Wednesday, April 29, 2015

Reinvention: The Common Thread

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Above everything else, you must be open to change if you want to survive and thrive as a business, says Lloyd Shefsky in his new book, Invent Reinvent Thrive. “Everything else comes after.”

Reinvention is the common thread of business success, and it’s not just about starting with a new idea or concept that breaks the mold, but about fully embracing change while the business grows – recognizing that constant innovation is key to surviving in today’s world of uncertainty.

In a recent interview with Kellogg Insight, Shefsky (who is a Kellogg School of Management Professor) talks about the trigger for the book, which was the realization that people who succeed do so because they reinvent themselves and their businesses. They all did it and continue to do it. To inform his book, Shefsky went out and spoke with entrepreneurs and family business giants, including leaders of highly successful companies such as Starbucks, Costco, Charles Schwab & Co. and Staples.

Shefsky gives the example of Starbucks. Founder, Chairman and CEO Howard Schultz had an idea, and then went about “trying to convince the American public – who were used to bad coffee – that they should pay a fortune to get some kind of different coffee that they’d never tasted in a paper cup and be happy.” But that wasn’t quite the point. What Schultz ended up selling was an experience – access to a secret club where people spoke a different language, ordering a ‘doppio’ instead of a ‘double espresso’. People wanted to be part of it.

Years later Starbucks faced a few bumps in the road, with concerns about volume and profits. Had Schultz adopted a tunnel-vision approach he might have considered changing his prices in the hope that this would be the magic solution to his problem. Instead, he visited his stores, and realized that Starbucks had changed – no longer was it a friendly place with atmosphere, noise and the smell of coffee. A new coffeemaker had been brought in that eliminated noise and that delicious coffee aroma, and also blocked the customer’s view of the barista. Schultz made a change to take Starbucks back to what it was; a backwards reinvention.

Shefsky highlights the take-away insight for people who are interested in the book: “…invention is really critical. Yes, it takes confidence. Yes, it takes guts. Yes, it takes skill. But you really have to figure out how you’re going to reinvent… Recognize that even the best success stories you can imagine miss things and mess up things. So that’s another kind of reinvention: After you mess up how do you reinvent it to put it back together?”

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