If you’ve ever leg wrestled, you know it can be fun (among other things), but only under the right circumstances. You’d never want to do it on a nest of fire ants. Their bites would hurt far worse than almost any outcome from leg wrestling. If you absolutely had to wrestle on that nest, you’d put it off as long as possible. When you finally got started, you’d get it over with as quickly in order to minimize the pain and suffering. Making major changes in your business is not terribly different.
Kicking the can
Have you ever put off implementing a major change in your business that you know you have to make? If so, was it because you knew it was going to be difficult? Did you kick that can down the road because you weren’t sure if the change was going to work? The thing is, if you know the change needs to happen – it doesn’t matter if you aren’t sure about its chances for success. The mere fact that you know it needs to be done is a sign that your business is at risk. What’s scary is that you know deep down that not making the change is riskier than making it. But still, you put it off, which has a tendency to increase the risk.
With difficult things, the first step is usually the toughest. Sometimes the hardest part is making the decision itself. Once that’s done, many of us will focus and start to execute. You may find yourself wrestling with the fear of “breaking” your company, but if the position you’re in has you thinking about this, it’s probably already broken (if not badly bent). In these situations, waiting long enough (ie: too long) will cause someone or something else to make the decision for you.
A good example of such changes can be seen in the volume of businesses that have to re-examine how they get paid. It was incredibly rare 20 years ago for a company to use a subscription business model – except for newspapers, magazines and the like. Changes in advertising such as the loss of traditional classified ads, and the rise of digital marketing changed those markets. That, combined with a lot of foot-dragging re: the process of migrating to digital publication destroyed or significantly weakened many of those firms.
Many of these same changes have spread to businesses with traditional business models. Today, it’s steadily getting to the point where a non-subscription-based company is a rarity in many markets. While not all companies fit that model, those that depend on an ongoing creative and/or maintenance effort have little choice. The economics associated with buy-once, support-forever business models simply don’t work well in many markets where content and/or technology changes daily. They never really worked all that well in software and other rapidly changing markets, but the expansion of these “new” markets from zero to cloaked the economics for years. There was always a new client around the corner because of the growth from ground zero to whatever normal market penetration was for that market.
Blow it up & build it again
Today, many companies that were built over the last 20 years are find themselves struggling with the idea of moving to subscriptions. This, despite the fact that the economics are clear. The challenge for these companies is not only to migrate to subscriptions (or something other than front-loaded revenue models like buy-once-support-forever), but also to adjust their operations to a regular, well-planned deployment of value in the form of updates, fixes, and features over time. Without regular production in some form that produces recognizable value your customers want and need, subscription businesses will struggle to keep subscribers, and find it difficult to grow, particularly when competing with companies using low friction, subscription pricing that makes it easier to buy.
The changes may seem insurmountable, but the choice is clear: If you don’t blow it up & rebuild on your terms, someone else will force you to do it on theirs. Decide whether to live or die, knowing that no decision is still a decision. You simply have to make the decision, plan your execution, and press the start button. It will be hard, but not as hard as watching your market share shrink because you can’t fund the product development work needed to catch up, keep up, or ideally, move ahead. You get to decide your path.