Your business doesn’t always need to change

By now, the idea that organizations must adapt to maintain both relevance and market share is so ingrained that it’s been reduced to pithy sayings. 

But is constant adaptation always the best policy? Not necessarily, according to Andrea Coville and Paul Brown, co-authors of the book "Relevance: the Power to Change Minds and Stay Ahead of the Competition," in a recent Harvard Business Review blog post.  

They recommend any firm considering a change initiative should first answer five questions:

1. Do your customers really want you to change? 

The offerings from privately-held Berger Cookies in Baltimore have been the same for 179 years. The company’s continued success shows that people crave consistency. When you taste your favorite cookie, you don’t want to suddenly discover that the recipe has changed.

2. Will change alienate your base? 

Earlier this year, executives at Sirius Satellite Radio decided to capitalize on the renewed interest in singer-songwriter Billy Joel by creating a temporary channel dedicated to him and his music. But it replaced one that had played music of the 1930s and ‘40s, prompting customers who enjoyed those classics to cancel their subscriptions.

3. Will you confuse people? 

If you bounce from one strategy to another and back again, people won’t know what you stand for. The recent failures of mass-market retailers Sears and J.C. Penney are clear examples of the problem with inconsistency.

4. What is the cost? 

When remaking or radically changing your offerings, you must always weigh the risks against the rewards. This is a lesson Starbucks learned the hard way in the late 1990s. To expedite its expansion, it started shipping its coffee in flavor-locked packaging, which was more efficient but also eliminated most of the aroma; it also streamlined store design to gain economies of scale. But the result was “the watering down” and “commoditization” of the Starbucks experience, founder Howard Schultz later reflected. The company struggled and its stock price fell, until Schultz reversed those decisions.

5. Will the change make you vulnerable? 

When you add to, or alter, your offerings, you can open the door to competitors. For example, Cadillac decided to offer a smaller car, the Cimarron, in the early 1980s. The diluted management focus, coupled with the car’s poor sales, hurt the brand and allowed competitors — especially luxury imports — to gain market share.

“The point here is simple: Your customers will dictate when and how much to change,” the authors write. “Keep asking them what they want (we recommend a formal or informal audit every six months) and keep watching their behavior, since they aren’t always able to articulate their desires. Then change as they do, or just a little bit faster.”

Read more from Harvard Business Review.