In studying what the CEOs did whose companies grew the
fastest in stock price, I observed that the following
sequence was followed to achieve that great success:
1. They learn to do one business model reinvention.
2. They decide to do a second business model reinvention
and need to expand the scope of what they consider and
where they get help.
3. They decide to turn business model reinvention into a
repeating activity, which requires a shift in corporate
priorities and attention.
4. Their business model reinvention success propels them
beyond the boundaries of their original marketplaces. They
need new targets of opportunity for their subsequent
reinventions and must begin searching for them.
Here's a brief example of such a sequence by a one-man
business to help you grasp what I'm describing:
Mr. Ray Hughes is a native of the Isle of Man, located in
the Irish Sea. There he learned to be an outstanding golf
caddy. He served up to two golfers at a time by carrying
their bags and providing advice.
Based on how much they liked his service, he could hope to
get additional jobs from the same golfers. If one pair of
golfers wanted to start early and another pair late, he
could potentially carry four bags a day.
Unfortunately, the winter weather in this native land is
bad enough to deter golfers, and work is scarce then. This
way of serving golfers on the Isle of Man was his original
business model.
Mr. Hughes decided to improve his business model. He
realized that if he could find a place where there were
lots of golfers and good year-round weather, he could earn
more money. He decided to move to the Monterey peninsula in
California, home to many famous golf courses including
Pebble Beach. The temperature is moderate there year round,
and winter weather brings mild rain in which golfers will
often play.
Because of the quality of these courses, golfers fill them
from dawn to dusk. As a result, he could work more often.
Further, the prices for playing are very high. Golfers are
interested in having a good experience and value their
caddies more highly than on the Isle of Man.
As a result, his income from each golfer also rose. The
main drawback was that the cost of living is very high in
that area, especially for housing.
The pro shops at these courses often receive requests for
caddies, and encourage golfers to make their own
arrangements. The pro shops usually refer such requests to
caddies who have been praised by other golfers. Because so
many players told the pro shops they were pleased with Mr.
Hughes, he was often recommended.
These introductions became the basis of his next business
model innovation. Many of the callers wanted to have more
than one caddy. Could he help them?
Mr. Hughes is a good judge of golfers and caddies. He
inquired about the golfers who would be visiting and
matched the golfers with compatible caddies. For example,
an inexperienced golfer might be helped by a caddy who had
a low-key personality and experience as a teaching pro to
help the duffer navigate the course more pleasantly and
successfully.
As a result of helping other caddies get jobs, they also
favored him with referrals in turn. That further increased
the number of bags he could carry in a year.
Also, those who liked the caddies Mr. Hughes had assembled
for them would often pay him extra for the service, even
though he asked for no more pay. The pro shops heard
favorable comments about these services as well, and
referred larger parties to him.
Mr. Hughes is a very intelligent, inquisitive, and
interesting man to converse with, and he quickly learned a
lot about the golfers who visited these courses. Many of
them were attending business conferences at the Pebble
Beach resorts. Almost all of the conference sponsors used
travel agents and meeting planners to arrange for meeting
and sleeping rooms, meals, and other resort services.
Mr. Hughes asked the golfers and the resorts whether they
would be willing to let him play the role of travel agent
for these occasions. The resorts and many conference
sponsors who had played with him were happy to do so.
Naturally, Mr. Hughes still organized the caddies, while
adding a major source of income. At this point, he overcame
the high cost of living in the area through expanding his
role from being a person solely providing a physical
service to someone who was also helping make business
conferences more successful.
Copyright 2008 Donald W. Mitchell, All Rights Reserved
----------------------------------------------------
Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of seven books including Adventures of an
Optimist, The Irresistible Growth Enterprise, and The
Ultimate Competitive Advantage. You can find free tips for
accomplishing 20 times more by registering at:
====> http://www.2000percentsolution.com .
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