CHANGING THE RULES OF THE GAME

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It’s everywhere. Look around – technology is changing, customers are changing, companies are changing, values are changing, so much so even the climate is changing. As John F. Kennedy said: “Change is law of life and those who look only to the past or present are certain to miss the future”. Yes, change is everywhere.

General Motors (GM) is back. From bowing out in 2008 and moving towards a 2009 bankruptcy reorganisation, the company is planning to advertise in the Super Bowl, the most expensive event to advertise in, in February. GM is now ready with its new ad campaign and a new tagline for the Cadillac which says, “The new standard for the world”. From down-and-out to up-and-about! What a change!

Gadgets have changed. Just look at the iPad and see what it has done to business. Not just have they changed the computer business, but have shown different businesses like Media, Advertising, Gaming etc, how to do business better! If you thought iPads and iPods were the only ones that got thinner this year, think again. If you thought “limited-editions” were for designer clothes, watches, cars etc, think again. Huggies launched limited-edition, denim-style diapers in May this year. The new, thinner and fashionable jean diapers sent moms into a tizzy. Everyone wanted one for their tiny tot. Its tagline “The coolest you’ll look pooping your pants” brought the smiles and laughs and big bucks too for the company. This change in design helped Huggies beat P&G and get back just about all the market share it had lost when P&G launched Pampers Dry Max. It was P&G’s biggest innovation in 25 years and it lost when Huggies changed.

Change is powerful! Keeping pace with it is the key. Earlier, social activism meant protest marches, and even giving up your life. Today it’s as simple as hitting the “Like” button on the Facebook!

In fact, Facebook has changed the world. A recent survey showed how people have reduced the practice of sending e-mails and text messages. They now Facebook! Hotmail is no more Hot!

What’s “Hot” is farming online! While you were busy buying seeds, farm animals and body armour, a company racked in $500 million almost entirely by selling virtual goods on its game sites like Farmville etc! Talk of “change”, selling could not have changed more. Whoever thought selling ‘virtually’ nothing could be so lucrative! Zynga is the company that has 240 million users playing Farmville, Mafia Wars and now Frontier Ville. Not surprising that on June 27, Disney acquired Playdom for $563 million plus $200 million as incentives. It too wants to get into this new gaming business. Brands like MTV and Google are trying to grab this virtual land too. For now, virtual goods are more powerful than the real ones! Those selling virtual goods are making more money than ones who are slogging it out in the factories.

While Zynga promises to change the world too, through games by selling virtual social goods that have benefited earthquake victims, children in Haiti etc, there is one game that people didn’t like being changed. Early this year when Mattle changed the rules of the game Scrabble, for the first time in 62 years, to allow proper nouns like “Shakira” as playable words, a lot of serious players got offended. While change is important, it’s important to know what not to change too!

WHY SOME THINGS SHOULD NOT CHANGE

There are some principles that are timeless! There are some “Core Values” that define you and give a meaning to things around. People and companies that have believed in not changing this have succeeded. At HP, their core value is “respect for individual. Bill & Packard turned down big government contracts that would have forced them to adopt the “hire & fire” strategy. Disney changed, from cartoons to feature films, to videos, to Disneyland, but never forgot “wholesome entertainment for family” as its core value.

When you know what not to change, that’s when you change best!

WHY SOME THINGS JUST HAVE TO CHANGE

Business, once used to be all about finding and honing your competitive advantage. Today it’s about the ability to find your “next” advantage, which is important. If you want to survive, you need to “create” your future moves. It’s much similar to the way the “high jump” event changed over the years at the Olympics. Earlier, all high-jumpers used the “scissors style”, similar to jumping hurdles, and for years people tried to better & better this technique. Then one day someone found a better way to jump higher. Instead of jumping like hurdles, you now launched & landed on the same foot called the “Western Roll”. For 25 years athletes mastered this. Then in 1968, Dick Fosbury, a former gymnast broke the Olympic Record by three inches when he discovered a totally new way of jumping and showed the world how “creating” new techniques could leave competition far behind. This new technique became famous as the “Fosbury Flop”. While everyone was jumping with their feet first touching the ground, Fosbury landed on his head and shoulders and jumped higher than 2.3 meters. A feat that would have been impossible to achieve with the older techniques!

Today, becoming the best is also not enough. Beating competition is not enough. You need to not just beat, but defeat competition in such a manner that they find it impossible to compete with you. You change the rules such that you stand totally apart. With a zillion similar brands popping up everywhere, you need to “change” to stand apart. As Kim and Mauborgne of Blue Ocean strategy said, “by just beating competition you remain in the ‘red-waters’, but when you create a new game, competition becomes irrelevant and you move to blue waters.”

When people did not want to buy entire CDs, iTunes gave them the option of buying a song, that too, very reasonably priced. While all low-priced watch manufacturers talked of functionality, in came “Swatch” and showed how low-price could be stylish and took away all the market share. While the world thought that music stores should sell – well, music, in came Virgin with its megastores which stocked CDs, videos, games, stereo and audio equipments and changed the rules. Barnes & Noble decided that a bookshop was not just meant to sell books, but help customers cherish the pleasures of reading. It added lounges, coffee bars etc, and changed the way bookshops of the future would look and the future of their balance sheets too! While most cosmetic companies played on the emotions of consumers and showed beautiful images, Body Shop talked facts. It talked about its ingredients and their benefi ts. Soon, natural cosmetics became the rage. All these companies changed the way business used to be done and created their own blue waters which competitors could not reach fast.

It’s important to remember not to forget to change, especially when you are growing. Growth gives satisfaction and that’s no good. As Katsuaki Watanabe, the President of Toyota Motor Co. once said: “Everyone should be dissatisfi ed, with the present situation.” Don’t be satisfy ed with the status quo, even if you are the best. Don’t be afraid to change. Change is always good.

Even a thing like “Climate change” is good. In June, Guyana’s President Bharrat Jagdeo said, “Climate change is good business for us,” thus embarrassing the UN, which in April awarded him the “Champions of the Earth” award! But maybe he had a point. Climate change has opened up a plethora of new businesses – from trading of carbon credits to green energy to alternative energy and many more...

Your success in life isn’t based on your ability to simply change. It is based on your ability to change faster than your competition, customers and business.

Change is unavoidable. Change is the norm. We at 4Ps B&M have changed too. Our promise to never change our “core value” of delivering you world-class content however doesn’t change. We hope you enjoy the change. Change, can change the rules of the game. Go ahead… change something too!!!

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