I just got back from Target’s big liquidation sale at the local mall. It is both amazing and scary to walk through the skeletal remains of this modern retail success story in the throes of one of the biggest failures in retail history.
Just two years after expanding into Canada, Target is retreating south with its business tail tucked firmly between its legs. How this successful giant failed so miserably will be discussed for years to come. Based on my analysis, the company simply dropped its tried and true USA based model into the Canadian market assuming all would be the same. Obviously it wasn’t. Throw in a disastrous privacy breach and Target Canada never recovered. They did try. After initial sales figures failed to meet expectations, I did notice a significant “Canadianization” of staff in my own local store with lots of friendly interactive customer service and great manners but it was too little and too late. Now the liquidation is under way.
By now you are wondering what does this have to do with managing technology in my business? Well the simple answer is that over the last twenty years, the majority of corporate innovation has been led by the technology side of the business. CIOs and CTOs have increasingly taken a seat at the senior leadership table. Think about how many times you had to work hard to convince your leadership colleagues how new technology could benefit the business, indeed was critical for the business to remain competitive. Sound familiar? When I served as a CIO in a medium sized enterprise I found myself in the role of disruptor regularly building cases to show how investment in innovation would lead to increased success.
Every established company needs to look at Target’s experience and wake up to the reality of the 21st century business world. Simply redoing the same proven model every day and hoping that is enough will lead to failure. If companies, and in particular, mid and enterprise level ones want to survive and thrive in the years ahead they need to listen to thought leaders such as Steve Blank when he says “to survive companies need innovation by design.” Blank and others are encouraging established businesses to adopt a startup mentality within their companies. That makes sense if you think about it. So often we see startups as one kind of company and established corporations as something completely different. Yet every successful established company was once a startup; one that achieved the startup goal. That goal, as Blank states in his book The Startup Owner’s Manual, is “…to establish a temporary organization to search for answers to what makes a repeatable scalable business model.” All established companies started here. The ones that want to stay around for the future will have to go back to their beginnings and a growing number of writers extolling the new relationship between established companies and startups.
In his recent e-book Holding a Cat by the Tail: Lessons Learned from an Entrepreneurial Life, Blank draws on his own personal startup, board director and advising experience to provide guidance to established companies. His key ideas are below:
- Just because a company is profitable doesn’t mean its core business isn’t crumbling under its feet.
- Established companies that do not foster continuous innovation are dead long before they close their doors
- Innovation in new markets comes out of opportunity, chaos, and rapid experimentation. Highly organized established businesses are challenged to create that internal chaotic startup environment.
- Simply acquiring startups or competitors to keep your business current does not always work often due to challenges integrating the different business cultures.
As the technology leader in your company I urge you to become familiar with the startup thinking of Blank and others. Most likely it will be you and your teams who will rise to the opportunity of the moment before your more traditional business colleagues do. Technology leaders are the best prepared in established SMEs to respond to the changed global business environment and effect needed change within their company. The reason I say this is because if you’re a successful IT leader in your company you are already following Blank’s startup model every time you move to introduce new solutions to support the business. How are you doing that?
You…
- Develop a hypothesis around what the business problem is and what the solution should be
- Get out of your office and speak to you “internal” customers to test the problem and your proposed solution
- Confirm or adjust based on the input you receive.
- Implement (or not)
This approach aligns with Blank’s startup model, the main point of which, is to get out of the office, basement, building or where ever you are doing your work and have conversations with and listen to your customers. The majority of companies will not want to go out and have those conversations, and the better the profit margin they are enjoying the harder it will be to sell executives on the idea. As a successful IT leader you already understand the importance of input from your customers even if they are company employees. Are you ready to provide that leadership in the years ahead and shift your company’s world view to one of continuous innovation? The continued success of your company depends on it and no one is better prepared to provide the leadership that the IT heart of the operation.