What Business Are You Really In And Why It Matters
The question seems simple enough, but for such a simple question so many get this wrong.
Let me add some more context to this if I was to say what business is Red-bull most would immediately say ‘Energy Drinks’ when the reality is they aren’t, Red-bull is actually in the business of helping people live to their max.
The same can be said for Nike if you ask the masses, almost all asked would say Nike is in the business of making trainers, yet the reality is they are in the business of helping you unleash the athlete within.
And this Unbeknown trend runs through all major corporations throughout the world, take McDonald’s for example, many would assume that McDonald’s is a fast-food business, most people don’t realise that the McDonalds business model isn’t a burger-flipping franchise, but one of the worlds best real estate portfolios.
The individual stores sell the burgers and McDonald’s owns the commercial property, which is valued to the tune north of $8 billion.
The former CFO of McDonald’s, Harry J. Sonneborn said
“We are not basically in the food business. The only reason we sell hamburgers is that they are the greatest producer of revenue from which our tenants can pay us rent.”
It was back in 2007 when Apple dropped ‘computers’ from their brand as they begin to aggressively push into the phone business, which subsequently now provides around 85% of the companies revenue.
So why is this important to your business? Well, it’s when companies have an identity crisis that things begin to fail, you need to be wearing two hats in the business.
1. The business you’re right now,
2. The business you need to become.
Recently a keynote from Amazons Jeff Bezos discussed how he and his executive team don’t focus on things that happen right now, they focus 1 – 3 years ahead of time. The greatest leaders are incredible visionaries and they can spot trends, shifts, and plan for them.
So the task for you is to spend some time really digging deep into your business and identifying what business you’re really in, chances are you will be surprised.
An example of this would be to look at a company like White Star, a juggernaut of the shipping industry, however, had they thought about their business differently, rather than being a global shipping company, what if they asked what business are they really in. What if they were actually in the global people-moving business, it’s quite possible they would have been one of the first to fly people around the world.
Instead, it collapsed into a merger with once chief rival Cunard. As a lasting reminder of the once prominent shipping line, modern Cunard ships use the term White Star Service to describe the level of customer care expected of the company.
So let me ask the question again, What business are you really in?