Reinvention will soon become the latest catchword in the DeathCare professions. I agree! Reinvention has been a long time coming. But I fear that many have already mistaken cosmetic touchups to our traditional practices as reinvention thus fooling themselves into continued complacency.
There are many shades of reinvention and the magnitude of the one called for today hasn’t been experienced by us in well over a century. It would help to know that this is not the first time we have reinvented ourselves…not by a long shot. But it will be the first time in any of our lifetimes that will require a complete overhaul. Cosmetic touch-ups to existing paradigms won’t do it. As Andrew Grove Chairman and CEO of Intel Puts it:
“Strategic Inflection Points…[are] what happens to a business when a major change takes place in its competitive environment…it causes you to make a fundamental change in business strategy. Nothing less is sufficient.”
This chart shows but a few of the inflection points funeral service has experienced over the past 100 + years.
The reinvention that parallels today’s in order of magnitude is the advent of embalming after America’s Civil War…or as those in the South refer to it: The War of Northern Agression.
Until that time furniture and cabinet makers offered “undertaking” as an ancillary service to their regular trade. It was a “sideline” business related to their coffin making. When traveling embalming “surgeons” appeared after the civil war some of the more entrepreneurial minded craftsmen saw an opportunity for market advantage by becoming embalmers and offering the service themselves. Eventually the modern funeral model was born. Those cabinet and furniture makers who failed to adopt the new science simply let it go and pursued their normal trade while the funeral director profession grew and flourished as a specialist industry. The advent of embalming introduced an inflection that sent the practice of undertaking into a completely new direction…ultimately creating a stand-alone profession.
Subsequent and less dramatic inflection points occurred over the years until 30 years ago cremation, specifically cremation without the sale of a casket, caused the first downward trending inflection. Until then, small adjustments or adaptations enabled effective “course corrections” that created market advantages for those who took advantage of them.
The advent of cremation was different and for a variety of reasons we dropped the ball. This trend continued in a steady 1% annual progression until 2008 when the rate spiked to more than 2% annually, an increase of more than 200% in a single year.
Because this trend has been relatively slow and progressive we have forgotten the impact. To many it remains an abstract. 2012 witnessed the first year in which cremations exceeded 1,000,000. Most of these did not include a casket sale. Since the MARGINS on cremation are more than $2,000 lower than burial this factoid represents more than $2 BILLION loss of MARGIN at the retail level. What does that mean to you individually? I concede that individual circumstances vary. But for a quick thumbnail estimate you can simply multiply the number of cremations you served last year by $2,000. So, if you served 50 cremation families then AT A MINIMUM you lost $100,000 in MARGIN. OUCH!!!
FUNERAL SERVICE FOUNDATION RESEARCH
The research revealed at this year’s NFDA convention conducted by the Funeral Service Foundation was both frightening and encouraging.
Frightening because it showed us how our demeanor, facilities and advertising are actually reinforcing negative stereotypes.
Encouraging because it showed us how we can begin the process of reinventing ourselves to reengage consumers and recover lost ground.
Make no mistake. The day of the casket is over. And we can no longer sustain ourselves by overcharging our burial customers. We, indeed, must reinvent ourselves. But we now have clarity relative to what we must do and how we must do it. To download the slides go to funeralservicefoundation.org and click on the button on the home page “Breaking The Consumer Code”
WARNING DANGER AHEAD
Much of what was learned was not so much new as it was clearer. Funeral directors have been gleaning hints for years. And the danger is greater than ever. But not a danger that most would imagine. For example: It is now as clear as it can be that people want and will probably insist on celebrating their uniqueness. This will most likely be interpreted as “personalization”. And in a limited way it is. But it is also much more. I suspect many in the audience at NFDA were comforting themselves saying: “we already do personalization.”
I don’t think the personalization we have done thus far is really hitting the mark. In many ways the funeral home is still center stage and the effort is almost always cosmetic instead of substantial. We mistake form for substance. We think gimmicks and “do-dads” suffice for deep meaning when they don’t.
Reinvention is Hard, Dirty Work
As I write this ICCFA is holding its fall management conference with reinvention as its theme. I suspect the combination of the Foundation research and the ICCFA meeting will make “reinvention” the new buzzword. I hope they will. Because reinvention…transformation…is what it will take to deflect the downward trend of the past 30 years and turn it upward again.
But, again, make no mistake. Reinvention is hard, dirty challenging work. It means substantive change to a business paradigm that is broken beyond repair. Notice I said paradigm. I am not as confident the model is broken. It may need repair but the model may be relatively sound. Time will tell. That kind of reinvention is painful. That is why I compare it to the magnitude of the inflection point embalming created. Like the cabinet and furniture makers during the advent of embalming, not everyone will be suited for it.
This transformation will require that we examine every part of what we do and what we believe. Some of what we do is like the “Baby In The Bathwater” and should be kept. Other parts should be separated out. It is that process that will be so difficult. And process is the right word. It is not, nor will it be, instant. Nor will it likely be an “either / or” answer. In this multivariate world we now live in it is more likely to be a “both / and” answer.
Andrew Grove, Chairman Of Intel Gives Us Some Insight
Andrew Grove, Chairman of Intel, spoke before the American Academy of Management regarding the reinvention of Intel many years ago. His insights help us learn what we will face. He referred to the experience as “The Valley of Death” forcing us all to go through a grief cycle of our own as we let go of the old and embrace the new.
This is an important metaphor if you will be undertaking this process. For you will indeed experience grief and so will your staff and family. In fact, the profession has been in the throes of the grief cycle for better than 10 years. Understanding where you are in that cycle will help those of you who may be stuck get unstuck.
Next Week: I will discuss how to recognize which stage of the grief cycle you are in.
Two Weeks From Now: What It Will Take For True Reinvention. “Islands Of Excellence in A Sea of Mediocrity”