28 Jun Why Would a Tire Manufacturer, in 1900, Decide to Publish a Hotel and Restaurant Guide?
There was a story in the news recently about SABMiller Plc, one of the world’s largest brewers, working with 6,000 pub owners in South Africa to – among other things – significantly improve the quality of women’s toilet facilities. Why would they do that? Well, there are 17 million women of drinking age in South Africa but relatively few go to pubs to drink with their friends. Many makeshift bars, called shebeens, which date back to Apartheid, lack toilets altogether. That does not invite an afternoon or evening of lingering (or drinking!) with friends. Early results from this unusual investment initiative are promising. I give the company credit for thinking about business growth strategies creatively and how to gain market share in South Africa while gaining the loyalty of pub-owning entrepreneurs and patrons.
This news item reminded me of one of my favorite stories of business wisdom and innovation. In the year 1900, there were only about 3,000 cars on the road in France. So two brothers who were in the business of manufacturing and selling tires asked themselves the question of how they could boost their sales. If more people bought cars, they would sell more tires. But the brothers realized that most people didn’t really know much about the rest of the country except from what they might have experienced on a family visit. Where could they spend the night? How long would it take to get there? Where would they eat? Not knowing the answers to these questions meant that most people didn’t travel very far at all and it made planning trips for those who did quite cumbersome. And people weren’t buying that many tires. So the brothers – owners of the Michelin tire company – decided to publish the first comprehensive hotel and restaurant guide for France and printed 35,000 copies. Thus the Michelin Guide was born. In the foreword, the brothers André and Edouard Michelin called it “a small guide to improve mobility”. Talk about being ahead of the curve! A Michelin Guide to Belgium followed in 1904 with many other countries throughout Europe to come. While the auto industry was certainly destined for growth from its humble beginnings, I believe the Michelin brothers made a significant contribution to the industry while also teaching a valuable lesson on smart business growth strategies.
I encourage business leaders to sit down and truly, deeply reflect on what is driving their customers to buy their products or services. And, as in South Africa, what might be stopping them. Invest some real brain power and analytics capabilities. Then develop a strategy that is three steps ahead of your competitors and be content to humbly wait for that fact to become apparent to everyone else – even 114 years later.