I recently saw Barrett Ersek speak (he is a great speaker – you can learn more at www.barrettersek.com) and was impressed with his story. I gave Barrett a call and talked to him in more detail and here is what I learned.
In 2003 Barrett Ersek knew how to get his company to the next level – how to create an incredible competitive advantage for his business. However, he had a problem, a problem that many other companies will face in the Coming Digital Age. His employees wanted nothing to do with it.
In 2003, Barrett was running a successful regional lawn care business but was stuck and having trouble growing to the next level. Then he had a moment of insight – at a conference with other entrepreneurs he was challenged to look at his business differently. He uncovered the cost of acquiring a new client as his major obstacle to growth and came up with an idea for how to dramatically cut it. Traditionally, when a new prospect called in for a quote a person was sent to the prospect’s house to measure their yard and then generate an estimate based on their treatable turf area. Barrett’s aha came when talking to some technology entrepreneurs about aerial mapping. Why couldn’t he use mapping technology to estimate and dramatically cut his costs?
Barrett was extremely excited and left the conference early to put his idea into action. However, he ran into one major unforeseen problem – his employees. As Barrett said “everyone said why it wouldn’t work”. The employees had a vested interest in it not making it work, so they fought it. This is a common problem that revolutionary ideas have in businesses and is an important reason why most successful innovators are not the established players. Barrett’s solution was to “hit the reset button.”
To get a clean start he sold his company to a larger competitor and started over again with no sales, no estimators, no trucks and no office. He spent six months figuring out the technology (it isn’t nearly as simple as it sounds since accuracy is critically important) and then in the winter of 2004 launched HappyLawn in a new market. He had all the knowledge and a clean slate. This allowed HappyLawn to sign-up 1,000 customers from a call center in Iowa before even hiring one person or opening an office in their new location. In one year, his new company was the size of his old company and within a couple more years it was five times bigger.
Technology allowed Barrett to take the estimating process from 3 weeks to 3 minutes. It was the people within his organization that was the hard part. As digitization impacts more and more of our society, we are going to see this scenario play out again and again. The companies that can change and adapt to the new realities will win and the companies that let inertia keep them planted in the past will not.
Try this exercise for your business – clear your mind, get out of the office and think about what is possible in your business and industry. Hit the “reset button” even if only for a few hours and try to envision what would be possible if you started your business again from scratch? How would you build it differently if you had no constraints? Why aren’t you doing it this way today?
2 comments:
Great real world example. Pictometry's software actually lets you make these kind of measurements, as well as wall height, even easier. It seems very tru that you can't manage people, but you can manage systems. People are too conservative. It makes you really think about employees you hire. If another great technology came about and he couldn't sell it to his new employees, would he start over again? Keep in mind the type of people you hire. Sometimes it might be worth paying a little someone who is a little more risk savy if you are an innovator.
Hi Fred,
This is a super example. Challenging coventional thinking is the key element to all new ideas.
According to laws of price elasticity an increase in price is accompanied by a drop in consumption (and vise versa). But Heinz discovered this is not always the case. By increasing size of ketchup bottles from 24oz to 36oz they saw an increase in sales with no reduction in buying frequency. Apparently the consumption of ketchup follows its own convention. When consumption was viewed side by side it was discovered both bottles emptied at the same time. Turns out kids just use more with a bigger bottle. The replacement of 24oz with 36oz helped Heinz increase ketchup sales 13%.
Rishi
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