How do companies actually change?

oldest advertisement hapu the weaver clickbait

Everything changes and so do companies.

Companies are teams of people which offer value to customers in exchange for the revenue. Each company has its own business method how it offers values and generates revenue. A business method consists of rules, processes, resources, etc. Only real change in a company is a change in the business method.

A business method can change in two ways:

1) Maintaining values – business method changes so values remain the same but the efficiency of production, marketing, and sales is changed. For example, a shampoo can be unchanged for years offering its customers always the same values, but the production, sales, marketing and other processes which deliver the shampoo can change completely in order to improve company competitiveness.

2) Changing values – business method changes are made with a goal of changing the values. This is a case in which a company tries to become more competitive by offering new values or getting rid of values which increase risk. For example, a new feature is added to a soft drink so it can target athletes. This value and customer change requires product, production, marketing, and sales changes.

All companies must change constantly to maintain their values but only a few companies sometimes must change their methods so the values are changed.

One of the more common situations is that some parts of a business method must change and some must remain unchanged. Marketing especially is an agile and rapidly changing activity, while sales and production are not so agile and their changes are perceived as high risk.

In all cases biggest driver for business method change is technology. Once technology sets a new standard in either values or efficiency, companies must adopt it.

There is one thing that actually never changes – the effect of well-written copy – or any other rules by which customers accept values. The oldest advertisement by Hapu the Weaver from Thebes from three millennia ago proves it :)

Written by: Nikola Tosic
Publishing date: 7 Jul 2017