Wednesday, June 8, 2011

Challenges vs. Opportunities

I belong to a human resources group at Linkedin and every morning I get a group update and one question seems to dominate the group discussion:  "What are the biggest HR concerns you face in your organization?"

I can't help but think to myself, "Concerns are only opportunities that you have not capitalized on yet!"  I wish just one time someone would ask, "What opportunities are you going to capitalize on in your role as a human resources executive today?"  I bet if I posted this question there would be no responses but everyday I will continue to see that people continue to respond to the question in regards to "...their biggest HR concerns...."

Back in 1999 while traveling I met some young people who were discussing a business concept which involved tee shirts, art, and screen printing; which are exactly the core components of the industry that I was employed in.  There idea was to create a community of artists who would create art, vote on it, and then the company would screen print the winning vote getter's on tee shirts and then sell the final product to the community.  At the time that was a revolutionary idea that really wasn't all that much of a revolution if you sat down and studied the concept.

I tried to pitch the idea to the two owners of the company that I worked for at the time.  The trouble was that they were busy looking for the next opportunity to recreate business as they remembered it.  At one time, if you were a screen printer, you could have one design that you would print 10,000 units of a week and sell it to every retailer out there; of course, at one time all screen printed shirts were on white tee shirts.  Slowly but surely, year after year, retailers and consumers demanded something new, something different and before you knew it you were screen printing 144 shirts of a design and that design could be on as many as 12 different colored shirts; on top of that if you sold designs to one retailer you had to guarantee that the same designs would not be sold to another competitor of theirs.

At one time consumers had to have what everyone else had; now consumers want to be individuals.  So, it was obvious that the market was heading to a consumer centric business model long before any of us had a name for the trend.  Now, the trend in our industry was to move off shore and benefit from lower labor costs to increase ones scale. 

Its like if you sell a million dollars a year of four designs and or shirt colors, then if you go to eight designs or colors you will enjoy two million dollars of sales and on and on it went until you had so many choices and or options that retailers became overwhelmed or you drowned in so many sku's that you could not produce the goods or you over produced and the carrying costs of inventory ended up bankrupting you.

The real revolution wasn't in the idea that these young people presented but rather in the fact that those of us in the industry could not accept the reality of what we already were aware of; the "good ol' days" are over!  I have kept track of those young guys over the years and they "won!"  The founder is now on the top 10 list of internet millionaires who is under 30 and he gives lectures to MBA students at The Harvard Business School.  

The apparel industry, both retailers and manufacturers, continue to consolidate, and in turn find themselves with nothing but their sheer girth and pricing on which to compete on; kind of like dinosaurs.

Opportunities are nothing but evolution while the perception of challenges are the basis for extinction:  The only difference is ones point of view.

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