Things to Learn from Sotheby’s and Andy Grove
I ended last Tuesday’s post “The Stunts of New Age Competition” with these 2 lines:
The mantra here is Compete; Don’t Complain.
The question is “Are you Prepared?”
The point then is how do you prepare yourself and your firm for the future. As you would know by now, the entire essence of this blog is about helping you build the firm of the future. Let’s continue the journey with this post. I am experimenting with a slightly different style of writing in this post.
The legendary ex-CEO of Intel, Andrew (Andy) Grove, wrote – “A corporation is a living organism; it has to continue to shed its skin. Methods have to change. Focus has to change. Values have to change. The sum total of those changes is transformation.”
Some people (and businesses) get this. Many don’t.
Many are simply protecting what they have built. Why break things when nothing is really broken?
What about you?
While you are reflecting, let me tell you that Sotheby’s doesn’t believe in simply existing or continuing the way it has. A little bit about Sotheby’s in case you are wondering who they are. Founded in 1744, Sotheby’s is the oldest and largest fine art auctioneers in the world. They have a global network of 80 offices and annual world-wide sales of over $7 billion.
Forbes writes, “After nearly 300 years of doing business in old-fashioned ways, the venerable auction house rewrote its playbook during the pandemic- and kept going, going…” Their post “How Sotheby’s combined NFTs and a Netflix attitude in a Wild Bid to be Crypto Cool”, explores this in detail.
Forget the debate about Crypto, NFTs and whether they make sense. That is not the intent of this post.
There are many things that we can indeed learn from the 278 years old giant.
- The importance of Staying Curious
- Always Be Learning
- Adapting to Change (by shedding its skin and changing its methods)
- Speed of Decision Making and Action. Can you believe the speed at which the auction house moved?
Was Sotheby’s always like this?
The fact they have survived and thrived for so long as a global brand speaks volumes of their capabilities in innovation and transformation.
However, Abram Brown, Author of the Forbes Post writes, “Dual Forces have pushed Sotheby’s to modernize: the pandemic and fresh ownership. In 2019, French telecom magnate Patrick Drahi took the house private in a $3.7 billion deal. The picture for Sotheby’s is considerably bright these days. Much of it is thanks to Stewart, a former investment banker who left the CFO job at Drahi’s telecom, Altice, to join Sotheby’s as CEO. Since his arrival, the house has shifted some of its focus to NFTs and other nascent markets – luxury sneakers, rare teas- and made use of big data to guide how it manages sales and clients.”
“The pandemic allowed us to rethink the conventions of the art market, which run deep,” Stewart says.
What about you?
What will it take you to modernize? What will it take you to deliver a world class client experience?
A Pandemic. Competition. Losing Clients. A Change of Leadership.
If you didn’t change during the pandemic, this means the pandemic option (or even something similar to this) is really out of the window.
That leaves us with a couple of things:
Competition: As I have written extensively, the competition today is way different, and more (not to mention ruthless backed by deep pockets) than it was earlier. They are attacking a very different vector of competition which is price. Previously your competition cost the same to your clients as you did (leave the mis-selling of insurance policies and NFOs aside) but the product level pricing was exactly the same. Now with TechFins and FinTechs generously using mutual funds as loss leaders, the game and the field are very different.
Additionally, the competition was focused on HNIs and UHNIs. Today, the competition is attacking all levels of wealth and all kinds of clients.
How are you positioned for this competition with the same thing you did earlier?
Losing Clients: Many don’t wake up on their own till some of their biggest clients start moving to competition. A certain level of client churn is inevitable and sometimes even good, but are your biggest and/or best clients leaving you?
Andy Grove wrote, “Businesses fail either because they leave their customers or because their customers leave them.” In case your customers are not leaving you yet, are you leaving your customers.
A Change of Leadership: I don’t necessarily mean getting someone new (though that would be an option as well) but how about a collaboration with someone that makes you stronger, world class and future-proof.
I began this post with an Andy Grove quote, and I end this one with another one of his best quotes. “The person who is the star of the previous era is often the last one to adapt to change, the last one to yield to the logic of a strategic inflection point and tends to fall harder than most.”