There are fundamental constructs which define companies that run and then TRANSFORM their sectors. In this video, I explain. The reality is that succeeding as a business requires reinvention as customer needs evolve with time. Companies that transform are good at staying ahead of customer needs and perceptions; no matter what comes, they tend to be ready.
One company that has done that very well is Intuit, an American company that is known for selling tax software. A key attribute of Intuit is giving most things free. You can accuse the firm that it hates revenue. You see competitors building products and solutions on its platforms. But there is a catch: after a few years, the competitors become invisible. They become folded into Intuit business in the eyes of customers.
So, for decades, Intuit continues to swallow competitors without buying them. I have called its model the Fish Bait Acquisition Construct. It is a model where you give things free to competitors. As they come to enjoy the freebies, you trap them, and over time, they become weak. The end game is that at the end, they beg you to take over their assets.
Besides Intuit, Domino’s is also a reinvention machine. It is the best pizza business in the world, as far as execution and process innovation are concerned. That is the only pizza I eat. If you compare Domino’s with Pizza Hut, you will see two companies separated by miles in product quality and processes. There is no new innovation in the pizza business that did not evolve from Domino’s. Sure, I give Yum! Brands (owners of Taco Bell) high marks for the smile app which orders tacos for you simply by smiling to your phone. But Yum! is not known for selling pizzas.
Here in Nigeria, I give credit to Unilever for its capacity to weather the challenges in the home consumer goods. When P&G came, many thought Unilever Nigeria would fold. But despite the competition, it has been redesigning its business. Unlike PZ, Unilever remains a strong business in Nigeria. In the beverage sector, Star Larger Beer brand is also a reinvention engine. The biggest innovation in Star was not the taste (the people say, I do not drink alcohol) but the bottle. With the new bottle, Star solved a big problem: people bottling “33” and other Tier 2 beers with Star labels went out of business. It was so bad that despite most beer joints drinking Star, Nigerian Breweries Plc, the maker of Star, was not seeing any growth. Then, they changed the bottle and growth came. That was reinvention as they have used bottle to differentiate the category-king.
As you do the reinvention, consider these words from John Donahoe, CEO of ServiceNow.
“I believe that great, enduring companies are almost always driven by a clear sense of purpose. My simple model is that each company must answer the ‘what, how and why’ question. A sharp strategy addresses what customers we serve, what products we sell, and what business model we embrace. Execution plans address how we will deliver for our customers and shareholders. Purpose answers the ‘why’ question: why do we exist, why do we care, why should I work here? The most talented people want to work for a company with a clear sense of purpose. And companies that combine clarity of purpose with strong strategy and execution are able to win over time and have the biggest positive impact in the world.”