Leaping Into the Future: How One Company Threw Off the Shackles of the Past To Survive and Thrive
Remember when buying a CD meant going to Tower Records? When watching a movie at home meant trips to and from Blockbuster? When buying a book involved driving to Borders Bookstore? And one of the worst, remember buying electronics required dealing with aggressive salesmen at Circuit City – you had to trust them since most of us knew nothing about electronics? Of course that was before iTunes redefined how we buy music, Netflix and Redbox changed how we rent movies, and Amazon replaced bookstores and electronics stores with on-line ordering convenience. And now, we the consumer, know enough about routers and USB ports and the like that we don’t need pushy salesman’s advice!.
In the rapidly changing world of retail, everything has been moving toward the Internet, and those who smugly think that they won’t be affected because they offer products that aren’t cost-effective to ship, should think again. The universal use of 3D printing is right around the corner. Already, companies like Boeing are using the technology to produce parts for their 777 air liner. Consumer 3D printers are now only $1299. Given how ubiquitous 2D printers have become over the last 20 years, it won’t be long before buying a toaster for your kitchen will just be a matter of downloading the software to print it out on your own 3D printer. I do hope the bread industry keeps up…can you toast analog bread in a digital toaster?
Those are just the types of changes taking place in manufacturing and product sales. What about your industry? Seen any changes lately?
So how does a company avoid going the way of Tower Records, Blockbuster, Borders and Circuit City? I posed that question to Josh Clement, the CEO of Soundview, a company with whom I’m collaborating to produce a series of on-line training classes. Soundview was founded in 1978 by four advertising executives who were interested in business books. Their original purpose was to publish and sell book summaries to business executives. Subscriptions were sold through direct marketing via the US Post Office, and the newsletters were delivered by the Postman as well.
The timing was perfect. Interest in business books was increasing dramatically as Baby Boomers took over management positions, and Soundview flourished. By the time Josh’s father purchased the company in 1992, Soundview was the premier publisher of this genre of book the book world, with distribution around the world. This success continued into the 2000s, but when Josh took over the company in 2005, he began to worry. Even though business was still good, with record subscriptions and profits, he knew that the whole world was moving toward the internet and that information published on paper and not accessible via “the cloud” would soon become obsolete.
Soundview already had an on-line presence, offering electronic book summaries, but it represented only a small percentage of their subscribers. At Josh’s urging, his executive team started to expand their on-line presence by focusing more energy, marketing efforts and money on increasing digital subscriptions.
Then a pivotal change occurred: the crash of 2008. Within months, both their on-line and paper revenues declined so rapidly they actually thought there was something wrong with their computers. They didn’t think it was possible for the market to drop so far, so fast – but of course it was. It forced Josh and his team to take a new look at where their business was going and if it would even survive.
Josh told me that the turning point came when he met with all his employees and presented the gloomy facts to them. He showed them the numbers and the economic forecast they implied. He then asked what they thought the company should do. Over several meetings, brains percolated and ideas started emerging. They decided that they should get out of the paper publishing business altogether and focus all of their efforts on the on-line enterprise. They also decided to diversify by diving head-first into multi-media, audio books, audio summaries and video training – all on-line.
Doing this was no easy feat. It meant everyone had to relearn their job. Josh cited the marketing manager, Jim, as an example. A baby boomer who had started with Josh’s father. Jim had been trained and had worked his whole career as a direct-mail marketing guy. No one knew that craft better than he. Now, after twenty years, he faced the daunting task of learning internet marketing instead. This required a huge change in technical skills as well as an all new mindset. Josh said that Jim jumped into it with both feet and within a few months was proficient. Today, Jim runs all their marketing efforts through email, LinkedIn, Facebook, and Twitter.
It also meant shutting down their printing operations and laying off people who had worked for the company for many years. Some were second-generation printers whose fathers had worked for Josh’s father. Josh said it was the most painful day of his life. I could see a tear well up in his eye as he told me the story.
Today, if you walked into their headquarters in Kennett Square, PA, you’d never guess Soundview was once a printing company. Combined with an ultra modern office motif that reminds you of a Google or a Facebook office, there are state-of-the-art audio and video studios. Any remnants of the old-fashioned newsletter business are gone.
Better yet, their profits are soaring. Josh would not share those numbers with me since they are a privately held company, but he assured me that they are doing better than they ever dreamed was possible.
So I asked him what his secret was to leading such a successful transition. Stuff like this is not easy. We all know that people tend to resist change. He said that he gives credit his own fear and insecurity about doing the right thing in responding to the disastrous situation in 2008. That led him to ask his people for ideas and being willing to listen. He said that it was this transparency and trust that made all the difference. Everyone realized they were all in the same boat and the only way to survive was for them to all pull together.
Josh said that today, if an employee is asked at a cocktail party what Soundview does, it wouldn’t occur to him or her to say they are in the newsletter business. Rather, they are in the business of providing useful digital information to business professionals.
Maybe Tower Records, Borders, and Blockbuster could have taken some lessons in mastering change from Josh and his team.Pages: