In a Crisis Change the Rules of Competition

Instead of trying to figure out how to beat your competitors, a smart strategy would be to change the rules of competition altogether.

Fueled by the recession and the rise of social media, digital marketing reshaped our industry. Most small to midsize ad agencies were asleep at the wheel. 

A similar example is what happened to Kodak in 2003, when it was snoozing as the world shifted from film to digital photography. The company severely misjudged the speed and impact of this transition and its lifestyle implications. As a result, Kodak’s core business, in which it was clearly dominating its competitors, was on a fast track to becoming obsolete. 

What were the consequences?

• After 70+ years, in 2004, Kodak was delisted from the Dow Jones Industrial 30 Index of leading American companies. Kodak then embarked on a radical and painful restructuring to reestablish its relevance.
• It had to cut 27,000 jobs.
• It posted 8 consecutive quarters of losses through the end of 2006, with a single quarterly loss of as much as $1 billion in 2005. The company was forced to file Chapter 11 bankruptcy protection in 2012. 
• Even though Kodak quickly became a leader in digital photography, it was not a sustainably profitable business. 

Lessons for Ad Agencies:

There are too many agencies that look, act and talk just the same. It’s time to rethink long-held strategic assumptions about your agency and challenge decades of conventional wisdom in our industry. In times like this, you must push to learn, grow, and innovate. Especially when it comes to new business.

How to change the rules and break out of the pack:

• Change breeds opportunity. Don’t play by the rules. Unlevel the playing field and redefine the rules of the competition. Be the first to find new opportunities. With the unveiling of the iPad, Apple symbolically stepped away from the familiar confines of the PC era, leaving behind its own initial core business along with the competition.
• Don’t wait for other agencies to lead the way, be innovative. French novelist Marcel Proust said, “The real act of discovery consists not in finding new lands but in seeing with new eyes.”
• Break out of your comfort zone. Agencies have been comfortable in the middle of the road. But today, as William C. Taylor says, “The middle of the road is the road to ruin. The only thing in the middle of the road are yellow lines and dead armadillos.”

Leave the comfort zone of complacency. Now is the time to stimulate creativity for business. Dramatically shift your thinking and spur innovation. Change the rules of competition. 

I started my consultancy just over 12 yrs ago. My timing was terrible. Little did I know that it was the beginning of the Great Recession, the longest economic downturn since the Great Depression. This could have easily been one of the worst decisions of my life. But, it was either sink or swim. 

This period completely changed my approach to new business. I happened upon a CMO study that stated, 80 percent of decision makers found their vendors not the other way around. I realized a paradigm shift was taking place. Instead of chasing new business, it was more important to be found. 

My business flourished during the recession. It was an exciting time, kind of like the wild, wild west. There weren't many mentors, but there plenty of detractors and critics. They only hardened my resolve to explore a new path. A new way of doing new business. There was a lot of trial and error, experimentation, analyzing and learning. 

Once again we're going to have to adapt and rethink how we do new business. Don't look at it as a liability, Look at it as an opportunity. 

About Michael Gass

Consultant | Trainer | Author | Speaker 

Since 2007, he has been pioneering the use of social media, inbound and content marketing strategies specifically for agency new business.

He is the founder of Fuel Lines Business Development, LLC, a firm which provides business development training and consulting services to advertising, digital, media and PR agencies.