By Mubarak Sooltangos 

If there is anything constant in life, it is change. Tons of literature have been produced on this subject by several business Gurus and it still occupies a prominent place in business books, but it is viewed and treated only theoretically. It suffices to say that since change is a permanent and ongoing process, all businesses should breathe adaptation to change at every moment of their life and tackle changes as and when they arise. Waiting for several changes to have happened and then having the urgent need to have to tackle several changes of different natures concurrently is a sure recipe for disaster.

Adapting to change

Businesses should always be involved in research and development and should cultivate a permanent “adaptation to change” mentality. Wise CEOs make provision in cash availability or new borrowing capacity to cope with the financial requirements of adapting to change at short notice. Being prepared for change also involves, in the recruitment programme of any sizeable business, the hiring of new and young talent not necessarily productive immediately but representing a bank of potential and promise to face future changes. The characteristic of these new recruits must be their capacity not only to face change but also to initiate change which will always give the business an edge over its competitors.

Pre-empting change

I would say that adapting to change is not even an achievement. It is the minimum acceptable in life to remain connected with the world. Changing the speed of life as one grows old, learning to manipulate computers, internet, social media and electronic messaging, and being alive to digital products in banking and commerce are but a minimum, otherwise quality of life itself suffers and generation gaps are created.

In business, a whole enterprise can put its own existence in jeopardy if it does not adapt to the market by responding to changes in demand, putting up with competitors, enhancing its production equipment and changing its means of communication with its customer base. Any company staying alive by bringing such changes can hardly be called a progressive company. It is a follower, driven by its conservation instinct, and there is nothing in this to be overly proud of.

Over and above adapting to change, there is a superior business philosophy which is called “pre-empting change”. This requires thinking at all times, to figure out what may be the likely changes that may come, at least in the near future, and to get prepared to act swiftly, and ahead of competitors when this happens. Any equipment or automobile manufacturer must be aware that fossil fuels will have to be replaced by another source of energy because of their depletion and of the risk that their price soars as a result of war in the Middle East. Companies like Coca Cola must be prepared to face a more than likely ban on single use plastic containers worldwide quite soon. Snack, industrial food and chocolate manufacturers, and even the most powerful like Nutella, Lays and Nestle must be thinking of a plan B in case palm oil in food is banned, as being unhealthy and ecologically destructive. Mass market garment manufacturers, especially in the low end of the market must be alive to the fact that rising labour costs will force them one day to switch to capital intensive ways of production as opposed to labour intensive.

Making a virtue out of change as opposed to suffering change

A higher philosophy still than adapting to change and pre-empting change is that of making a virtue out of change. This is the exact opposite of suffering change and be forced to react to it to stay alive. The biggest beneficiary of the fundamental changes which computers have brought in every walk of life has never been involved in computer manufacture. His name is Bill Gates and he has thrived on the change brought about by computers by bringing into the equation the software that makes computers work. This is what is called making a virtue out of change.

Intelligent people have also made from the rising price of fish due to depletion of natural stocks, a new industry called fish farming. Others have seen in changing health considerations, opportunities in Bio Farming. Rising textile fabric and labour costs in high income countries have seen giants like Nike and Adidas moving global by buying cheaper textiles where they are produced in emerging countries, by manufacturing their products in countries having abundant supply of labour at cheap prices like Bangladesh and selling their products in affluent countries at high prices.

There are other examples, namely Facebook and Instagram, that have taken advantage of the huge potential of computerization in making communications swifter, to make information available in real time and earn considerable advertising revenue. There are also a host of manufacturers in all fields, who have taken advantage of the miniaturization trend in almost everything we use, to manufacture smaller and smaller things to achieve bigger and bigger goals. It must be remembered that the pioneer of miniaturization in consumer electronics was Akio Morita, President of SONY and inventor of the legendary “Walkman”.

Creating change

The challenge is to forecast what the customer wants.

Topmost in the hierarchy of change professionals are those who provoke change. Many of them have become immensely rich and, more importantly, will be remembered as icons in their respective fields. It does not mean that all creators of change must necessarily be successful. A provoked change in business must either correspond to an existing, but unfulfilled demand, or create a demand which meets the aspirations of the market in terms of usefulness, performance, durability and, most importantly, affordability.

By far, in my memory, the greatest change provoked in contemporary history of services is the introduction of express courier service by DHL in 1969. It has been a revolution in the conveyance of documents and parcels which has taken the world by storm. The creators of DHL express courier service have worked on tangible competitive advantages over the parcel post service and targeting the affluent corporate market. The advantages proposed have been: added security, pickup service at sender’s premises and door to door delivery and finally a time saving of about two weeks when compared to conventional parcel post service. The price of this service, although not less than five times the cost of air parcel cost, was not a barrier since the first target market was business enterprises which could afford this high price in return for a very sophisticated, quick and secured service.

Later, the service has been enhanced by a further refinement, that of being able to track permanently the location of the parcel. DHL now ensure their own conveyance with a fleet of cargo planes, which has been a judicious move into vertical integration yielding more profitability. Moreover, this has eliminated dependence on conventional airlines and competing for space in cargo planes with freight forwarders. The huge success of DHL has made its physical

presence in 220 countries possible, making DHL a global player, with a single product, present worldwide and the creator of 350,000 jobs. Today, we cannot envisage overseas business without express courier. Pure genius.

Creating perpetual change

There are industries which have made perpetual change the vector of new business and higher profitability. This is the fashion industry and the main products concerned are women’s dresses, shoes, handbags and fancy jewellery. Permanent change in offering is the name of the game in these industries and those who do not satisfy this exigency are condemned to being followers and to accepting a lower price for their products.

Provoking change, in any industry, can be synonymous with huge success as well as resounding losses. The challenge is to forecast what the customer wants, even if this want has never been expressed, to create competitive edges in the product, and to produce it at a required price which the customer can afford. There are dangers and improbabilities in each and every word I have used to describe the product.

Provoking change is one of the biggest challenges in business and can lead to costly failures. The saddest example in this respect is the gem called CONCORDE Supersonic passenger airplane, which, 40 years ago, could not command a premium price for the considerable time saving it brought to passengers. At that time, time was not of the essence, unfortunately.

Change is not a panacea and it does not always guarantee success. Certain products draw their appeal from their unchanging nature. Coca Cola is one of these. The day it changes its formula and taste, it will head towards catastrophe. Some 20 years ago, it made an attempt to “enhance” its taste with a new formula. This exercise was a complete failure, compelling the giant to back pedal. It is the exception that confirms the rule.

Mubarak Sooltangos
Mubarak Sooltangos is a Business Lecturer and the author of Business Inside Out (2018).