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Innovation Involves Risk #8-28-12 (Example) Newsletter #132

Posted by Douglas A Wick on Sun, Sep 9, 2012

Every business leader faces the currents of change.  Today’s business environment is full of sweeping changes from social media to health care reform.  describe the imageMaking good decisions in these challenging times requires leadership that listens to their employees and customers for feedback and then has the courage to change. The following is an example of one of my clients who has consistently beaten challenges and recently made a remarkable innovation that required considerable risk.  First a little background on All County Music and Fred Schiff’s leadership capabilities.

Hurricanes, recessions, big box competitors, Fred Schiff of All County Music has faced it all. With each challenge Fred has learned lessons, remained true to his principals of foundational business practices and weathered the storm. 

Hurricanes are part of the weather challenge that every business in the southeast coast ofFloridaface. In the mid 1990’s what’s been called the chain store blitzkrieg era, a large competitor, Mars opened a location 7 miles from All County Music’s main location.  In quick succession Sam Ash and Guitar Center opened as well close to them, all large chain stores with major muscle to hurt Fred’s core business.  And they did, in fact more stores opened to compete with All County and each time Fred noticed as much as a 30% drop in his monthly retail business.

All this activity gave Fred many sleepless nights, but instead of sitting back and taking the next hit, Fred hit back.  Band rentals and supporting school band programs has been the backbone of All County Music’s business.  That’s where Fred focused.  He developed a plan that met or exceeded the school rental programs that Mars provided solidifying his position with school instrument rentals. 

The chain stores came after his people, and instead of allowing them to leave Fred counter offered effectively, not losing a single key employee to his competition. 

In Leadership Requires Vulnerability we discussed the importance of the business leader being vulnerable in discussing their weaknesses and mistakes with their leadership team and staff.  Fred is no stranger to the courage required to take risks and initiate plans that may not have predictable outcomes. 

In early 2011 Fred put together a plan to remodel his Tamaraclocation showroom, designing a custom-made maple cabinet, hardwood floors and glass doors to reveal his latest specialization project, Florida Flutesdescribe the imageFred intuitively understood (quoted in an article from Music Inc), “There are certain parts of the market that want to be niche, where [customers] want to experience something they can’t get somewhere else.”  Investment in this innovation was $10,000 not including his stock.

It was a bold attempt to predict where the market is going.  Fred anticipated that excellent band students were looking for a business that could serve their individual needs.  To help them improve their sound and performance by offering step up flutes, accessories and service.  “It’s a group of musicians who really want to fine-tune and be able to play different options.  …once parents hear what their children are playing and how it makes a difference in their sound they’re going to be more apt to purchase that and understand the difference between a $5,000 and a $15,000 flute.”

Has Fred’s innovation been right?  Fred’s Florida Flute’s project got up and running in January, including a website dedicated to this instrument specialization.  Through the middle of August flute instrument sales alone had nearly exceeded the forecast Fred had made at the beginning of the year.  describe the imageAccessory and flute service repairs have far exceeded is projections.  The initial investment has been earned back.

It should be pointed out that Fred is a master at developing relationships.  Whether it be a drop-in customer or a flute instructor from a local college or university, Fred’s empathetic approach and concern for doing what is in the customer’s best interest builds immediate rapport and develops long term relationships that grow raving fans and a strong referral base. 

Fred also understands that a business is built through the service after the sale, and he’s committed to meeting his customer’s service needs with a dedicated group of service technicians that are expected to meet very high standards in terms of quality and quantity of performance. As part of the company’s dedication to Florida Flutes they’ve set aside a dedicated bench solely for flutes.  Florida Flute customers are given tours of this section of their service department to ensure they understand the commitment and security they will have for their flute when purchasing it from Florida Flutes.

Again Fred backed his innovation with a commitment to his customers, “If you’ve got a $20,000 flute, you don’t want to put it in the mail for service.  You’d like to bring it somewhere.  And if it means you have to travel a couple of hours to do that, that’s certainly better than having to ship it.”

Building your business requires risks.  Fred Schiff at All County Music understands that vulnerability is part of any business owner’s life.  He’s already planning his next innovation niche move for his business, a similar  move like Florida Flutes but for a different instrument.

Is your business innovating at a pace that anticipates and beats your competition?  Strategic Discipline offers a valuable set of meeting rhythms that offer customer and employee feedback as the backbone of weekly meetings. These feedback areas offer many options and opportunism for innovation if we as business owners take the time to listen. 

Is it time to improve your system for innovating and gather ideas on where your opportunities are? 

Topics: Customer Feedback, Employee Feedback, weekly meetings, Strategic Discipline


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