By Bill Scott, President, StoreReport LLC
Nothing Surprises Me Anymore
While doing research on convenience store robberies, I ran across a YouTube video that provides tips for convenience store robbers. Surprised? After watching this video, I realized how our preconceived notions serve to protect us from the real world at a cost of our own peril.
Making a plan and blindly following it to its conclusion is crippling small retailers today. There are major changes coming about all the time, and we are simply not paying attention. It’s like walking through a mine field without getting blown up, with the number of mines per-square-mile having more to do with our success than our overall plan for reaching our destination safely. It’s not luck. It’s simply the ‘law of probability.’ As the threats increase, the laws of probability for failure increase.
You really don’t need to be an expert to know that the danger of sudden death (in business) is greater than it’s ever been. I run across retail store operators all the time who worry more about staying alive than they do about becoming successful.
At the point where retailers become aware of a sharp reduction in business,
it’s usually too late to turn the business around.
The next step is usually panic, and heroic attempts to stop the bleeding… layoffs, downsizing, cutting back on purchases, salaries… which all result in lowering customer service.
In some cases, the ‘Peter Principal’ raises its ugly head. The business has merely risen to the level of its incompetence. We often encounter the Peter Principal in start-ups when a retailer tries to grow too fast, or when a retailer opens its nth store and the business structure is no longer capable of managing the business. But, more often than not, the antagonist in our story is our tendency to maintain the status quo—reaching one’s comfort level and struggling to remain in the same spot forever.
In the 40s, my father opened a small electronics business to service radios and pin-ball machines. Later, he began selling and servicing televisions, becoming the first television sales store in Jackson, Miss. He was the beneficiary of, and ultimately the victim of technology. The life span of his business was nearly 40 years. If he had attempted to open his business in the 80s, he would have been swatted down like a pesky fly.
In 1999, Andy Grove, the chairman if Intel said, “Within five years, all companies will be Internet companies, or they won’t be companies at all.” {Source: The Economist}.
Professor Richard Foster of Yale University noted that from the years 1958 to 2012, the life expectancy of businesses has dropped from 61 years to merely 18 {Source: Only Dead Fish}. If you read the article, you will see the cause is attributed to ‘Technological Disruption.’ Yet, during the period between 2005 and 2010 there was a slight increase in business life spans. As suggested by Andy Grove in 1999, in recent years, the Internet has indeed played a major role in given businesses a lift.
For the past 100 years,
we have seen a rush of technology that is mind boggling.
But, we haven’t seen anything yet. Over the next 40 years, technology advancement will increase more. {Source: The Emerging Future}.
The greater the rate of technology advancement, the more we are going to have to pay attention to it. There will be an explosion of highly intelligent biological, non-biological, micro, nano, virtual, mixed and morphing life forms colonizing the solar system and beyond, and each change will create more challenges for businesses than ever before. If businesses are to survive, it will require change at a rate equal to or surpassing the incidences of change.
Every change will affect us in one way or another. Today businesses are struggling to update their POS systems to accept the new credit card chip technology, while RFID is poised to drive chip technology into its grave.
We cannot stop the advancement of technology anymore than
we can control the weather or the incidences of criminal activity.
It’s a constant battle, and small business must change or die. There is a science of sorts which was first mentioned in 1980 called, “Technology Assessment, or Technology Impact Analysis.” It compels companies of all sizes to pay more attention to the changing environment they operate in, and promises us an interesting and a wild ride into the future.
