To experiment or to be stable?


It is difficult question for most of the companies which would like to differentiate themselves from their business environment and especially from their competitors. Unfortunately most of them are afraid of change and risk connected to it. I am luck to have experience in both types of companies – I have worked for 6 years in the company which is stable and it works for it well and now almost 3 years in company which is in constant change.

safe busines

When stable and when to experiment

Your strategy is always assigned to the business you are doing and expectations of your customers. Of course customers are rarely expert so you can not ask them what you need to do. You have to ask them what kind of issues they have and based on that you need to figure out how to design your business model. In first company I was product manager responsible for leader in AV in our country. When I was leaving ESET had over 45% of market share in Poland. As this is software licensed in annual subscriptions customers expect stable pricing and clear business model for resellers. As customer who bought license will renew it after at least 12 months resellers wanted to be sure what will happen that time. Now I am working for company who has much wider portfolio and most of our sales is hardware or software with liftime license. In this model you can (and should!) be more aggressive as resellers are interested in high profit in this one transaction. Looking back previous company I would say that we could have much more experiments and compete much more aggressive with competition. Maybe then we would have much market share..

How to compete

Unfortunately most of customers and companies think that the only compete is technology and price. So or you have similar technology but better price or you have similar price but better technology. Of course where two are fighting, the third wins. When we come back to 2006 when Nintendo announced its Nintendo Wii there were only two players on the market Sony Playstation and Xbox. Both were competing with technology and efficiency. Wii did not have any of those and Nintendo decided not to compete with them. Instead of that they targeted their product to customers who didn’t need best technology and high price but they expected to have fun. Nintendo introduced totally new remote Wii Remote which was something great for the masses who wanted to spend their time playing with the family.

New customer segment is solution?play-doh

Of course segmentation is very important in every company. Being aware who is you customer and why certain segment are using your products or services is very important. Knowledge is power because only then you can make wise decisions. Of course we do it backward and having good service we can think which customer segment will benefit most. In mid 50’s there was product named „Kutol” which was used for cleaning wallpapers. Unfortunately it was’t best idea of this family company and they were almost bankrupt. Fortunately one of popular magazines wrote at that time article about using such product for Christmas tree decorations. One of the workers tried that that in local kindergarten and it worked. Company changed some detergents to pigments, added nice smell and called new product „Play-Doh”. Probably most of your kids were or are using it. Current companies should also not only look at technology or price but to be winner on the market you have to think differently. You need to offer customers new values which will be unique.

So what should I do?

Think differently and act differently. Be open minded. You can not expect different effect from the same actions. As I wrote before clue for change is customer and his needs. We need to investigate them and create totally new offer for them. Unfortunately problem is deep in our companies. We are creating milion of procedures and are awarding those workers who are the best following them. Unfortunately most of companies do not reward those who are creative and try to be innovative. We hire people who fit to our environment and can be easily managed. Steve Jobs once said „It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.” We need to create space in our company not only to follow important rules but also to experiment whenever it’s possible. It is very important to create such safezone where we can experiment. Allow people to make failures but also to learn from them, improve and try again. This means compete for me – it means to try and not be afraid of it. Jeff Bezos has written one of most famous letters to stakeholders in 1997 where he describes what company does to innovate. I believe that every manager should read it and act like that. [LETTER].