You see them everywhere—people engaging with their mobile phones, swiping, tapping, talking, watching, listening.
Who makes all those phones–millions and millions of them? Today Apple and Samsung are the world’s two biggest phone manufacturers, but fifteen years ago Blackberrys were all the rage. A BlackBerry phone had a physical keyboard with tiny buttons for typing, and the phone allowed users to send and receive both calls and emails.
President Barack Obama used a Blackberry phone before becoming President (he was the first president to use email while in office). When Mr. Obama became President in 2009, the Secret Service wanted to take away his phone for security reasons, but he insisted on keeping it.
However, in 2007 something happened that signaled the beginning of the end of Blackberry’s time at the top of the smartphone pile. In 2007 Apple introduced the iPhone. When compared to a Blackberry phone, something was conspicuously missing from the iPhone—a keyboard.
How could people send texts and emails without buttons? Instead of a physical keyboard with actual buttons, the iPhone leapfrogged Blackberry and introduced a digital keyboard where buttons were shown on the phone’s screen.
Today smartphone users don’t think about touchscreen buttons being odd or unusual. Back in 2007, it was a big deal. And some people thought Apple was making a mistake. Steve Ballmer, the CEO of Apple’s fierce competitor Microsoft, laughed at Apple, saying, “There’s no chance that the iPhone is going to get any significant market share. No chance.”
Change is inevitable because our businesses are impacted by what happens around us.
Ballmer commented specifically on the keyboard issue: “It doesn’t appeal to business customers because it doesn’t have a keyboard. Which makes it not a very good email machine.”
Well, as it turned out, the joke was on the people who thought the iPhone was a joke. Blackberry went from being a household name to losing the phone market completely, its stock price dropping 87% between 2010 and 2013 as iPhone sales surged.
In 2010 Blackberry had nearly 22 million users in the United States. Apple passed it in 2011 and by 2016, Blackberry had fewer than 2 million users in the U.S. This year Blackberry finally shut down its phone service. It still exists as a company, but instead of being the premium smartphone brand, it’s a B2B and B2G company selling security software to businesses and the government.
Change is going to happen
Blackberry is just one of many thriving companies over the years to be overtaken by external events. In Blackberry’s case, it was a competitor who came along with a better product that consumers loved.
Change is inevitable because our businesses are impacted by what happens around us. In this way, your business is similar to a tree. A tree’s growth depends on factors such as soil nutrients, weather, and the amount of sunlight it gets. A storm can come along and cripple the tree. Or a drought may hold it back for several years.
The question for us is: Can we be alert enough to see what may be looming on the horizon and hopefully be prepared for it?
Common external sources of change
In his book Street Smarts: An All-Purpose Tool Kit for Entrepreneurs, Norm Brodsky tells how he was caught off guard by two external forces in the late 1980s: changing technology and a stock market crash.
Brosky’s business was called Perfect Courier. Perfect Courier had merged with another business that turned out to need a lot of cash to stay afloat. This merger put strain on the business. The first external factor Brodsky mentions are fax machines, which were coming into widespread use at the time. More businesses were faxing documents instead of relying on courier services like his.
The second external source of change was a stock market crash in 1987, which hit financial companies that were among his best customers. Under the onslaught of adverse changes, Brosky’s company crumbled.
Brodsky wrote that it took a while for him to process what happened and to stop making excuses. “After all, who could ever have predicted that the stock market crash and the fax machine would hit us at the same time? In my gut, however, I knew that blaming circumstances was a cop-out. The real question was, how had the company become so vulnerable to those developments?”
Brodsky eventually accepted the fact that he had taken on too big a risk without being prepared for it. He writes, “I eventually forced myself to acknowledge what I knew to be true. I’d taken a lovely, secure, profitable business and destroyed it by exposing it to a level of risk it should never have faced.”
Following are some common sources of changes that impact our businesses:
Competitors. Competition keeps us on our toes and working hard to be our best. The story of Blackberry illustrates how competitors can spark massive change in an industry.
Technology. New technologies have a constant effect on business because they affect not just the product itself, but also consumer behavior and internal business operations.
Carmaker Tesla engineered new battery technologies and successfully brought electric vehicles to market, proving they could become mainstream. Legacy carmakers were forced to sit up and take notice, fearing they would be left behind like Blackberry. Ford restructured its organization in response—one part of the organization focused on vehicles with internal combustion engines and another part focused exclusively on electric vehicles.
Consumer attitudes. People are changing all the time in response to culture, technology, and more. For example, in the last decade, there have been changes in how people think about what they eat, leading to more interest in organic and other healthy food options (not to mention products like vegetarian meat).
Another example: per capita, soft drink consumption in the U.S. has fallen every year since 1990, though sugary drinks are still big business. We can see the impact of this change in consumer preferences in how soda companies like Coca-Cola and Pepsi have invested in healthier alternatives such as Honest Tea, bottled water, and fruit drinks.
Government and regulation. Government regulation can have a big impact on your business. For example, trucking companies are always alert to how they will be affected by new rules from the government. Government decisions to raise or lower taxes are external factors that can affect your business.
The economy. Homebuilders are often affected when the economy goes south, but the overall economic climate affects businesses of all types.
Social changes. We are all concerned about the spiritual impact of social change in our country. But social changes have an impact on business too. Because of social change, businesses are more likely to be sued today than they were fifty years ago.
Examples of other changes with business implications in the social category: more leisure time, increased spending on pets and pet accessories, more senior citizens due to the aging Baby Boomer generation.
People come and go. Events come and go. And businesses come and go.
Adapting to external changes
We all went through a time of dramatic change in 2020 and 2021 with the arrival of Covid. Businesses struck the hardest struggled to survive.
In his book Get Different, Mike Michalowicz shares his “1-Step Back Method.” He suggests backing up one step in the process of producing your final product and ask: Since my final product is no longer viable, is there a way I can change my offer and make money with the previous step?
Michalowicz uses the example of a restaurant. The final product is a meal on the guests’ table in the restaurant dining room. With Covid shutdowns, that was no longer an option. What is one step previous to that? Bringing the food from the kitchen to the table. Many restaurants were able to adapt that step and offer takeout and delivery.
But taking one more step back brings us into the kitchen as food is being prepared. What could a restaurant do to make money with that step during Covid? Michalowicz points to one restaurant owner who started offering online cooking classes. Another restaurant partnered with a food truck to offer prepared meals in people’s neighborhoods.
One restaurant’s story
One of Rosewood Marketing’s clients faced this very situation. The owners of Pebbles Family Buffet realized that the Covid shutdowns were going to crush their business. They came up with the idea of making frozen dinners and selling them in grocery stores.
It was the “1-Step Back Method,” developing a product based on a previous step in what had been their normal process of serving buffet customers. Not only that but there was demand for that type of product. With so many people eating at home, grocery stores had trouble keeping their freezers stocked.
The Pebbles frozen dinner story isn’t over yet. With the Covid shutdowns over, the Pebbles kitchen couldn’t supply both the restaurant and the frozen dinners. They opened a commercial kitchen to prepare frozen dinners. Though sales have slowed from their Covid highs, the Pebbles team is convinced that their new product has more potential than their restaurant. “It will come,” one of the owners said recently.
In 2018 Jeff Bezos, founder of Amazon, one of the world’s most successful companies, said, “I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”
People come and go. Events come and go. And businesses come and go. As external forces act on our businesses, let’s be vigilant, creative, and ready to turn threats into opportunities as God allows.