Businesses often assume their business model will survive for ever.
But the salutary story of the troubles of one of the UK’s four largest grocery chains, Morrisons, demonstrates the drawbacks of a failure to reinvent themselves. The company’s profits halved in 2014.
Chairman Andrew Higginson this week admitted in an interview that the company that started as a market stall more than 100 years ago had lost its way. They were certainly later than the other main supermarkets with their online shopping initiatives.
“Morrisons doesn’t know what it wants to be……one minute it’s trying to be Waitrose, the next minute a discounter. You’ve got to stick with your core principles……” said the company’s former property director, Roger Owen, who retired in 2009.
The lessons, however, apply to many businesses and organisations, not only those in the admittedly challenging grocery sector.
The UK’s libraries have also been in decline, partly as a result of austerity cuts to public sector budgets but also because of the changing requirements of users. Technological innovations like the internet have made it easier to access information online as well as firms like Amazon making it easy to browse for books to buy second hand. Some have reinvented themselves and continued to thrive by adopting a different operating model. New initiatives include: providing access to the internet; courses; paid-for research; organising events; hosting clubs, even book clubs.
There is a lesson here for business. The older you are the easier it is to get set in your ways and to miss the threats of the new young “upstarts” snapping at your heels.
The answer? Yes, keep a close eye on developments in your sector and on the competition, and regularly review your core values, structure and business plan.
But more important, much more important, is to keep an eye on your customers and what they want.