How to tell when it’s time to break the system

| August 10, 2018

After 30 years in the furniture business I’ve witnessed the decline of its traditional business model first-hand and discovered, through my latest venture, that sometimes the only way forward is to break the system. Here’s how you can recognise if it is time for you to do the same.

When most people are losing, someone new can win
As one of the early pioneers in developing China’s production and export of furniture to Australia, the USA and Europe, I’ve worked with most of the large furniture retailers over the past 30 years and witnessed first-hand the changing face of the industry.

The Australian and New Zealand furniture industry faces shrinking margins, to the point where nothing further can be squeezed from suppliers, leaving quality and fairness the only areas left to be squeezed. Having witnessed the full cycle over the last three decades it’s obvious that mainstream furniture is now almost considered a disposable commodity, which doesn’t sit well with me.

Not only is this an incorrect way to do business, it simply doesn’t have to be that way. In my view, when most are losing, conditions are ripe for a system break.

When you spot an opportunity to deliver better results by doing things differently
I believe the only way out of the cycle of endless discounting, where businesses struggle to break even, is to innovate the model to offer the consumer something different – something disruptive that represents real value for money.

In order to bring respected Italian brands to Australia at an impressive price point I had two options. I could either minimise margins and put pressure on suppliers (so they barely turn a fair profit) or I could break the system.

I set my heart on the latter and have found a way to make the outstanding design and craftsmanship of Italian brands such as Calia Italia and Nicoletti Home benefit from China’s mass market and thus innovate the supply chain and broaden the customer market. In doing so, I’ve been able to make the sofas for around 1/3 of the usual price, without anyone losing. A true win, win.

When you can see the future is stagnant or declining for your business or industry
This is usually a great time to break the system. But before getting out, first ask yourself, can you innovate or pivot? Perhaps it would be better to go against the flow or come up with a unique idea that will secure your future and open up new opportunities.

When you can surprise the consumer
When people have come to expect a certain standard of experience, it usually means the time is right to break the system, and you can do this by pleasantly surprising them with even greater value. This happens, for example, when a healthcare provider gives competitive quotes or allows itself to be graded according to customer experience. They will instantly stand out and create a new standard.

When there is another market, region, partner, service or industry that you can connect with
I have my sights set on reshaping the sofa industry through a co-venture spanning Australia, Italy and China that will make luxury Italian sofas available in Australia for one third of the usual price. This is a great example of partnering with another market and region to break the system.

The iPhone is another fine example of this as it combines a calendar, email, internet browser, music player and more. Other examples include a café attached to a car wash, an Australian skincare product being sold in China with a focus on its Australian ingredients, a teeth whitening ‘while you shop’ service inside large retailers, or independent personal stylists consulting in fashion stores. It’s important to think laterally.

Is it time for you to break the system?
Perhaps the future of your business or industry is stagnant or declining, or maybe you’ve identified that things need to be done differently (either by surprising your consumer or connecting with another market, service or industry). In my view, there are plenty of opportunities to break the system.