Adaptability is essential to sustainable business success, and recruitment companies can learn a lesson from two companies that took very different approaches to their business strategy, says the co-founder of leadership consultancy Mettle Group and former star rugby player, John Eales.

One of the "basic building blocks" that leads to success in any industry is leaders' ability to adapt, Eales told the RCSA International Conference yesterday.

Eales, whose company was acquired by Chandler Macleod in 2007, gave the example of Kodak, whose share price of $12.50 during its heyday in 1973 has since fallen to 15c.

Fuji - Kodak's main competitor at that time - is, however, still a "massive" and highly successful company today, he points out.

"Fuji came more to prominence in the 80s when they took on a very aggressive marketing campaign and then price cuts to stay relevant and to keep going in the world," he says.

Over that period, Kodak was more focused on the present and its then strength, which was film, says Eales.

"Kodak's whole philosophy was to get people to take more photos. Fuji's philosophy was to invest in research and development and watch the change in consumer," he says.

"That's a really relevant thing in [the recruitment] industry – to watch the change in the consumer."

Despite being the first company to develop a digital camera, Kodak tried to protect its profits by marketing digital only to a very high-end, niche area – for medical applications.

"Kodak tried to control what consumers wanted; you can't do that. Fuji diversified profit centres to manage future risk," he says.

"The question that's really important is did Kodak become worse and worse at what they did? The answer is almost definitely no.

"They became better at film. They became better at developing an image they develop on film, but... did they become better and better at something that was less and less relevant?"

"The question you've got to ask yourself is are you still relevant? And is what you're doing now going to be relevant in 12 months, in 18 months, in three years, in five years and on and on?

"The answer is almost certainly 'Not in its exact form at the moment'... It's about understanding what is going to change and how do you adapt and stay relevant as your business moves on? Fuji stayed relevant by moving into different areas."

Chandler Macleod adapting business mix

Chandler Macleod is one recruitment company adapting the way it does business, with a push to become less reliant on its traditional revenue streams.

CMG staffing executive general manager Damian Johnson told the conference that two years ago 80% of CMG's revenue came from its recruitment business, which was risky because of the competitive and cyclical nature of the industry.

CMG decided to rebalance the mix by introducing a business model that extended its services from just sourcing talent to planning, assessing, developing and managing its clients' workforces, he says.

"We've been able to shift our earnings profile on the [recruitment] piece from about 80% two years ago to around 60% now and that's given us a far more robust ability to move through the cycle without suffering a downgrade in earnings."

Some of CMG's acquisitions since introducing the new model include HR consultancy Grafton Consulting, outsourced healthcare provider Vivir Healthcare, and specialist outsourcing firm Australian Hospitality Services.