We have so far received plenty enough questions concerning reinvention cycles, about that idea we share about the speed of change and how it has all fastened considerably in the 21st century in contrast to the previous century.
If it took an average business to go through the cycle from birth to death in 75 years, today, the average business model survives from seven to ten years, with a portion of businesses not really surviving more than one year.
Then, how come we have businesses, products, companies, that have been around for years, some even more than hundred years. The important remark here, we are not talking about a company or a product, but about the business model. What does it mean?
We might have exact same products produced in a company for decades and you know these products, Coca-Cola is one famous example; it retains the same formulation we had it for a long period of time. When Coca-Cola tried to bring about a new formulation, it was resisted and well then, the company brought back the classic Coke.
A product alone can be around much more than five or ten years as you might easily guess. The thing is, it’s not quite that the product needs to change, but the business model itself, the entire combination of different elements that allow us to create value.
Parts of the business model are about the product, some of them are concerned about the process, the logistics or organization, and others allowed finance structure, managed people policies, so on and so forth. All of those things comply together relationships with customers, or with suppliers, de facto making up a business model.
You might have a product that chemically and physically is exactly the same as you have produced it in the last 60 or 70 years, but the difference may be that today you are no longer making any money with this product. Which is why you need to rethink some elements and reinvent your approach to this product.
We are not necessarily talking about product reinvention – there are plentiful of directions where we can head the talk from this point on. One of which leads us to the story of Philips.
Philips has done a wonderful job reinventing itself, going cycle after a cycle, and introducing new and different products. Just recall where Philips was at the end of the 1990s and early 2000s – what was it that we knew about Philips? Their number one product back in 1999 or 2000 was TV. Philips produced and provided excellent quality TVs – it was the best quality of the image on the market.
The problem is that while technology professionals understood that, the average consumer did not. Back in the same time instance – the 1990s and early 2000s, the number one brand in the eye of the consumer was Sony. Why so?
Sony understood very well how to communicate with the consumer, and Philips really tried to reinvent at that point, to figure out a different way to position themselves, reinvent their marketing messages and marketing approaches to customers. Still, it couldn’t get to number one.
Therefore, Philips went from TV production and started a new cycle, remember the home wellness, the lighting efforts. Until it finally came to a different realization: they went back to what they know the best and that is quality of image. However, this time, they found a new customer base, a new area and new market, where the quality of image was of crucial importance while consumer marketing was not.
That’s where Philips is excelling today – that is medical equipment: X-ray, cat scans, MRIs. All of those new machines of today, such as mobile scanning technologies, ultrasounds or else, require exceptional quality of the image. The ones which Philips produces, count as per the best worldwide.
This is the part of reinvention that matters, taking the best of what you do, (as the quality of image is in the case of Philips), but finding a new and better way of using it. Of course, Philips did not stop there – their next move was all about software. No surprises as for the future is in software and IT, because the quality of an image is the quality of pixel information, and that’s where Philips knows the best.
When we talk about reinvention, we talk about the reinvention of business model, not necessarily the reinvention of a product or service. Or, if we talk about personal reinvention, that doesn’t mean to abandon who you are, your former experience, career, or education. Even take communities for example, like the one of Detroit which was considered as one of the most impoverished in the United States, but found strengths to take essential reinvention steps ahead.
All the talk about reinvention is rather a suggestion to find the essence, the best of what has been there already, and then, applying it to a new and exciting way, leaving everything that no longer serves you behind.
Share your top reinvention stories from your experience here
Last but not least, we would love to hear from you – your reinvention stories, regardless if the story concerns a big corporate reinvention story, a small business, start-up reinventing story, personal one. We look after hearing stories of finding a new and better way of being in this world.
P.S. The world is in desperate need of reinvention, and we don’t do it, then who will do it. To arm yourself with more knowledge, check one more of our featured video+blog!