Migrating from a sales-centric to market-centric business model is a real challenge for most organizations in the business productivity industry. It is not a challenge of technology; and it is not a challenge of finance or capital. It is a cultural challengethat goes to the root of whaqt made amny legacy bsuinesses successful: the ability to sell. Selling in the digital age is profoundly different and owners and senior execs are challenged to adapt to new conditions that have all the charactertistics of a cultural revolution.
As we all very well know, the Business Productivity Industry – formerly known as the office products industry – is undergoing profound changes. Some of these changes include:
- Encroachment upon the industry by outside players with substantial resources and disruptive technologies (Amazon, Costco et al):
- blurring the lines between categories and among players
- Wholesaler reach into dealer/customers and directly into end-user:
- In some cases but by no means all, induced by legitimate, fully functioning technologies
- Diminishing concentration of power held by global players (domestic and overseas):
- SPLS anticipated acquisition of ODP by the end of 2015
- Demand for selected Subcategories shrinking and fading away induced by Digital Age Life/Work Styles:
- e. filing supplies and equipment; copier and copy paper
- Consolidation at the independent dealer level – some of the large are getting larger.
Everyone – manufacturers and resellers alike – is under pressure not to just tweak their business models, but to reinvent them. What does it mean and how do you go about it? In my previous blog I introduced a Framework for the Evolution of Business Models. The framework suggested four phases of primary focus, namely:
IV. Business Model-centric
Many players in the industry are beginning to realize that they need to shift from a focus on Sales to a focus on Markets, in other words from Phase II to Phase III. Why is this migration from Phase II to Phase III so important and also so challenging? To my way of thinking, the most challenging aspect of this reinvention model is the notion that Selling in the Digital Age is profoundly different from Selling Pre-Digital Age. For example, you may have taken the digital step of registering your firm on Facebook, Twitter and Pinterest. If you have done so, but at the same time, you’re maintaining a traditional approach to recruiting and training of your sales representatives, you’re setting yourself up for a ‘clash of civilizations’.
The very core of what held many of the companies in this industry together was the owner/founder/senior executive’s talents and skill sets in the arena of sales. If you could sell, and you could teach other people to sell, you progressed in your career; if you didn’t or couldn’t, you would remain at a secondary level of influence and authority. These pre-digital age skill sets are out-of-date and obsolete. An entire generation of sales-oriented, competitive executives finds itself in the uncomfortable position of having to relearn and indeed, question everything they have learned about their core competency throughout their careers. This is at the core of the challenge for those organizations in the business productivity industry that find themselves stuck in the Sales-centric Phase II of my Framework for the Evolution of Business Models. It is not a financial challenge, and it is not a technological challenge.
It is a challenge of culture, of the way we learn, what we learn, how we learn, when and where, what is acceptable as non-threatening, how we innovate, what is perceived of as innovation, how we view all aspects of creating value together. Here is where it all starts. Recognizing this challenge, properly defining it and beginning to embrace a process of transformation starting from this vantage point, is a good way forward out of the crisis that so many companies in this industry find themselves in.
What does this cultural revolution mean for your business? For you personally? Have you adapted successfully and what are your thoughts on what it took you to get there? If not, what resources, if any, do you have available within reach to help you get through?
Read Thomas’ previous post on this subject: Evolution of the business productivity industry
Schinkel and Associates