The companies at the top of the Fortune 500 get a lot of attention, but I like to look at the bottom of the list. That’s where the really interesting dynamics are – where the companies on their way up are meeting the companies on their way down. It’s like the relegation zone in the British Premiere League. It’s life-or-death drama!
This year, the bottom of the Fortune 500 List consists of some big energy companies, service providers, CPG conglomerates, and financial institutions, but one name really stands out to me – Hasbro (currently at 496, down slightly from 495 last year). This is the brand of my youth! The home of Nerf, Transformers, Play-Doh, My Little Pony, Tonka, Monopoly, Dungeons and Dragons, and GI Joe.
Now when you think of a “modern business,” you probably don’t think of Hasbro. In the book, I talk about the traditional way of doing business, in which a company makes a product, marks it up, then places it into a secondary retail or e-commerce channel in the hopes that an anonymous customer will buy it. Putting units on shelves, buying some advertising, and hoping for the best. That basic model seems to fit Hasbro.
Or does it?
When I visited their website recently, I have to say I was both surprised and impressed. Hasbro’s motto is “Where Fans Come First” (customers, not products!), and a $50 dollar annual subscription to “Hasbro Pulse Premium” includes free shipping and all kinds of perks like early access to new toys, as well as exclusive content and member events. Plus, there’s a new “Hasbro Selfie Series” that lets you turn yourself into a digitally scanned action figure. Talk about customer-centricity! Clearly, this is not a company pushing units on shelves anymore.
Hasbro may be a legacy brand, but they certainly seem to be operating under a modern business mindset. They seem to be operating more like a SaaS or a media company. Hasbro has a new brain in an old body – it kind of reminds me of this cool company that puts EV engines in classic pick-ups and roadsters (or in Hasbro’s case, Tonka Trucks).
But if we talk about doing “modern business,” what do we really mean by that?
At Zuora we’re talking to lots of fascinating people we call “accelerators”. The Accelerators are leaders who are driving change and defining the customer-centric business of the future. Based on these conversations, I think doing “modern business” means three things:
First, it means you have a business model that prioritizes relationships over transactions. It should align price to value, leverage data to personalize offers, and always start with the customer. One of our Accelerators, Srikanth Akkiraju, Head of Solutions & Software IT Platform at Philips, talks about the importance of a business model that allows Philips to play to its strengths:
“One of the ways that we are changing the way Philips engages with the customers is through innovative business models…That allows us to have longer-term relationships, but also allows us to play to our strengths…managing the technology for our customers, which allows our customers, hospitals, to play to their strengths, which is to really engage in giving the care to all the people in the world.”
Second, it means you have a nimble technology stack that can bring that business model to life. To move to a recurring revenue model, you need to rethink the integrations between your CRM, ERP, and the so-called “middle office” of customer operations. Crucially, it needs to run on a data model built around customers and subscribers, as opposed to product SKUs. As Rowan Prior, Director Of Revenue Operations, formerly at Vimeo, Deloitte, and Liveperson, notes:
“It’s really important to have the customer journey at the center of your technology…Once you have that, you can see the light bulbs going off in people’s heads…They see all sorts of new opportunities.”