Innovation & Transformation for Exhibition Business Growth
Today’s corporate buzz words are innovation and transformation, and for good reason. A recent global study suggests that that 75% of the S&P 500 will turn over in the next 15 years whilst another says that one in three companies will delist in the next five years. A third research shows that the “topple rate” of industry leaders falling from their perch has doubled in a generation. Software is eating the world and Unicorns are prancing unabated. Executives at large are accepting that Innovation and Transformation will not only be the key differentiators in the years to come but also will be the enablers of survival.
So what does this word transformation mean and how does it happen?
Well, transformation is a complex process involving various steps.
The first is operational, or doing what you are currently doing, better, faster, or cheaper. Many companies that are “going digital” fit in this category — they are using new technologies to solve old problems.
The next method focuses on the operational model and is also called core transformation.This involves doing what you are currently doing in a fundamentally different way. Netflix is an excellent example of this type of effort. Over the last five years Netflix has shifted from sending DVDs through the mail to streaming video content through the Web. It also has shifted from simply distributing other people’s content to investing heavily in the creation of its own content, using its substantial knowledge of customer preferences to maximize the chances that content will connect with an audience. Customers still turn to Netflix to be entertained and to discover new content, but the fundamental way Netflix is solving that problem has changed almost completely. The revenue has become more sustainable as it is subscription based now.
The final usage, and the one that has the most impact and potential implications, is called strategic. This involves changing the very essence of a company. Liquid to gas, Apple from computers to consumer gadgets, Google from advertising to driverless cars, Amazon.com from retail to cloud computing, and so on. If executed successfully, strategic transformation reinvigorates a company’s growth engine opening up more revenue streams.
The term “innovation” is generally associated with geniuses turning start-ups into gold mines — the next Google, Apple, Uber or Amazon, with products no one even knew they needed. While, every company aspires to be as innovative as these start-ups most don’t have time, bandwidth or focus in place to prioritize their innovation strategy. Innovation is finding new ways to grow, and every business needs to grow year over year. But the first step to generating real growth is to understand where will it come from. The six simple ways to growth that I have been able to pick up from my readings of various successful case studies and business success stories with a predominant influence from Apple include:
New processes. Sell the same product at higher margins: Cut production and delivery costs, automate for efficiencies, optimise the supply chain or manufacturing.In the exhibition business could mean adding more value to products to be able to command better prices
New experiences. Sell more of the same product to the same people: Increase retention and share by powerfully connecting with customers. An example is the Apple Store experience, which many would argue is as compelling as the company’s products.One to one meetings, on spot promotions, dedicated mail campaigns could add revenue streams and add to customer benefit.
New features. Sell enhanced products to the same people: Add improvements that drive incremental purchases. An example of this is every new phone Apple releases, with better cameras and so on.
New customers. Sell more of the same stuff to new people: Introduce the product to new markets with needs similar to your core, or to markets where it might address a different need. For Apple, this goes back to reaching the mainstream rather than the design community. Targeting visitors and exhibitors from markets like Sri Lanka, Thailand, Vietnam who find it difficult to be at European shows could add revenues and value both instead of conventional approach of targeting Germany, China, Taiwan…
New offerings. Make new stuff to sell: Develop a new product — not just enhancements. Find new needs to solve within existing markets, or invest in a new category. Think HomePod or the iPod.
New models. Sell stuff in a new way: Reimagine how to go to market by creating new revenue streams, channels, and ways of creating value. This can be as simple as moving to a subscription model, or as transformative as Apple’s creating iTunes.
The easiest goal in the innovation pie is to maintain relevance to your core market through enhancements — with new features for your current offerings or the experiences that deliver them.
So what are the factors holding innovation & transformation?
Getting the right strategic vision is critical: This means being able to anticipate what the customer is going to want and how best to achieve it. It also includes defining the depth and scope of the changes and the redesign of internal processes and structures. Before embarking on a transformation, consider these questions: Is a major transformation necessary or will a more surgical, limited re-positioning be enough?
Execution is the hardest part of transformation: Most companies get the vision right, but the execution is the hard part: more than half of companies undertaking transformation fail to achieve the desired business result. Organizations often underestimate the significance of changing the minds before changing the business.Many exhibition acquisitions in India have failed as whilst the process transformation and implementation was good the ability to change minds didn’t match up…
The biggest challenge to transformation may be living in past glory: If the temptation to stay glued to a model that has worked over the years is too strong it presents huge challenges in applying newer and innovative models that could be leaner and faster.
