“Invent Reinvent Thrive: The Keys to Success for Any Start-Up, Entrepreneur, or Family Business” by Lloyd E. Shefsky (McGraw-Hill, $ 26).
Successful entrepreneurs see their vision as a jigsaw puzzle. They know that they will have to “manufacture” pieces to fit as vision becomes reality. They also understand that they must make the puzzle bigger (i.e. reinvent) as business grows because that’s the only way to stay customer-centric and stave off competition.
They become subject matter experts before they start a business. Shefsky cites Tom Stemberg (Staples) as an example. Stemberg visualized Staples as the office supplies equivalent of Costco. He spoke with numerous owners of office supply stores. They told him his idea wouldn’t work because “that’s not the way the industry does business.” He spoke with customers large and small; they were intrigued by the prospect of a one-stop store with great service and low prices.
Stemberg concluded that existing owners didn’t realize their business model was broken; so they didn’t know it needed to be fixed. They thought their puzzle was complete; it wasn’t. He found their missing pieces.
Maxine Baker (Build-A-Bear) worked her way up the ladder in her 25 years at the May Company; she left it to become the CEO of Payless Shoes. From a personal standpoint she found that the higher she climbed the corporate ladder, the less connected she became with customers. She decided she wanted to be a hands-on owner (i.e. reinvention), not an executive. Her corporate background honed her skills, but she still didn’t have the idea.
Her “aha moment” came on a Beanie Babies shopping trip with a friend’s daughter. The 10-year old observed that similar stuffed animals could be made at home. Thinking back to her corporate days, she remembered that “Retailing is entertainment, and the store is the stage.” Baker decided to start a store where kids could customize and accessorize teddy bears and take them home the same day.
Makers of stuffed animals didn’t get it; they had manufacturing and distribution systems that “worked.” They believed kids only wanted one teddy bear. Baker’s customer research proved them wrong. People would stand in line to see the joy on the faces of their kids when their unique animal was created.
She didn’t stop at teddy bears; she reinvented. I stood in line with my granddaughter as she selected another “My Little Pony” while the kid behind me was telling me how he was completing his Teenage Mutant Turtle collection.
Shefsky tackles the captains on industry with this advice, “Creative destruction is the DNA of business: Survival is hard won, not automatic.” He cites Kodak’s self-destruction as an example of the lack of reinvention. Film and its processing was Kodak’s No. 1 moneymaker; for nearly 100 years, everyone had their favorite Kodak moments. In 1975, Kodak patented a digital camera, which could have provided the potential for its reinvention and success for decades.
Instead they shelved it. After all, digital photography would have cannibalized its cash cow. Unlike its founder, George Eastman, who twice adopted disruptive photographic technology, Kodak’s management didn’t consider digital as a replacement for film. They quit building the puzzle, and Kodak became a non-player instead of a pioneer.
Then there are the countless brick-and-mortar retailers that scoffed at e-commerce — until it ate into their market share. Jeff Bezos and other e-commerce entrepreneurs saw the online shopping opportunity the Internet presented; they were putting together a different puzzle.
The bottom line: Entrepreneurs should always answer “no” to this question: “If I were starting this business today, should it look like it does today?”
Jim Pawlak is a nationally syndicated book reviewer.
