Modern Business Challenges are About More than High Tech
We at Mobus Creative Negotiating put the word “creative” in our title because that is such an important part of modern business challenges: coming up with new ways to address old problems. Our materials emphasize the importance of approaching negotiations not only as a way to get a better price but also as an opportunity to discover new opportunities and new ways of doing things.
“A new way of doing things” is exactly what is shaking up a number of consumer businesses, from razor blades to eyeglasses to mattresses. The “direct-to-consumer” revolution is being led by firms which don’t just make a better product: they have a totally different way of getting their products to consumers. A new book, Billion Dollar Brand Club: How Dollar Shave Club, Warby Parker and Other Distruptors are Remaking What We Buy (Henry Holt & Co., $30) by Lawrence Ingrassia, tells the story of the hungry entrepreneurs who realized that legacy brands were resting on their laurels – that in the modern world, it was possible for the manufacturer to also sell directly to the consumer. Ingrassia describes how Gillette executives pooh-poohed the Dollar Shave Club, certain that people would always buy razor blades at supermarkets and drug stores because that is what people have done for decades. What has made Warby Parker special is not some technological breakthrough but rather a new approach to doing business, namely, integrating the entire eyeglasses process, cutting out layers and layers of middlemen to go direct to the millions of people who use the product.
Ingrassia tells how those who started the direct-to-consumer firms were creative people who could see things in a totally different light. Rather than just considering how to shave costs and get better prices, they looked at the bigger picture: who is the ultimate customer and what are they really after? As negotiators, we should often pause to think about those bigger picture questions, to consider if there is some entirely different and better way of going about things.
It is not clear how successful the direct-to-consumer firms are going to be. Some of them seem to struggle to make decent profits. But what is clear is that they have dramatically changed the business environment facing the legacy brands. In other words, the story of direct-to-consumer firms is not a story of opportunity seized but of long-established position lost. Part of our job as negotiators is to keep our eyes open for game-changing approaches that creative people are trying to get off the ground, so that our firm can be prepared rather than caught flat-footed.