Business, government and education are all undergoing fundamental change which is being driven by a number of key factors. If we look back 50 years, the manufacturing model was driving our economy, was the focal point of government and was the topic of higher education. The focus was on product. If we look back 20 years, we witnessed the manufacturing driver being replaced by service. The service model was driving the economy, was the focal point of government and was the new topic of higher education. The focus was on service.
Today we are witnessing an economy that is stagnant, some federal and state governments unable to meet their debt obligations or continue offering services, businesses that are struggling to survive and many higher education systems in financial turmoil. We also hear some businesses are having good revenue and profit growth and some educational institutions experiencing growth and prosperity. There are a number of reasons for these successes. I suggest that if businesses, governments and educational institutions do not recognize these reasons and do not implement changes they are highly likely to fail, go bankrupt or close down altogether. I also suggest that embracing the “new model” is perhaps the only way to survive.
To understand why some are succeeding and others dying begins with the recognition that the very concept of quality and value has changed. Yes, consumers still desire quality and fair pricing, but moreover they desire convenience. In some sense the consumers’ focal point has changed from a manufactured product to a services provider perspective and now is fully evolving to a convenience and cost perspective. Value has been redefined and while the definition still includes quality at a fair price, convenience is the overriding factor.
Convenience is driven by and is the result of technology. Understanding how powerful convenience is becomes a matter of life and death for all sectors. Convenience influences choice, provides greater market share and ultimately impacts profitability. Convenience is now what is driving success and providing cost-effective delivery of products and services. Convenience and technology have reduced the need for capital investment while meeting the needs of the marketplace. Convenience saves time and focuses on bringing the product or service to the market or consumer, in contrast with the old model of having them come to the provider. Convenience is the major component of the new model.
We all admire and often adhere to tradition or the old model. To survive, we might wish to just admire it with respect, but not adhere to it. For if you do not change and meet the needs and demands of the market, you will be gone — no longer a tradition but a memory.
The new model focused on convenience is emerging everywhere and has been for a number of years. We just did not realize its force, size and the overwhelming demand for it. Some have and will for a limited time resist the new model. They will not be here in the future. Some examples of the new model include online-based delivery of products and services, bringing the product or service to the market. Then there is outsourcing, or finding a less expensive way to have a portion of one’s business provided by another more efficient entity.
The new model seeks to avoid heavy capital investment in facility and focuses on technological innovation. The new model reduces labor costs through self-service wherever more convenient for the consumer. The new model focuses on providing more services and customized options for the consumer. The new model eliminates duplication while retaining specialization. The new model embraces change, instant response and flexibility.
The new model is all around us and includes rapid response order systems through Internet websites, highly successful online universities and educational programs, computer-modeled and managed distribution systems, cooperative linkages for marketing and purchasing. It involves new electronic media applications that improve communications, research, the design process and even medical care.
It is now time to take a very close look at your business, government services and functions and our educational systems. We must re-evaluate our investment strategies. We need to focus on what components, if not all, that technology and the new model offer that will keep us competitive in the convenience era. What can we do or do better to ride this wave to success?
Finally, I hope this article opens up the thought process with respect to opportunity, entrepreneurship and job creation. Can Maine become the incubator of products and services that fuel convenience providers? Can we redeploy assets both human and financial? Can we be more cost efficient and create more jobs? Can we find alternatives to capital intensive projects that result in more costs or debt? Can we ride this wave into a new future for our state?
Ronald A. Nykiel, dean of the College of Business at Husson University, has a number of books on travel and tourism marketing and served on a presidential commission on travel and tourism, the Board of the United States Travel Association and on a governor’s revenues forecasting commission.