How do companies evolve? Passion for what you create, commitment to core values, and thinking long-term.
I am often asked this and other questions by leaders in order help them overcome a particular problem. More often than not the answers to questions they may have are not something they want to hear. Getting to the heart of the real issues they are concerned with often involves thinking critically about what they and their organizations are passionate about creating. Several of the companies in this post have tough choices ahead.
In a bold move, Playboy magazine recently made the decision to stop publishing nude photographs. What would happen if other major brands that have been struggling made a similar change?
How would these established businesses retool their existing company infrastructure to create new sources of value? I'm not referring to a proportional jump, but an exponential leap in their evolution which is often required when old business models are no longer producing value. A recent Fortune magazine article highlighted that McDonald's, Barbie, Fisher-Price, Kraft Macaroni & Cheese, and Diet Coke were having trouble. Here are a few thoughts on each:
They are facing stiff competition from upscale burger chains and from other restaurants that customers perceive as healthier. What if McDonald's shifted out of the fast-food business or reduced their menu to only a few items; get into the hotel business; develop a social mission for each branch to solve a local problem--the restaurant becomes a center for community action; each restaurant becomes a local technology center--it supplies people with free or inexpensive access internet, phone, or technology services; it becomes a library; the parking lots around the restaurant are turned into community gardens or for use by the restaurant--perhaps part of a push to locally source food.
I believe the interests of girls have changed over the last few decades. They seem to be taking steps in the right direction with introducing diversity and technology themed dolls which is something that may appeal to millennials. Regardless, I would ask what is the purpose of the doll? What does this brand stand for? Does its purpose still reflect the needs and interests of its customers? Superficial changes in how the doll appears may not be enough to gain the support of existing and new customers.
I simply find that there are more interesting toys being produced by smaller companies. I live in a city, have small children, and tend to shop in a local, independent toy store or on Amazon. I understand that this may be different than what people experience in other areas, but I rarely find Fisher-Price toys on the shelves of the toy store I frequent and I go to Amazon looking for specific items that I can't find in the store. Perhaps Fisher-Price moves away from making toys altogether and shifts entirely to creating accessories for infants and young children. Or, what if they commit to spending half of their time operating maker workshops in communities across the country to teach children how to build their own toys?
4. Kraft Macaroni & Cheese and Diet Coke
The common theme here seems to be that the products simply aren't healthy. Kraft has taken action to remove artificial coloring and preservatives and that is a step in the right direction. This is a radical suggestion and pure speculation, but what if both companies ended production of Macaroni & Cheese and Diet Coke altogether? As part of this effort they could redirect their respective company's efforts into helping people in their communities to develop the capacity to farm or even commit to delivering clean water to them. Opportunity exists for corporations take action at the local level to help communities innovate or solve social problems.
How the major brands listed above evolve will be interesting to follow and the outcome should be closely watched by other industries.
Who is to blame? It's hard to pin it down on one thing in particular. I often see that established brands lose touch with who they are serving and what their customers need. They need to reestablish their connection with their customers. Do people know who or what Kraft really is or what they stand for? The challenge is that building new relationships with customers is not simply accomplished by redesigning a product or its packaging, or even coming up with a creative marketing campaign. People want to connect with the brand.
Alternatively, I am keeping a close eye on Dyson and its plans for the future.
This article lays out the history of the company, their recent acquisitions, and how they are transforming into a technology company. It's an informative read. Here's a key quote at the end of the article by Jake Dyson, son of founder James, regarding the Internet of Things:
Are McDonald's, Barbie, Kraft, Fisher-Price, and Coca-Cola excited about their products?
The answer to this question may offer clues about how they need to move forward. Regarding Dyson, staying focused on its core strengths of "building durable, innovative products" will help it succeed in the long-term. This is a valuable lesson for all organizations.