Home' Trinidad and Tobago Guardian : July 31st 2014 Contents BG12 COMMENTARY
BUSINESS GUARDIAN www.guardian.co.tt JULY 2014 • WEEK FIVE
The appeal of taking over a com-
pany is that it already has an
established customer base, and
the new owners usually see
opportunities for innovation
and expansion. In your situa-
tion, Anna, you ll need to look at the reasons
the business faltered, and decide what its assets
are in addition to the brand name and whether
you can salvage them.
Here are four common problems entrepre-
neurs and managers encounter at established
companies, and how to start turning things
1. The company offers a brand name
rather than value
A business long history is meaningless if it
doesn t provide the best-designed, most reliable
products or services at competitive prices and
back up those offerings with the finest customer
service. In these fast-moving times, longevity
is more the exception than the rule.
According to a 2012 study by Richard N Fos-
ter of Yale University, the average life span of
a company listed in the Standard & Poor s 500
index has decreased to just 18 years, from 61
years in 1958.
The process of starting a business has become
much faster in that time, but the mechanisms
of failure operate more quickly as well. Through
social media, you can inexpensively spread the
good word about your new company s products
and services. And yet those same channels will
spread news about consumers bad experiences
even more quickly.
To get a sense of how your customers under-
stand the brand, first try buying your business s
products and services yourself. Buy them in a
shop, try them out at home, call in with a
complaint, and see how you re treated. Did
you get value for your money? The experiment
may show you many areas for improvement.
2. Managers have become complacent
Very few products are so good that they
cannot be continually improved upon. In Britain
we have the expression "like painting the Forth
Bridge," which refers to an unending task. This
is because the painters of this long bridge in
Edinburgh were never done, once they d fin-
ished painting it, they had to immediately start
over again. (The task came to an end in 2011,
because workers had switched to a different
kind of paint.) Product development should
be a similarly endless quest for improvement.
This process is sometimes neglected or even
abandoned at an established company. When
you take a new position at such an enterprise,
you should ask yourself and your team, does
the company s offering need a makeover? What
are the opportunities for improvement?
In your position, Anna, I would look at how
your product or service stacks up against your
competitors . The answers may help you to
pinpoint changes that are needed immediate-
3. Employees have become bored
If the previous owners of the business lost
their way, it s possible their employees did too.
And at a company that has been around a long
time, keeping them motivated and engaged
can be a big challenge, since they may have
been doing the same jobs for many years.
Sloppy, lackluster delivery can quickly destroy
even the best products and services. Look at
what happened at many phone service providers
and airlines in the past 20 years.
Talk with your employees: How do they get
along with their colleagues and your customers?
What motivates them to go to work in the
morning? Listen carefully to their answers.
Those whose primary concern is "paying the
bills" may need your help finding new inspi-
4. Nostalgia blocks innovation
Just because a brand has been around for
decades doesn t mean that it s right for today s
marketplace. If your brand has been tarnished
by years of mediocrity, or is seen by potential
customers as something only their grandparents
would use, then a rebranding may be in order.
Ask your staff and customers what they like
and don t like about the operation today. While
the company s past is an asset, you need to
focus on what can be accomplished in the
present; just like your creditors.
Whatever changes you decide to make,
remember that a business s best assets are its
people, and you should keep them on if at all
possible. Hang in there and keep sight of what
inspired you to buy the company, and I am
sure you will turn the company around.
Entrepreneurs: If you have ever taken over
an established brand, what were the obstacles
you encountered? What s your advice for Anna?
(Richard Branson is the founder of the Virgin Group
and companies such as Virgin Atlantic, Virgin America,
Virgin Mobile and Virgin Active. He maintains a blog
at www.virgin.com/richard-branson/blog. You can follow
him on Twitter at twitter.com/richardbranson. To learn
more about the Virgin Group: www.virgin.com.)
(Questions from readers will be answered in future
send them to
RichardBranson@nytimes.com. Please include your
name, country, e-mail address and the name of the
Web site or publication where you read the column.)
How to turn a business around
I just bought a well-established, well-known brand in Ireland. Though the
company has been around for 40 years, for various reasons it is no longer
making a profit and turnover has collapsed. However, in my opinion, the
brand still has value. How can I capitalise on this while I'm trying to in-
crease turnover in order to pay the creditors? Anna Keely, Dublin
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