Managing business in a disrupted world
Technology and market expectations are changing. How do you “future-proof” to stay ahead of the game?
In a world where the pace of change seems to accelerate by the day, many businesses are asking themselves how they can adapt to cope with changes in technology, generational thought and changes in the way we live.
It is not just the slow, organic natural changes that provide long-term challenges for businesses. It is also the more shock-like, disruptive, seismic shifts that manifest themselves across a time scale of a year, or sometimes just a matter of months.
We often hear the term “future proof”, but what does it really mean? The reality is, there is no way to guarantee protection from change or what may or may not happen in the future. Complexity of technology, shifting geopolitical situations and a myriad of other forces defy our ability to accurately anticipate what may lie ahead.
While there is no absolute remedy for future proofing a business, there are a lot of lessons to be learned from history and simply taking the time to look at “what if” situations that allow us to give thought to scenarios that may work best for us under different circumstances.
Shock of sudden change
There are no shortages of examples where technology has changed so rapidly that it has been difficult to adapt a business to cope with massive changes. Just a few high-profile examples in recent history include the change from camera film technology to digital image capture, MP3 and MP4 digital technology which displaced tape and video recordings, and the explosion of smart technology that has impacted manufacturers of mobile phone and other electronic goods.
Most retailers would not have given a thought until a decade ago that consumers would take up online shopping so enthusiastically at a rate that threatens the traditional retail shop-front model. While forward-thinking retailers saw the change approaching and have taken appropriate steps to adapt and change their businesses, others have had to scramble to play catch up, while others have gone out of business.
Other glaring examples are ride-sharing services around the world that have seriously challenged the traditional taxi industry. Even restaurants are not immune to the way they have to operate and cater for changing demands as the number of home delivery services continues to grow.
Whether it is a gradual change in consumer or business purchasing habits, or the rapid shock of a new technology on the existing order of business, we all need to be aware that the world does not stand still and whether we like it or not, we have to keep a lookout for changes that may affect how our business needs to operate.
The Internet, changes in technology, advances in materials and a myriad of other forces influence how we are going to live tomorrow. Electric cars are a reality and driverless vehicles are on the horizon, along with other forms of transport and general automation that will affect all of us at some time.
While these changes will be too much for some to handle, the other side of the coin is they will present exciting new business opportunities to those who see what’s coming, or at least think about it and have a ‘plan B’ ready to implement as the tide of change is poised to overtake us.
Traditional retail organisations, including banking, financial services, insurance and health providers, food and hardware, have all had to deal with an increasing level of disruption. All have needed to adapt to the way they operate and more importantly, how they fulfil their customers’ expectations.
It is not only products and technology that are changing; it is also the way that products are supported, and services provided in a manner that allows a business to find a niche to differentiate against a competitor.
Future proofing OPE
Outdoor power equipment is no exception when it comes to taking advantage of new materials, technologies and manufacturing techniques. In the same way that motor vehicles in the not too distant future will cease to operate on fossil fuel, outdoor power has rapidly gone down this path and in many ways, may be leading the charge in the use of battery power.
People want convenience and positively respond quickly to any product that provides that benefit. The advent of battery-powered appliances and tools holds great appeal for those who may not have the physical strength to start or handle fuel-powered appliances. Eliminating the need to store and handle fuel, lubricants and mixes is a great motivator for someone to trade in their old equipment on a product that will make their life easier.
Our ageing population means there are thousands of people who eagerly embrace new technology, enabling them to continue working in their gardens as part of an enjoyable retirement.
How can Australian OPE businesses adapt to future change?
Specialist retailers and equipment dealers need to plan for change that brings both challenges and new opportunities. While some of these businesses have recognised and taken steps to cope with change, many others have little idea of what may be coming and what to do when the time comes.
Speaking with Larry Blamer, Managing Director of STIHL Australia, it is clear there is a role to be played by manufacturers in helping their distributors adapt to disruptive changes.
He points out that most traditional power equipment dealers are mechanics, and this is what they know and understand, and gives them a feeling of empowerment in providing a service to the market.
