Society as we know it is rapidly evolving thanks to a deluge of innovation. We live in a world where drones could drop deliveries to our doors 30 minutes after we place our orders. At the same time, it’s incredible to think that the major communication channels of our time didn’t even exist 10 years ago.
New innovations are impacting us at a substantial rate, and businesses need to move swiftly to keep pace as the market evolves. Sometimes with these market changes, it’s not just enough to pivot. Sometimes it is necessary to undergo a core shift in services, acquire businesses that chart a new path forward, and even go so far as to lose your hard-earned brand equity.
As a CEO, I’ve been down this path a couple of times, leading two companies through significant rebrands. With this experience under my belt, I can confidently say that this is no small task. A rebrand, or any significant change for that matter, is not for the faint of heart.
This is one of the most important pieces of advice I’ve learned in my career. With market conditions rapidly changing, companies need to constantly be disrupting their industries to stay ahead of the competition. The factors that used to define a solid company–a strong reputation, accelerated year over year growth, having the best talent–are all fleeting in the competitive landscape of technology companies.
We’ve seen plenty of examples of companies that didn’t change fast enough. Blockbuster owned the video rental market and was on every corner, but it either didn’t see the writing on the wall or wasn’t able to innovate quickly enough, and the competition unseated them.
Its demise was directly linked to the success of Netflix and their first product: online rentals. By the time Blockbuster began offering online rentals, Netflix had already gained market share and improved its product to offer recommendations and an unlimited rental period. Blockbuster wasn’t quick enough to reinvent itself and it was too late to catch up. This is just one example that illustrates why you should change before you have to. Hindsight is 20-20, but a little bit of good foresight can be picture perfect and keep you from going blind in the future.
Making a change is easier said than done. It requires us to ask ourselves the basic questions of what needs to be done and how do we it?
1. Observe. The first way to determine the direction your company should take is through observation. During my first 30 days as ePrize’s (now HelloWorld) CEO, my sole focus was to observe the business. I arrived at the company knowing that the industry’s landscape was shifting and that we’d be facing more competition in digital promotions, our core business. I thought we’d move towards becoming a media firm, but after I sat in on meetings, dove into the company’s metrics and watched employees perform their daily tasks, I realized my original hunch had been dead wrong.
2. Listen. The second step is a simple progression from the first: after observing your employees, you need to talk to them and listen. I set up meetings with C-suite executives, members of the sales team, office managers, former employees, and clients. Anyone who was familiar with ePrize’s business could provide valuable insight into where the company had been and where it should go.
This is the same across all organizations and industries–CEOs and all leaders for that matter–need to get to know their employees in order to better understand the change they need to affect. After taking the first two steps, you’ll better understand what action you need to take. Start by implementing small changes, and continue to observe and listen as you make them.
3. Implement. After a three-month learning period, you’ll have a much better idea of the direction your company should take. I realized that ePrize’s strength was in connecting brands to consumers, and it didn’t make sense to turn ourselves into a media company if our strongest asset was customer engagement. I also understood that we had some ground to cover when it came to technology. Once you find your company’s identity, you’ll be able to create a plan for the future. For ePrize, this meant acquiring companies to expand our tech capabilities and grow our core expertise.
Change is never easy, but having a plan to follow will make the transition as seamless as possible. One of the most important things to remember when reinventing your company is to not let short-term gains distract you from a long-term goal.
When I was CEO of Q Interactive, I let a short-term gain impede my long-term vision for the company. We had multiple revenue streams, and our largest one was also our most volatile. I thought this revenue stream would eventually collapse, but it was growing so fast that we became addicted to it. I had a plan in place to pivot the company away from the volatility, but I chose not to pursue it because it would have required cutting off a lot of incoming cash. So instead, I led the company to make a half-hearted attempt towards a new market without jeopardizing the revenue stream that was our cash flow. In the end, that revenue stream did collapse.
By abandoning my long-term plan, I forced the company to make a change in a much more chaotic environment than we had anticipated. We didn’t proactively pivot, and though the company survived, we missed a great opportunity. Risk and business go hand-in-hand, but ceding to a short-term gain like that brought too much risk and not enough reward.
Making change is an important part of leading effectively. You’ll undoubtedly mess up, but it should be because you were trying to succeed, not because you were afraid to fail.
—Matt Wise is the CEO of HelloWorld (formerly ePrize), a rich engagement platform that allows brands to better interact with consumers. HelloWorld is based in Pleasant Ridge, Mich., just outside of Detroit.