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Ten driving forces of change.

In the 1990s, businesses and their leaders will rise or fall based on their ability to anticipate and creatively respond to rapid change.

While explosive technological change is the driver today, other changes must not be ignored. If not observed and acted on, these forces can spell and doom to a business. Or boom, if they are. In fact, this "spot a change, create a response" mindset will become the touchstone of survival for businesses in the '90s. What is required are not merely breakthroughs but constant improvements that add value in the customer's eyes. In short, businesses will gain the edge by out-innovating their competition in the following areas:

1. SPEED: Winning businesses eliminate customer waiting, whether in line, on hold or over time. Example: financial institutions will be forced to give instant mortgage loan approval, as Citicorp Mortgage already does. Retailers big and small will need to innovate ways of avoiding lines, even if it means more self-service. Ask: how can we reduce the elapsed time at every step of our operation? What systems/method changes must we make to facilitate speed of satisfaction?

2. CONVENIENCE: Domino's Pizza built its competitive edge on this imperative alone. Hardly a new concept, but one that must be reexamined in light of changing, more harried lifestyles. Examples include the trend toward 24 hour stock trading, real estate firms showing homes to video, special new services (shopping by computer, packaging services, etc.) for busy people. These are incremental improvements; larger gains will come from rethinking your entire operation in order to make your offerings more accessible, user-friendly, portable. Make doing business with you so easy that you create your own "Domino's effect".

3. AGE WAVES: The baby boom, baby bust and the graying of America present countless new opportunities for organizations that creatively respond to these demographic groups.

Imagine a motel designed so that the night clerk, instead of snoozing, launders sheets and towels in a high-tech washer/ dryer installed behind the desk. Rooms are designed to take less time to clean. Guests can use their own credit cards to unlock their doors.

Sound farfetched? It's the way Sleep Inns are built today to counter the growing "baby bust" labor shortage. It's one example of how smart companies can steal a march on competitors by exploiting demographics. Brainstorm: ways you can reduce the labor content while still providing the service your customers demand.

4. CHOICE: Increasingly sophisticated consumers demand more options and customized solutions in both products and services. Future-focused leaders will anticipate new choice demands before the rest of the pack. Choice Driving Force signals need for increased niching, targeted marketing to sub-groups (eg. "divorced moms aged 26-44", etc.), and passionate listening to customers so that your offerings reflect constantly evolving choice demands.

5. LIFESTYLE: Sales of McCormick spices were flat. Reason: working women (and men) prefer easy-to-prepare meals and use fewer spices, unsure of how. Innovative response: McCormick phased out its red and white tins, replacing them with plastic jars with freshness seals. The jars enable consumers to see the spices and check for signs of deterioration. Recipe cards displayed with the jars show the inexpert cook which spices to use on which dishes.

Question: how are changing American lifestyles affecting your customers? How can you profit by responding to changes in their work patterns, leisure pursuits, marital status, environmental and safety concerns?

6. DISCOUNTING: Look for price cutting to intensify even further, spreading to unlikely arenas such as real estate. Help-U-Sell, based in Salt Lake City, doesn't charge home-sellers commissions, but a negotiated "consulting fee". They hold the for-sale-by-owner's hand while letting client do more of the legwork. Result: Help-U-Sell is gaining market share in western states, further threatening the traditional industry.

Key question: What's your strategy with regard to discounting? What prevents you from leading the charge?

7. VALUE-ADDING: If you're not going to be the low price leader, you must add value - continuously. Four Seasons Hotels have a computer bank that stores information about each guest. Customer Smith prefers nonallergenic pillow, customer Jones likes a rare kind of tea. Unocal decides to go "high service" and wash windshields and provide clean restrooms for motorists under the slogan "we're still a service station"

Brainstorm: new ways to add value in your customers' eyes. Remember that the customer wants to know, "what have you done for me lately?"

8. CUSTOMER SERVICE: Excellent customer service for beleaguered American consumers is so rare that people will pay extra for it. But the real act of innovations is motivating excellence from employees even when the boss isn't looking. This is the real frontier for the 1990s and one smart leaders will devote create energy to promoting.

9. TECHNO-EDGE: Technology is advancing rapidly and will continue to do so. The future belongs to managers who embrace its possibilities rather than adopt on a catch-up basis. Example: Frito-Lay issued hand-held computers to its 10,000 person delivery force, saving countless hours on sales reports, ordering and invoices. Management can spot trouble spots faster and change marketing to correct problems.

Ask: what is our techno-edge? Be innovative in your use of technology. Look for: tools that increase speed, add convenience, raise productivity.

10. QUALITY: Just as service can build competitive advantage, so too can quality. Reason: there's so little of it. The button that pops off the new pair of slacks, the new car that has to be taken back to the dealer again and again are more than aggravations to today's harried consumers. Businesses from Rolex to H&R Block have profited from designing quality into their operations and exploiting it in their marketing.

Question: what is the most pressing area of your businesses where the customer perceives a lack of quality? Is it the overall appearance of your business? The type of products you sell? Quality as perceived by the customer will provide the edge. Unsure where to start? Ask your customers what they think of your quality.

The 1990s can be looked at as "business as usual." That's dangerous. The necessity is to proactively change with change, rather than reacting to change. Innovative thinking must take place at every level of the organization, in the way of the entire organization operates and in the way it views its customers, its competitors and change itself. The innovator's attitude is to welcome change instead of trying to resist it, to use it as a stepping stone, and to ride the wave by helping to shape the future.

Robert B. Tucker is an author and professional speaker based in Santa Barbara, California. He publishes a quarterly newsletter, Tucker on Innovation, and frequently keynotes major trade association and company meetings. Details (805) 682-1012.
COPYRIGHT 1991 Canadian Institute of Management
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:how business thrives on change
Author:Tucker, Robert B.
Publication:Canadian Manager
Date:Jun 22, 1991
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