“It’s worth looking at what happened to the car industry in the seventies when the arrival of electronic controls started the demise of the home mechanic”, he said.
“As the industry is selling more and more battery-powered products, today’s OPE dealers need to be able to diagnose electronics. They need the knowledge and capability to identify battery issues as well as the tool’s charger. If you are talking about future-proofing, that is where the effort needs to be directed.
“There is no doubt that OPE retailers are very hesitant, and even resistant to selling battery powered products because they fear loss of sales revenue from spark plugs, fuel mix, air filters and other parts.
Opportunities from diverse products
“Sure, the battery charger eliminates all these accessories and retailers are worried about loss of revenue from service and spare parts. While there is some validity in this argument, at the same time, at STIHL we continue to drive a wider product range and once a person is in the retail store and they own one tool in the range that has a common battery, customers will often return to buy another tool because they already have the battery, and the retailer will make their money that way.
“That’s what we are talking about in future-proofing our dealers. We need to make sure they are not afraid of the new technology. We need to help them embrace the new and be the place for people to come to get the latest technology. It’s an understandable fear of the unknown where reassurance is needed that their revenue will not be diminished as the market moves away from fossil fuel-powered products.
“We recognise we have to take the lead in helping our dealers. The first element in this process is conducting online training classes that are presented in modules of between 10 to 25 minutes each, that deal with and introduce specific topics.
“These are supported by quarterly webinars which are designed to introduce our new products. In Australia we have a team of eight specially trained staff who are constantly deployed from vehicles that travel the country. These people operate continually to help dealers to diagnose problems. They also conduct training seminars throughout the country.
“STIHL is impressing on its dealer network that they have huge resources at their disposal to give them the education and backup necessary to enable them to embrace the new technology to protect their businesses. We are offering our dealers a great opportunity to welcome new technology and give them the confidence not to resist.
“Maintaining a comprehensive team of trainers across Australia is no small investment on the part of STIHL. A high level of training ensures competency of distributors in telling the product story and is a significant investment in how the consumers of our products acquire confidence in the brand.
“We have around 60 to 80 centralised training locations throughout Australia where hands-on dealer education and training takes place and where dealers have the opportunity to ask questions and interact with the best training tools available. These training resources help make our dealers become confident and feel comfortable with the changes being faced by selling products that use the new technologies.
“In today’s competitive market it’s really important that leading brands are able to differentiate themselves from cheap, low-end brands that are purchased in a box from a shelf, with no dealer support. We are educating both our dealers and our customers to buy a premium product that will give them premium support throughout the lifetime of the product.
Batteries are easier
“In Australia, like most countries, we have an ageing population and battery powered tools are a lot easier to start and use compared with the old fuel-powered models that require effort to pull-start. This has meant that a lot more people – men and women – can continue to use these tools with considerable ease. We have seen increasing numbers of older women being able to handle their mowers and trimmers, where before the physical effort was a great challenge.
“Changes in market demand caused by issues such as the danger of using ladders have increased the awareness and demand for extended reach products, which are now becoming really popular and enable people to avoid the potential fall dangers associated with climbing ladders.”
While the move to battery-powered tools and appliances gathers pace, STIHL says it has a technology due for release this year that while the machine is running, battery or petrol, a process will measure and diagnose many of the machine functions. Also, when a customer brings their machine to a dealer for service or a problem, as soon as you go through the door, your machine connects to the dealer’s Bluetooth system.
Once connected via Bluetooth, the system downloads the owner’s name, product serial number, date of purchase, hours run, and reports any fault code – all as the customer walks in the door.
The future is your friend
Throughout history, technology disruption has caused challenges, opportunities and failures. In business, it is impossible to stand still and you either welcome the challenge of the new for your advantage or miss the bus.
Suppliers of major brands recognise the importance of dealers in the distribution chain and with the implementation of education programs, new and exciting products and the benefits of wireless connectivity, there is a bright future for those ready for the challenge.