EVOLUTION - The Missing Link
Updated: Jan 20
Published on June 28, 2019
This week Amazon announced the launch of their Professional Beauty Store, a first foray into the wholesale distribution of goods purchased by salon, spa and barber professionals. Being at ground zero for almost everything relating to the business of beauty, my email and texts were buzzing as word got out. The questions and concerns mostly came from my distributor colleagues looking for my opinion on what the impact will be. The common term they used was DISRUPTION. Ironically, last fall I published a white paper titled DISRUPTION, REALLY? about how change has been historically misinterpreted as the insurmountable end of the world. In the article, I pointed to THE FOUR Es execution model and conceded it was missing a fifth E for EVOLUTION. First, I want to level set that this article won't end in a debate about Darwin, however, it will apply the concept of Natural Selection, the core principle of his infamous Theory Of Evolution, to today's business climate. In short, Natural Selection is how species evolve from environmental stresses to build a functional advantage. Those not capable of adapting are at a disadvantage and lose the ability to survive. Yes, extinction. Sometimes even the strongest or the biggest cannot evolve fast enough to survive change. We only need to look back 12,000 years to the last ice age to see this at work. While humans adapted and evolved quickly, the pace of the environment change was too fast for large mammals like Woolly Mammoths to adapt. The two responses to environmental change that keep extinction at bay also produce uniquely different outcomes. “Adapting” is no more than surviving and keeping pace. "Evolving”, on the other hand, is changing to thrive with an outcome of sustainability. The reality is, if one can’t first survive, evolution isn't an option (just ask our hairy elephant friend). How does this theory of nature relate to today's business? We only need to look at the businesses that resisted and didn't adapt to technology. Unless they were the best roadside BBQ in Austin, TX, they're gone! Think of it as crisis management vs strategic execution. Yes, the Amazon wholesale strategy is most definitely a disruptive model. Let me propose that, the ability to evolve is what will make it possible to get in front of the online giant's path of customer acquisition. Thriving in any channel is directly connected to the ability to expand your innovation bandwidth (doing new things). So how would a business facing significant turbulence like this take action? If the impact is direct and immediate, the organization must first survive to play in the new game. Here are adaptive actions that can sail the ship out of rough seas: ADAPTATION (surviving)
Take inventory of where all resources are directed and current performance (financial and net promoter).
Access the effectiveness and utilization of your current business platform/model (get the facts).
Eliminate what's not working or is delivering a marginal results (people, process, policy and promotion).
Drive what is contributing to your KPIs and execute the critical few strategies that elevate you above the disruptive influences (engagement, pricing, shipping, technology, payment methods, etc).
Sounds simple right? Well not really. The execution of adaptive initiatives can be an extremely challenging endeavor. Whether you use the Four Es or another get-things-done methodology, speed, efficiency and effectiveness are essential to success but changing perceptions or behaviors of people is the highest hurdle to clear. Building the ENGAGEMENT, EDUCATION and EMPOWERMENT of individuals charged with making things happen is foundational to maximizing EXECUTION. After a business is stable and is keeping pace with market change, it's time to thrive. That can only happen with copious levels of experimentation. In my experience, the businesses that do this best are startups. Many new businesses today use a LEAN* model and learn how to evolve quickly. Here are actions that drive evolution: EVOLUTION (Thriving)
Incubate ideas, build MVPs (Minimum Viable Products) and don't wait for perfection.
Clearly establish the indicators of success and aggressively measure results.
Analyze the data and learn what to pivot away from and what needs perseverance.
Align resources to create speed in the testing process (Build, Measure, Learn).
Try what looks impossible.
I think about how a friend and distributor has responded to brands selling directly through the Amazon B2C channel. Rather than conceding and packing up shop, he adapted by offering consumer fulfillment as an added value service to his salon base. Yes, going from picking and shipping cases to single items required some new processes and retooling. How they evolve from that will be determined. There is a misperception out there that only businesses with scale can compete. Not true! Today, even some of the smallest, leanest and most organically structured businesses have R&D, channel and digital strategies that are dynamically advanced and sophisticated. They are the pacesetters in their markets. Mastering the above model is just a discipline but, it will create a culture of evolution and force innovation into every strategy. Remember, it's not the big that will eat the small, it's the fast that will eat the slow. "Perfection is the enemy of innovation!" *The Lean Startup is a book by author Eric Ries that provides a deep dive into how to move at the speed of change. #leanstartup