Change – opportunity or opponent? . . . By Director Wayne Hall

July 31, 2007

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Change can often present so many challenges, and if the past ten years are any indication, it would seem that the number of times the business music market requires us to change the way we do things will continue to increase. Developers are continually pushing the boundaries in terms of new software and firmware features, operators are looking for ways to improve efficiency and the scope of their services, and customers will continue to want more value and excitement from product.

The demands on all parties in the business music market (developers, manufacturers, content suppliers, operators and content-users) that can occur as a result of change can literally be business-threatening.

There is no shortage of businesses in our markets (such as DJ’s, Juke Box manufacturers & operators, Music Service providers) who are no longer with us because of their incapacity to respond to changing market conditions; and this is despite the fact that most of the change which has taken place has been fairly predictable.

Is it the change that is the threat, or our attitude towards change?

Our experience when dealing with businesses who have struggled coping with change is that one (or all) of the following attributes have prevailed - namely that management:

(i) have fought change all the way, often to the point of total denial.

(ii) while recognizing change, all but hand the responsibility for coping with it to others in their business who are not equipped for the task (often their developer).

(iii) go into “panic” mode – the “end of the world as we know it” syndrome.

To some extent, we went through each of these scenarios here at SBA, but fortunately pulled ourselves out of each of these conditions before they destroyed us. It wasn’t easy, but we learned a lot from the experience and it has resulted in our current “customer-centric” focus.

Of all the markets to which we supply, the juke box industry supplies some fabulous examples of how response to change can dictate the success of a business – or otherwise. The supply landscape in this country was dominated by three or four major global suppliers of juke boxes up until ten years ago. Where are they now? Most succumbed to condition (ii) above; ie. management placed the future of the business into the hands of software developers, and forgot or refused to go to the market (operators, venue managers, “punters”) to find out what features would be valued when they built their new digital juke box. The result was a series of disastrous product launches, culminating in the loss of market share for these manufacturers and their Australian distributors – with negative “knock on” effects for a large network of operators. Along the way, the Australian distributors themselves sat as if paralyzed, placing their fate with developers and management thousands of miles away, hoping that things would work out. They didn’t.

There are a many lessons we can learn from the juke box experience, including:

(i) Change doesn’t go away – understand it and embrace it.
(ii) Change always offers opportunities. Exploit these constructively and with full responsibility for the outcomes.

While change feels rapid, all encompassing and overwhelming, it rarely is. Give it a context. In reality it happens slowly enough for business to provide a logical, constructive response. Don’t panic.

(Not surprisingly, the demise of one set of parties have created an opportunity for a new generation of Australian based juke box manufactures – but that’s another story)

The recent non-smoking regulations brought in throughout Australia provide a great case study of how we might respond to market change. It has been interesting to see the reaction to these regulatory-driven changes from venue owners and operators, and the pattern of responses has followed the classic model  - with everything from “this will destroy our business” to “we need to change and meet the challenge...passive smoking is not just dangerous, it has kept certain patrons away”.

Staying with the positive responses, it has been refreshing to see a number of venue operators invest in creating new areas - effectively new “experiences”  - in their venues (many started doing this some time ago). Implicit in this view is that there is an opportunity to attract new business - a totally new type of patron, with a new set of expectations. The spin off is that these new areas in turn create another set of business music and entertainment opportunities. The requirement to change offers up a ripple effect of opportunities for all types of business, from design and construction to entertainment.

As one venue owner commented to me: “ It was time we stopped relying on poker machines and created a destination environment for a whole new profile of patrons. We have had to be more creative, and it is an exciting challenge for us”. I have no doubt that this operator will do well.

What does this all mean for us? Well, if we continue to build strong relationships with our customers and supply-partners, and are genuine about our approach when offering solutions to our prospects, we will be in the best possible place to take advantage of change. It is not a matter of fighting change, or for that matter pushing for change; rather it is a matter of assessing the situation and offering advice, given our client’s requirements.

To this extent, nothing’s changed at all.

Wayne Hall

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