Pivot or Perish
“Better three hours too soon than a minute too late.”
By many measures the Print Hall restaurant within the Perth CBD is at the top of it game. It currently ranks in the AFR’s best 100 restaurants in Australia, has been named the best restaurant in Western Australia by the WA Good Food Guide, and has won Wine Spectator’s Grand Award for 2015. Despite these accolades, the restaurant has recently announced that it will close its doors, to relaunch later in the year to service a distinctly different market. This has come about due to dramatic changes in the context within which the restaurant operates. Until recently Perth, Western Australia was a boom town. Buoyed by ever increasing commodity prices, and resultant construction in mining and oil and gas projects, the City experienced a dramatic influx in workers and wealth which was great news to the local hospitality industry.
But times have changed. The continued downturn in iron ore and oil prices, as well as completion of a number of significant construction projects, has bought the boom to an abrupt halt. As the workers fly out and local industry shifts its focus to cost cutting, the Print Hall’s high-end offer has fallen out of favour, resulting in less long lunches and a contraction in demand. The owner of the Print Hall, Colonial Leisure Group, has chosen to move quickly, shifting the business’ focus to meet the changing demands of the market – opting for a lower cost, more casual dining offer that extends late into the night.
The Print Hall’s refurbishment is a good example of a nimble, responsive business making decisions based upon a clear understanding of future drivers of growth rather than historic trends. The business, despite its historic and present-day success, has chosen not to wait to be disrupted but instead has chosen to disrupt itself.
Paul Nunes and Tim Breen discussed the need for reinvention in business in the Harvard Business Review back in 2011, arguing that successful businesses ‘turn conventional wisdom on its head and learn to focus on fixing what doesn’t yet appear to be broken.’ Many are familiar with the classic s-curve product lifecycle taught in Marketing 101. Nunes and Breen put forward an argument that ‘high performers are well on their way to new-business success by the time their existing businesses start to stall”. The impact that this has on a business’ product life-cycle, and therefore its performance, is shown in their graphic below.
Figure 1. High performance requires ongoing business model disruption
Source: Reinvent Your Business Before It’s Too Late, Nunes, P. and Breen, T. Harvard Business Review Jan-Feb 2011
This suggests that a new business model should be well underway prior to the old being in decline – a lesson the operators of the Print Hall are applying to their current decision-making.
Big Hairy Prediction: As an early disruptor, Print Hall management will utilise their undoubted industry expertise to pivot the business towards new markets and product innovations. They will be back within the top 100 within 2-years.
For more information on our big hairy predictions follow the link.