At a carrier conference earlier this year, I had the chance to listen to Robbie Bach, the former president of entertainment and devices at Microsoft. Responsible for developing and building out Xbox, Xbox 360, and Windows Mobile, along with other entertainment aspects of the computer giant, Robbie spoke about how he turned the online gaming division into a profitable business. Because it wasn’t always profitable. In fact, his division lost $7 billion in one of its early years.
What Robbie Bach did to turn a huge loss into a gaining market share – and ultimate success for Microsoft, even in the demanding Japanese market – was turn toward simplicity. He outlined three major components to delivering innovation:
Robbie looked at his business in a different way. He started charging a subscription-like fee for the use of his online games. Every vendor told him no, but he thought it would be an innovative way to price the services. Eventually, people began to gravitate to his model because they could share the gaming experience, talk to friends and see other people online. It wasn’t that the games were different – but the business model was.
This isn’t what you might think. Having experience on your staff is not the focus of innovation. Instead, we need to turn our attention to the client experience. How our customers view us is far more important than the number of years our staff has been working. Take Uber as an example. The company isn’t using any new technology – they only have cars and a mobile application. But, they took a look at the experience offered by taxi services and improved upon it. Microsoft took a look at improving the customer experience in gaming and communicating. It changed the way people play video games.
Without question, technology plays an important role in innovation. However, it should not be the focus. Instead, we need to keep the first two points as priorities and look to see how technology can accommodate or improve them. Not the other way around.
Clearly, our industry needs innovation. However, we are often paralyzed by the enormity of “trying to be innovative.” I challenge you to think simply, not big. The timing is right to evaluate your practice. Find ways to transform your business model and create a more valuable client experience, with or without the help of technology.
Time has changed our industry, so it’s time to change the way we do business. Change can doesn’t have to be complicated, however. Look to simplicity for innovation.
Robbie Bach: http://www.robbiebach.com/
Mike McGlothlin is the Executive Vice President of Annuities at Ash Brokerage. His strength is helping advisors become more efficient and effective in their businesses. He and his team provide income-planning solutions focused on longevity and tax efficiency, and they also assist advisors with entering defined-benefit termination planning and structured settlement markets.
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