Change is the Only Constant

A company should have a well-defined vision and mission, core values and a code of ethics. If not, you may evolve into something which is very different from what was wanted. This does not mean that you should not change, but do so consciously and see around the next corner the best you can. Recognize that change is inevitable in every endeavor. You may have entered a new market, added a new product line or a service that you recognized as a great opportunity; and perhaps it was for a long period of time, but nothing last forever and change is inevitable. Carefully evaluate a new area to?understand its risks as well as its rewards. Capitalize on it, while not overlooking the risks, challenges, and threats it will pose to entrenched businesses by being the proverbial cockeyed optimist. Carefully consider and plan for things going sideways. This would include: the greater need for cash that is envisioned, the human capital skill sets required, the unanticipated risks uncovered as time goes along. Fully evaluate and then buy quality insurance policies to adequately protect you. This, plus dozens of other factors to prepare you for various conditions, both good and bad. Then compare this new venture to your current business to make an informed decision about whether to proceed or not. Let’s look at a few situations involving change, from truly great businesses, all the way to what to do when your dreams don't come true and its time to bail out while your business still has some value.?

1.????The true disrupters and innovations to their and other industries (only 20% of co. succeed here).

These are those remarkable individuals who are a combination of: risk takers, creative types, visionaries, brilliant, lucky, savvy, etc. who build something that is a world beater of an idea that becomes an entire industry. One of the best-known stories is Apple, started in 1976, which may have become the all-time disrupter all disrupters. With vertical and?horizontal integration, unparalleled brand loyalty, It had some luck as well as a few bumps on the way which it learned from.to create new many new products and markets and is truly ubiquitous product around the world?Even after the loss of Steve Jobs, Apple has continued to prosper. Apple’s first year (2016) sales were less than $1 million and sales now are $400 billion. It disrupted and replaced whole industries from cameras and photos, much of the US mail, the music and entertainment industry, wristwatches, with more certain to come. A legion of other disrupters include: Google, Tesla, Amazon, Airbnb, American Express, Polaroid, Netflix, Uber, Facebook, McDonald’s, Monster. Another such company ?however Blockbuster, is discussed going from this category to #5.

2.????Focus on high value. margins, and profit, sustainable growth, quality, branding, new businesses

Although there are many industries to use as an example to succeed, Let’s look at the staffing industry which has largely been commoditized over the last 25-30 years. At the start of this period, we had growth rates of 15-20%/year, margin rate was 25-30% and pretax EBITDA?multiples were over 10x. Then, due to the attractiveness of the market, the industry attracted more entrants who competed on price to gain volume, particularly in the temp sector, which dominated the market. Growth rates and multiples fell into the low single digits and margin rate fell into the mid teen to the low 20’s range for most companies. To try to maintain profitability, the larger companies lower their cost with offshore recruiting and squeak out a few more points from commodification portals, further dominating the market. Artificial Intelligence will certainly be the next challenge, with fewer recruiters, less admin and managerial personnel as well as sales reps.

Staffing does have some champion level public staffing companies, including ?Robert Half, Hire Quest and. ASGN based on their EBITDA multiple, high margins, brand name and balance sheet KPI’s. If staffing, however, wants to move into the future, it needs to go beyond commodity staffing. A huge opportunity exists in: project. management, data analytics, enterprise project management, supply chain analytics, marketing analytics, big data, spatial analytics, risk and credit analytics, data visualization, predictive modeling, data mining, forecasting simulation, optimization to create insights from data, identifying new patterns and relationships etc. This is where the large corporations exist like PwC, E&Y, Accenture, Oracle, Tableau, Fractal Art, and a few dozen more. ???

3.????Use your cash and other resources to acquire another lucrative businesses.

IBM, once the unchallenged king of mechanical tabulating machines and then the colossus?of mainframe computers, with no competition as well respected as it dominated the market. with sales of $107 billion in 2012. It held onto to its cash cow far too long it belatedly entered the PC market and eventually sold it off to the Chinese, who rebranded it as Lenovo and is the largest manufactures in the world with 24% of the market. IBM used those funds to acquire PwC’s consulting division after the breakup of the big 8 CPA firms.by the government after the conflict between auditing and consulting, precipitated by the Enron scandal of 2001 This has been a lucrative acquisition serving the lucrative area of management consulting and it used to expanded into data analytics and AI. IBM’s Total sales was $61 billion in 2022, which discounted for inflation resulted in sales decline of 42%, with a profit of Actually, this was great for a once colossus who had ?stumbled but reinvented itself.

4.????Wither away, fighting a lost cause and have nothing to show for their hard work.

?The Banana Republic did this albeit late to shed what was its once iconic image of the Indiana Jones movies fad, to appeal to their 1970’s customer base, who had moved away far too long to predict the next wave and then moved from one fad to another and quickly capitalizing on the current apparel fad, from oversized clothing to who knows what is popularize by some obscure Tic Toc influencer. So, minimal stock on hand, with a nimble and highly?responsive JIT supply chain is critical to success. Some of the aforementioned companies reinvented themselves with spectacular results. Like Netflix, Amazon, and IBM. This was the case for Radio Shack. Its loyal clients base, hobbyist, might have been retained with a simple changing of name from the archaic Radio Shack to rebranding it with something modern like “ YESce” Your Electronics Savvy - computer experts.

?If the belief in one’s newfound beliefs are not strong enough, they are still persuadable and they are not yet true believers and not committed to the cause. They are being filled for the uniform of the new team and have are still persuadable. It may be a fad or flavor of the month. They are intrigued by the enthusiasm around them but have not signed a contract with the new team just yet and infatuation with the new girl (or boy) they are dating, and may even be engaged, but not ready to get married just yet. In today’s world of immediate satisfaction by Amazon, is very easy to see why there is so much open space in the retail outlets world.

5. ??Cash out while you can, consider being acquired or liquidating your assets while still have value

Everything has its day in the sun. So, if you can’t reinvent yourself, consider selling at the top of the market. Friendster, a social networking company had an offer from Google that was offered $30 million they rejected, and which would had some $1 billion today. Blockbuster, which had the opportunity to buy Netflix, At it peak has 6,000 stores and never saw the writing on the wall and went into bankruptcy. but passed on it. And ?Polaroid was just a passing fad, which peaked in 1977 with $3 billion in sales and went into bankruptcy, selling off its name and IP for pennies on the dollar. There are too many situations to even name, so here are some memorable tombstones: JC Penny, GNC, Brookes Brothers, Pier 1 Imports, Chuck E Cheese, and Sizzlers.

There is a lot to consider here, the good, bad and the ugly. Think about the conditions that lead to success or failure. Assuming you have patented mice trap that everyone will want to buy. Someone else might eventually invent a better mouse trap. Mice will evolve and not go anywhere near your trap. All the mice will be fumigated due to diseases they carry. And even maybe, a Society for the Protection for Endangered Mice will make killing them a crime. All things are possible.so have a plan for various eventualities.