Originally published on Forbes in Jun 2023. This article has been republished here.
How To Change With The Change You Cannot Change
Director of Business Development at Equans invested in stakeholder consensus, EQ and outcomes-driven decision making.
In my previous piece, I started by reiterating that we live at the time where technology innovation is at its greatest. The breakneck pace of AI development, new use case applications for peer-to-peer connectivity and the ease or availability of mediums through which you can reach to market and engage with your target audience are unlike any other time in the documented human history—but does this mean the survival in this ever-changing landscape is only for the deliverer of these tech innovation?
What about smaller local SMBs whose business models are catered to the communities they serve? Does the future look bleak for them?
To me, the answer is clearly no.
Let me delve into this argument by giving an example.
The fashion industry for all its life has thrived on disruption. For at least the last 3-4 decades, we have seen high-end brands build innovative designs that have brought prestige and quality to their target market while coming at premium prices due to a) their reputation and b) quality of work.
Along came the invention of brands like Zara and H&M, who realized that what the masses need are trendy designs, stylish combinations and functional apparel—not necessarily a particular piece of clothing or accessory built to last a lifetime—and now we see most of the market remains underserviced by those larger brands.
I don’t need to remind you that at over $12 billion each, both brands constitute fashion industry powerhouses that can compete with any of their traditional and more prestigious rivals, and each comfortably sits in the top ten from a market share perspective.
It was just a common sense realization that everybody wants to look fashionable and trendy, and nobody will counter that argument otherwise generally, which evolved into its own niche we call fast fashion. It was not a new idea, but one that always existed in society, and now this market got even more disrupted with the arrival of players like SHEIN; with their meteoric double-digit MoM (month-over-month) rise within a span of few quarters, they have captured about 40% of U.S. market share.
We also see a similar shift in the larger corporate or B2C markets where established multinational entities lose ground and get rolled out of the picture (Sears bankruptcy as an example). This has led to a presence of small-time local entrepreneurs who serve a single geography or domain and have become nimble in the way they do service. Organizations like Shopify and Wix became a multibillion-dollar business providing tools and technologies that allow the local entrepreneurs to focus on the business.
This brings me to the central idea of my argument.
There is still a place in the local marketplace for your community lawyer, seamstresses and barbers, and that will continue to remain and grow so long as the global trend of migration to major metropolitan remains in place. Where these businesses need to become innovative is to take advantage of different tools and technologies that are available.
Continuing the same example of community servicing organizations, marketplaces like Amazon in the U.S. and Western hemisphere, Rakuten in Japan or Tmall in China has provided their seller a global reach.
I am most definitely not discounting the other side of the argument that with these players, there has arisen a new middleman that is the first party to take their chunk out of your profits. Small-business leaders must continue to maintain a big-picture focus in order to increase both their reach and profitability.
If your organizational mindset is still, “This is what has got us success in the past and how we have always done business,” you will find yourself going the way of any number of major players experiencing downturns at the current moment.
Adaptability is an old name—but the very cornerstone of the new game.
In today’s rapidly changing society, neither you nor any of your competitors, no matter what size, can fully predict how your industry will evolve and look in the future. Sure, there are analysis, modeling and other parameters that help forecast—and yes, many times these practices are spot-on—but nothing can be known about the future with 100% certainty.
Global events like geopolitical changes, natural disasters and even localized events like tariff changes can and will continue to reshape your landscape, and the pace of this change is forecasted to increase. But what is guaranteed is that as long as the human race is on our planet, there is going to be a need for services and products, meaning a business model of some sort will never cease to exist.
How you plan to change with this change will determine not only your organizational survival but will differentiate you from your competition, which is in essence the most pivotal driver for revenue and profitability growth.
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