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Monday, February 1, 2010

Don't Resist Change: Embrace It!

I recently had an opportunity to hear a small business owner speak with a group at school.  He owns a retail store that is struggling to stay afloat.  Sure, the current economic climate has much to do with his problem, but his business has been losing money for a few years now.  Many members of the audience gave him some helpful suggestions, including working with more specialized (niche) customers and building a website to showcase products.  Most suggestions were met with responses like "I don't have the money to put into that" or "that's not where I see the business going."

It's a shame, really.  One area where small businesses have a distinct advantage over large corporations is their ability to adapt to a rapidly changing environment.  There is no board of directors to convince, no stockholders to placate, no executive committee to endlessly deliberate: just one or two people at the top that either pull the trigger or don't.  Often companies are scared to make changes, even if their current operations are flailing.  These are a few examples that come to mind.

Xerox and the Personal Computer

Xerox developed one of the first PCs, the Xerox Alto, in 1973.  Though they used the devices in their own facilities they ever attempted to market them to the public.  An excerpt from their Wikipedia page:

Xerox itself was slow to realize the value of the technology that had been developed at PARC.  After their unhappy experience with SDS (later XDS) in the late 1960s, the company was reluctant to get into the computer business again with commercially untested designs.
In 1979 Steve Jobs visited Xerox's Palo Alto Research Center and was impressed by the technology.  He incorporated the graphical user interface into his products, making Apple Computers an early leader in the personal computing market.

RIAA and Digital Music

The popularization of the personal computer created huge changes for every industry, though some resisted more than others.  The Recording Industry Association of America (RIAA) had never been thrilled that consumers could share music by dubbing tapes or recording compact discs, but in the mid 1990s digital music presented a problem: consumers plugged into a network could share music files with the click of a button.  And everybody was connected to a network!  File sharing service Napster became a household name, and in July 2001 The RIAA finally succeeded in shutting it down for allowing users to illegally share copyrighted music.  However, the RIAA should have been more focused on developing a way to sell content online rather than fighting to keep music off of the internet.  Six months earlier in January Apple introduced iTunes.  Now studios must distribute through that channel (and split their profits) if they hope to reach an audience.

Book Publishers and eBooks

I like this example because it's happening right now.  eBooks should, by all rights, be great news for publishers.  They get rid of printing and distribution costs, and they make stock-outs irrelevant.  Also, illegal downloads are nowhere near as likely as in the early days of digital music.  Change is frightening though, and some industries will resist change even if it's overwhelmingly positive.  Amazon's Kindle was an overwhelming success for eBooks in 2009.  Apple is already (tentatively) partnering with several publishers for its upcoming iPad.  Does that mean the publishing industry is learning from past mistakes of Xerox and the RIAA?  Judge for yourself:

Fear the Kindle
Book Publishers Starting to Delay eBook Releases
Wary Publishers are Fighting the Future

No matter what industry you work in change is always just around the corner.  You can either embrace it, or you resist and get crushed by Apple.
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