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Learning From Big Business Failures

By on February 20, 2015
blockbuster-signs-12

blockbuster-signs-12

The new digital age has helped to make life easier and bring almost everything possible right to our fingertips. We can now perform tasks more efficiently and do things that were once unimaginable. Helping to make life easier for all of us, but we forget that for every new discovery or tweak, that there is someone or something that will lose its place in the shuffle. With advancements and innovation there is always someone left behind or someone who can’t adapt to these changes quickly enough. In recent years, giants in our business world have succumbed to this lack of evolution. Mainstays in our everyday life are literally absent now and here are a few reasons why your old favorites are now simply just old news instead.

An easy one is an old weekly family night classic in the U.S., Blockbuster Video. It seems like just yesterday renting a movie was an easy way to bring entertainment home to you and your family, but online streaming and tech advances in media sharing online has wiped the former video giant right out.

Ironically, what initially made Blockbuster a trailblazer of the movie rental industry was its innovative use of technology. Blockbuster’s up-to-the-minute inventory system helped the company optimize its offerings and it wasn’t long before it was putting mom and pop movie rental stores out of business. But then came the new kid on the block, Netflix. The movie by mail service, and later online streaming service, gave customers the convenience they wanted at a price that blew Blockbuster out of the water. Instead of acknowledging that change was needed in the way consumers wanted their entertainment, Blockbuster remained attached to their weakening business model. It took six years of after Netflix launched for Blockbuster to finally try a different approach but it was too late. Stores closed at a rapid rate, and in the end it was bought out by DISH network that now streams Blockbuster content through their satellite service for customers at home on their TV, smartphone or tablet. A good idea that could have worked due to Blockbuster’s well recognized brand name but was executed a few years too late.

The modern day consumer is notoriously savvy. They want value, but they also want what’s relevant. Learn what’s specifically valuable and relevant to your customer and then give it to them.

Another example is former photography mainstay, Kodak. Another victim of failing to adapt to the digital age quickly enough. Kodak used to be considered a creative, inventive organization that encouraged new ideas and new technology, which was a huge reason why the company emerged as a leader in its industry. Kodak’s downfall began once they had to deal with their initial success and growth. Complacent leaders listened less to the inventive voices within the organization and eventually those passionate employees stopped trying to get their ideas heard. Complacency fueled Kodak’s downward spiral. No matter what level of success your business achieves, the new ideas that key innovators in your business offer are worth listening to. But ignore them, and it won’t be long before they’ll stop generating fresh ideas, or worse yet, take their ideas elsewhere, which eventually happened and Kodak was left with trying desperate measures such as hiring Lady Gaga to be their creative director and essentially that move was just a big marketing payout that never panned out.

The moral of the story is that adaptation is a must. Understanding that changes to certain things are a must and that there is always room to improve things. It is great that your original business model got you to the top, but knowing that a new model must be implemented to stay at the top is key to sustainability and withstanding competition.