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know if the House of Cards
experiment would work. It did know,
however, that in order to maintain
the momentum of early growth, it
needed to adapt and reinvent—in
this case reinvention as television
producers as well as distributors.
Internal changes
Reinvention and adaptation can also
be internally focused on systems,
recurrent tasks, or operational
activities. Whether improvement of
this type is based on data from
formal process improvement
frameworks (such as Total Quality
Management) or simply on the
experience and intuition of
managers, internal process
adaptation allows companies to
maximize revenue while also
reducing costs.
The McDonalds McSnack Wrap,
for example, takes staff only 21
seconds to make—the shorter the
preparation time, the greater the
number of customers that can be
served by the fewest staff. At R
Griggs Group Ltd, manufacturer of
Dr. Martens shoes, a reinvention of
internal systems allowed the
company to exploit global sales
opportunities. In 1994, due to the
brand’s growing popularity, demand
far exceeded manufacturing
capability. Poor planning and
coordination led to delayed
production and lost sales. The
solution was a reinvention of internal
systems based around an integrated
IT system. The product itself—the
classic “1460” eight-laced leather
boot—changed very little, although
more designs were later added to
the product range. The key change
was the adaptation of internal
processes, which ensured supply
could match demand.Adapting in a recession
Internal process adaptation is even
more important in markets where
demand is static or falling.
Operational efficiencies, rather
than revenue growth, are the key
to profit. For insurance companies,
for example, scope for new product
adaptation is limited, so competition
is price-based—especially in a
recession, when customers are
particularly price sensitive. The key
to maintaining profitability while
remaining price competitive is
continual process improvement—
the reinvention of internal systems
that deliver the same product to
customers, but at a lower cost and,
therefore, increased profitability.
The days of the door-to-door
insurance salesperson have long
since been replaced by telesales
and an e-commerce approach.Reinventing the company
A notable company that has
successfully reinvented itself is
Samsung Electronics. Established
in 1969, Samsung Electronics is a
subsidiary of the Samsung Group,
which aimed to exploit opportunities
in the emerging technologyREINVENTING AND ADAPTING
Dr. Martens footwear grew from a
niche fashion item to an international
mainstream hit within a matter of years.
R Griggs, the brand’s producer, had to
reinvent processes to match demand.
industry. The company began with
black-and-white televisions and
moved into home appliances during
the 1970s. In the 1980s, production
grew to PCs and semiconductors.
In 1986, Samsung released its
first car phone, the SC-100. The
product was a disaster—the quality
was so poor that many customers
complained. This reputation for poor
quality blighted Samsung for much
of its early life, since consumers
regarded its goods as inferior to
premium Japanese products.
On June 7, 1993, chairman Lee
Kun-Hee gathered senior Samsung
executives and declared that the
company needed to reinvent itself.
His famous instruction “Change
everything except your wife and
children” shows how seriously he
took the situation. Lee also
recognized shifting market
dynamics, telling colleagues that
the company needed to “produce
cell phones comparable to Motorola’s
by 1994 ... or Samsung will
disengage itself from the cell-phone
business.” The “new management”
initiative that followed, supported
by product and process innovation,
put the emphasis on the quality
and innovation that Samsung is
now renowned for, and galvanizedThose who initiate change
will have a better opportunity
to manage the change
that is inevitable.
William (“Bill”) Pollard
US businessman (1938 –)