled employee your customer gets a bad service/experience, and therefore becomes an unhappy customer that doesn’t buy from you…oh yeah, and in the socially connected economy they also tell the world how bad your service is too. How does your sales and revenue figure look now Mr Corner-Office-Balance-Sheet?
Do you know how happy your customers and employees are?
Measurement tactics such as the Net Promoter Score, are a much better metric of success (both short term and long term) than 99% of the traditional measurement methods. Also, you cannot predict success without first knowing where you are, and what state you are in. Past data, such as those found on the balance sheet, are often lies in real time.
Not speaking to and understanding customers and employees meant that HMV bosses were not up to date with the biggest consumer trend in history… the Internet. More to the point, newcomers such as Apple iTunes. I wonder how many HMV employees actually used HMV over services such as iTunes and Netflix? I mean seriously HMV, you were paying the biggest warning signs your business ever had!!
- For the next two weeks stop chasing new sales. Instead, you, the boss, must contact 50% of your customers (with staff delegated to contact the rest) to talk to them. Ask them about their fears, needs, concerns, interests, loves etc and carry out a NPS survey.
- Repeat this process with your employees, suppliers, and other business partners.
Actually get to know the people that make or give you money on a human level! After all, they are humans.
Do you “run your business well”?
Let me guess, you’re constantly working ON your business like the good Business Coach tells you to? You’re always improving your “business management” etc. Yeah?
STOP! YOUR BUSINESS IS SLOWLY DETERIORATING.
From this moment on you need to stop controlling your business. One of the reasons that HMV has failed is because it’s bosses were managers, not leaders. All the perfect processes in the world couldn’t save HMV or Blockbuster, you why do you think it’ll be any difference for your business?
Peter Drucker said it best:
Management is doing things right. Leadership is doing the right things.
We live in a business economy where “the right things” (those taught at business schools) have put some of our biggest names in danger – imagine what they’re doing to small businesses. Doing the right things varies based on your business, but generally there are a few aspects that remain constant:
- Attract good people. Attract and hire people with the right attitude…not necessarily the required skills, as these can be trained. Attitude rarely can.
- Purpose. People with the right attitude act when they care. The greatest motivation for employee’s to care is a shared common purpose. Purpose rather than demands and tasks ignite passion.
- Principles. What do you stand for? Principles are a human trait. They allow us to get to know each other on a higher level, and adjust our trust and affection in each other accordingly. If employees understand and share your (the business) principles they are much better placed to achieve the desired results quicker and better, because they won’t have to ask every time and decision or action needs to be made.
- Trust. Like principles, Trust is a human trait. Trust can only be built through relationships. And relationships are social things. Therefore you must allow your employees the freedom to be social, to communicate with one another at every possible opportunity. Companies like Google and Amazon have built their entire empires on this fact. Also, you hired your employees. So give them the trust and freedom to do their job using their best judgement. They are on the front line more than you, so trust me, they know what is best for each individual customer more than you.
Where HMV went wrong is that they forgot their purpose; it became about profits. Profits are a result, never a purpose. The gaps between each level of the hierarchy became too big (p.s. hierarchies kill businesses – dismantle them now), thus the entire business wasn’t singing of the same hymn sheet. HMV store managers and top bosses didn’t trust their staff. How many times did you hear, “I’ll have to ask the manager”? Too many it seems.
And remember, you are only leader when people follow you, trust you, and are inspired and motivated by you on a continual basis.
So what are your thoughts? Why do you think brands like HMV are failing?