“You cannot discover new oceans unless you have the courage to step away from the shore” – Nobel Prize-winning author André Gide.
I recently read an insightful article on why the focus of a company’s (agency’s) business strategy should not be upon its competitors. The article was written by Gabor George Burt, internationally recognized expert on innovation, creativity and strategy development and the author of the book, Slingshot.
Burt states, “In today’s marketplace, I would argue that doing something unprecedented is not just adventurous but imperative … eliminating competition by trying to beat it is dangerously shortsighted.”
Small to midsize ad agencies, for the most part, have been asleep at the wheel while our industry has been totally reshaped by The Great Recession, the transition from traditional marketing to digital and the rapid emergence of social media.
Burt provides a similar example of what happened to Kodak in 2003, when it was caught sleeping as the world transitioned from film to digital photography.
“The company severely misjudged the speed and impact of this transition and its lifestyle implications. As a result, Kodak’s core business, in which it was clearly dominating its competitors, was on a fast track to obsolescence.”
What were the consequences?
- After 74 years, Kodak was delisted from the Dow Jones Industrial 30 Index of leading American companies in 2004. Kodak then embarked on a radical and painful restructuring to reestablish its relevance.
- It had to cut 25,000 jobs.
- It posted 8 consecutive quarters of losses through the end of 2006, with a single quarterly loss of as much as $1 billion in 2005.
- Even though Kodak quickly became a leader in digital photography, it was not a sustainably profitable business.
Burt writes, “In simplified terms, the company’s core business shifted from being a monopoly to being a commodity in the blink of an eye, and it had to scramble to reinvent itself.”
Advice to Ad Agencies:
“…instead of trying to figure out how to beat competitors, smart strategy looks to change the rules of competition altogether.”
Difficult times can be a great time to separate your agency from the rest of the pack. In an economy where there are too many agencies that look, act and talk just the same now is the time to rethink long-held strategic assumptions inside your agency and challenge decades of conventional wisdom in our industry, and push to learn, grow, and innovate.
Here are some tips, to stimulate your thinking, on how to change the rules and break out of the pack:
- Change breeds opportunity. Don’t play by the rules, unlevel the playing field and redefine the rules of the competition. Be the first to find new opportunities. “With the unveiling of the iPad,” Burt writes, “the company symbolically stepped away from the familiar confines of the PC era, leaving behind its own initial core business along with the competition.”
- Don’t wait for other agencies to lead the way, be innovative. French novelist Marcel Proust said, “The real act of discovery consists not in finding new lands but in seeing with new eyes.”
- Break out of your comfort zone. Agencies have been comfortable in the middle of the road. But today, as William C. Taylor says, “the middle of the road is the road to ruin. The only thing in the middle of the road are yellow lines and dead armadillos.”
- Remember that training is critical to success. The larger agencies are now rising to meet the escalating demands for digital, most of them are now requiring that almost all of their employees develop digital skills.
- Stimulate creativity for ad agency new business. A lot of small to midsize ad agencies have chosen to take shelter during the recession, but that strategy doesn’t provide any creative stimulation for ad agency new business. Perhaps the better strategy would be to dramatically shift your agency’s thinking, spur innovation and enthusiasm by setting some challenging new business goals.
Click on the following link to read Burt’s article, Why You Should Stop Obsessing Over Your Competitors.
Additional articles that may be of interest: