In the words of Will Rogers, “Even if you’re on the right track you’ll get run over if you just sit there.”
It’s nothing new when I say that the office furniture industry has become highly dependent on technology; both for new products to sell and for products and programs to run its companies. Virtual collaboration tools from companies like Yulio, KISP, MS Teams, and Zoom should have a huge impact for some time to come. Groups, like INDEAL, offer their members innovative tools like Pinpoint Search and VIP so they can quickly show their clients complete environments and also speed up product searches and selection.
These are innovations that address the needs of dealers and customers; but let’s take a look at innovation and how it affects companies; good and bad.
I often like to start by defining the terms:
- A new method, idea, program, or product.
- A new idea, method, or device: novelty: the introduction of something new.
- The application of better solutions that meet new requirements, needs, or existing market needs.
Most dealers and manufacturers understand that today’s office environment is continually in a state of flux. Many products and services that were once important have become outmoded or obsolete. I have two examples; one product and one service:
- Corner worksurfaces
- Electrostatic painting
At one time both of these were innovative and staples of the industry; as well as very profitable to sell. Today? Not so much.
Manufacturers and dealers both need to be vigilant about studying the way people work in today’s corporate and home offices. Neither can become complacent and think that what they’ve been doing will continue to work in the future. Innovation is critical and can drive up profits…but it can also come at a price if it isn’t thought through, evaluated, and implemented properly.
From about 1995 to 2000 the Nasdaq rose five-fold as everyone was trying to cash in on an exciting new innovation; the internet. New dot com companies sprang up every day in every industry. Venture capital was being thrown around left and right. The new dot com companies caused the price of office space to skyrocket and products flew off the shelf as they tried to furnish and populate these spaces. Then it all came crashing down. Things began to take a downturn in September 2000 and in short time the Nasdaq dropped 78.4%.
There are other reasons for the dot com bust besides the stock market and the overvaluation of these companies. I believe one of the primary reasons was the lack of a sustainable business model. Many of these dot com companies were selling concepts and interesting ideas but in reality, most were just “smoke and mirrors”… part of the “gold rush” mentality or wild speculation driving the market at that time. They had nothing substantial; something that had a long shelf life; but they were innovative.
Some of them did in fact have products or services, but they didn’t meet the test of sustainability and therefore met the same fate as many other companies. What did they do wrong? Many of these companies had very limited offerings or focused on niche markets that were too small to sustain their business for very long. Other companies developed products that were outdated very soon after being released…either they didn’t have any other product to replace it or competitors had already come out with a newer upgraded version – a major problem for any technology-based company; but as suppliers to today’s businesses, are we so different?
There were some companies that were able to survive. Why? They had a sustainable business model. They did a better job of defining their products and services to their customers in terms that applied to them. They looked at the uses, advantages, and values of the products (and services) they sold based on the client’s needs. A company’s business model must spell out and define the reason they are in business and that they must-have products and/or services that enough other people or companies will value…and for more than just a few years.
Manufacturers and dealers need to understand, from the customer’s or decision maker’s point of view what is important. Many dealers get caught up selling the “sizzle” and not the “meat.” Is the product they are offering the right one to use for their customer’s purposes; now and into the future? Do we know? Did we even bother to ask? What advantage will they realize buying this product from the dealer; regardless of how innovative they think it is. Do the dealers know how to identify and present the advantages in terms that are meaningful to the customer? What value will this product or service give the customer? It seems so basic: Sales 101. Ask good questions. Involve the customer. Understand their needs. They will generally tell you what they want when asked.
Many companies are trying to learn how to do more with less…fewer people, less overhead, smaller facilities. They are realizing the need for operational flexibility. One way for office furniture companies to show their innovation and to endure is to understand and educate themselves and their clients on the best ways to do this.
“The winners in the ‘new economy’ will be those who know how to address the problems posed by scarcity of resources.“KyEkinci
It is important to study the past so that we can understand and start to predict the future. I read an article that discussed the drivers of innovation and growth from the 18th century to the present and then beyond. Starting in the 18th century through the early part of the 20th century, Industrialization was the driver. Think about the cotton gin, small factories; companies like Ford Motors, and Singer Sewing Machines. In the mid-20th century, the driver was Globalization…Walmart, McDonald’s; even companies in our industry like Steelcase and Herman Miller are now worldwide companies. Digitalization burst onto the scene in the latter part of the 20th century. What companies are not found on the Web? According to the article, the next driver will be sustainability. Products and services that help clients sustain/maintain their businesses and assets.
Innovation is important and dealers need to change with the times by embracing new products, technology, and services. My final question for you to consider is probably the most difficult one and can’t be answered with a simple yes or no… How long do you want this business to be sustained? The answer will impact all of your decisions.
Jim Heilborn is INDEAL’s Training and Development Consultant specializing in the office furniture/products industry, working nationwide with dealers, manufacturers, and service providers. Jim has been associated with INDEAL since 2011, focused on training and dealer development. Jim can be reached at email@example.com.