How does this fit in the world of exhibitions?
Exhibitions & conferences thrive on constant innovation and process transformation. There are many trade shows which were the market leaders in their times and now they don’t even exist. IETF was truly a global industry convergence with 25+ international pavilions covering the entire Pragati Maidan, Inside Outside mega show was the benchmark for home décor shows which have been overshadowed now by more innovative brands. There are many examples within the Indian exhibition industry where less than required focus on innovation and product and process transformation has made products lose their sheen and in many cases shut down.
Another question that I come across in my interactions with colleagues in the industry is that “transformation & innovation are only for the big organisations, is that right?” and I can’t stop being amazed at that. I can’t stress enough that maximum innovation and easiest transformations happen when you are young, nimble and light and if you can’t do it then you probably won’t be able to do it later. Look at the number of Unicorns around you, they are all young companies an Uber, Flipkart, Swiggy had they waited to improvise on their businesses till they grew they would not have been where they are.
So what’s slowing down the innovation in the Indian exhibition business?
If you look at the genesis of the Indian exhibition industry, through 70’s and 80’s the Indian industry was hungry to buy equipment and machinery and the influx of international players at these shows was so high that organisers did not need much of innovation and the industry grew as the market forces shaped it on a day to day basis. Post first round of liberalisation the 90’s saw Indian manufacturers being competent producers wanting to sell pan India and potentially export, both the industrial and consumer markets were growing and the changed expectations led to a need of attracting buyers from all over the country which most organisers could manage but some started to flounder at this stage. The third phase is where Indian industry in addition to buying equipment from internationals was looking at more strategic and collaborative partnerships, the need to sell was in global markets, the innovation on attracting international buyers was low and this witnessed a large number of Indian exhibitors starting to participate in overseas shows as the value offered by domestic ones was not upto the mark. However some shows which were strongly linked to domestic consumption continued to grow at a constant pace.
The recent years have very strongly reinforced that India is an economic and industrial power to reckon with and strategically positioned to be the hub for large events in Asia, however barring a few events the innovation required to make India that hub is missing. This could be contributed to various factors.
The first amongst these is the fact that for a long time Indian exhibitions were in the seller’s market where every kind of product with varied levels of value delivery focus worked as the buyer (exhibitor) was not as choosy. As the market changes led towards a more mature, more exposed and selective customer the ability to take risk started becoming a deterrent as innovation does come with an element of hit and trial which is bound to package an element of risk. The willingness to take a researched approach was somewhere missing as emulating what others were doing was easy. Since most organisations were one or two event companies the learning maturity that comes with big portfolios was missing leading to restricted innovation & originality.
The fact that the large demography was well serviced by alternate media, marketeers started diverting budgets to other media vehicles. The reason an organisation like Times of India was innovating and diversifying into TV, Radio, Online, OOH was it wanted to be connected to its customer in every possible way, yes it was capital intensive but it paid. The recognition that face 2 face media required could not happen as the innovation was negligible.
Innovation requires putting the customer, which is the visitor in this case at the epicentre. I remember at some time in 2007 while working for an international organiser I was undergoing a sales training program in London. The trainer asked the group a generic warm up question “What do we sell?” and the answers in the room varied from “we sell media” to “we build platforms” to “we sell square meters”. There was a pause for a moment and then what he said changed my perspective for a lifetime. He said “here in this company we sell visitors”. It was a simple way of saying that if you have got your customer’s customer in mind you can build the best business ever and command any price and indeed they had products where conference sponsorships would touch a few million dollars and delegates would pay US$ 4000 to attend. If I look closer home Bridal Asia used a unique innovation technique of saying no to the temptation of repeating the same customers every edition and decided to curate new content by handpicking exhibitors every time. The result is an extremely satisfied visitor base, an enviable exhibitor pool that is extremely eager to get a chance in future editions and market leader price points.
Another factor which is leading to the slowdown of innovation is the eagerness to exit with the influx of international majors and the growth in number of M&A transactions. Every third organiser is wanting to put just that much energy into innovation that can help it strike an exit plan. Most don’t even realise whether it’s the right time for them to exit or maybe a bit of innovation and, a few editions more they could walk away much richer.
With the backdrop of the robust growth in the industry the untapped potential for the exhibition business is huge but the growth will depend on a lot of product innovation, process transformation and strategic approach to the entire business.
Founder & CEO Infinity Expo