“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.”
These days it seems we learn of more customer facing companies in difficulty every day; and I see lots of discussion about can they or will they be saved?
In the UK the recent list of companies falling into administration includes a lot of household name retailers like Comet, Clintons, JJB Sports, Peacocks, Game, HMV and Blockbuster. Retail week in April 2013 detailed how the biggest retail administrations leave creditors with £1bn of unsecured debt.
I understand when people question if a business can be saved when it goes into administration with all the uncertainty for their employees and customers and the question about a process of sale or wind-down that has a finite time to run. I am a little more confused when that question is asked of ongoing concerns or post administration as Philip Beeching has done recently when he posed can Hilco save HMV?
I’m not sure I agree with the concept of ‘saving a business’ rather just simply ‘running it’. If the answer to the question “Can we save a business?” is ever “yes”, then what have we saved it from and for how long is it safe? I don’t think any business is safe in the sense that it is ever free from harm or risk, financial ruin, aggressive competition or unhappy customers. In some sense every business needs to save itself every day.
Take Apple. After their first 20 years they were in serious financial difficulty, their product line in 1997 was a disaster, their customers leaving them, they even got a hand out from Microsoft. Few thought they could hang on; and even with Steve Jobs return in that same year (also the year of the first MP3 player on the market) the iPod was still 4 years away and iTunes 6 long years away. I’m sure it was a hard road back to success, as their share price over those years suggests. The first six years after Steve returned saw share price never get above $8 (split adjusted), today it is $390. And Apple didn’t invent the MP3 format or the digital music player but well done to them in taking other’s ideas and making a lot of money out of doing it better.
I think most people consider Apple safe. Safe to work for and safe to buy products from. However, do Apple have a patent on innovation? I don’t think so. Is it likely one day someone will think of something better than they can and do it faster and cheaper? History tells us that’s almost always the case. Could they be in trouble again in 20 years? Are they really safe? Why would we think so? Remember Motorola? They had 20% of the global mobile phone market and were growing rapidly when in a single quarter in 1997 they announced losses of $1.2bn, then came over 7000 redundancies and most of their talented workforce running off like rats from a sinking ship. Their party was over, eventually they were swallowed by Google and their global share sits around 2% today.
The point I am trying to make is that rather than ask can our business be saved, perhaps it’s better to ask are we saving our business today?
Success is driven by always looking to do it better for your customers. Smarter, cheaper, quicker. If you don’t think like that tomorrow, someone else definitely will. No business can afford to forget it. We see examples of those that do forget, and those that can come back from the brink by refocussing on it. Safety is an illusion, one that successful companies and successful people will never feel they can rely on.