A Cautionary Tale
Recent decades have been a triumph for those with foresight and vision but they have been turbulent and even catastrophic for those who stood still for too long.
The modern business world is not one that is sympathetic to resting on laurels and relying on reputation. In the past this could happen and it might have been enough to navigate rough waters and economic ebbs and flows, but no longer…
To stand still is to go backwards and to stand still too long is to hurtle backwards into distant irrelevance and obsolescence. The proof of this all to evident thanks to countless examples.
Blockbuster seems to be the poster company when it comes to stories of woe and extinction. Founded in 1985 it quickly defined and dominated the video rental market. It opened 9000 stores, employed over 83,000 and became one of the most recognisable high street brands. But things changed quickly and Blockbuster did not.
It failed to embrace the shift to on demand and digital viewing. In 2000, Blockbuster’s CEO dismissed the emerging Netflix as, “a very small niche business” and rejected the company’s offer to sell itself to Blockbuster for $50 million.
Blockbuster went bankrupt in 2010 and vanished from the high street shortly after that. By 2017 Netflix had over 103 million subscribers and a current revenue of almost $13 billion – vying with Disney as the world’s largest media company.
Polaroid is another huge brand that shaped, drove and defined a market for many years before slowing, stumbling, lagging behind and ultimately being consumed by a new era that it just didn’t seem to recognise.
Concentrating on its historically successful business activities – instant film and cameras – it did nothing to usher in the digital era and adopt unstoppable new
technology. The result was bankruptcy in 2001.
Toys R Us – The collapse of one of the world’s largest toy store chains was a relatively recent global news story. An international retail giant in a market that will always
exist as long as there are children. None of which could save it.
The vast warehouse-style stores became outmoded and overhead-heavy when compared to the growing online models. Failing to develop its own e-commerce platform to keep pace with rapidly changing shopping habits was a stark example of standing still for too long.
The same can be said for Borders – the huge book and music retailers that sprung up around the world between 1971-2011. Large book and music stores with onsite coffee shops. What a great trinity that is! What could go wrong? The move towards digital books, online retailing and e-readers was not harnessed by Borders which closed all its stores and was forced to raise cash by selling its customer loyalty database to Barnes & Noble for $13.9 million.
Tower Records launched in 1960 and created the music mega-store. For many years it could seemingly do no wrong, fostering an amazing culture with its staff and a hugely loyal global customer base. It even launched Tower.com in 1995 and was ahead of the game…
But this proved to be its last act of visionary progress. Standing still at that point it quickly lost ground against the tide of music streaming and iTunes. Debts mounted and it wasn’t long before this much loved, pioneering brand and colossus of the music scene fell silent and into bankruptcy in 2004.
Like Polaroid, Kodak couldn’t bring itself to engage with the emerging digital camera era for fear of dismantling its massively successful camera film operation in which it was the biggest brand in the world. But that status was meaningless as the market shrank at incredible speed to almost nothing. It filed for bankruptcy in 2012.
There is a sad irony here. It was Kodak who produced the world’s first digital camera in 1975. Engineer Steven Sasson invented and built the first such product. It weighed 8lbs (3.6kg), was able to shoot at 0.01MP and could put 30 images on a cassette tape.
Kodak did not a see a future for such a device and whilst holding 90% of the world’s film market, it saw no further need to pursue this new-fangled, unwieldy project.
And the list could go on. The publishing companies, the record labels, the entrepreneurs, the tycoons, experts and consultants… All hugely successful and at the top of their respective trees one moment, then being felled and crashing down the next.
And in each and every instance – these were people who took chances, faced down risks, made things happen, were driven by a powerful combination of ambition, intelligence and gut instinct. Yet the one thing they all seem to have in common is a failure to adapt.
The opposite of cautious is not reckless, but often caution seems to have been the chosen option for fear of doing something reckless and damaging. Blind leaps of faith are of course fraught with danger and acting quickly on whims and impulses are unlikely to lead to a continuous flow of business success. But having an eye for what makes sense, what clearly has value, what will work – these are what need to be identified and implemented.
As we have seen, nobody and no business is impervious to failure – in fact 88% of the Fortune 500 firms from 1955 can no longer be found – but those that give themselves the best chance are the ones who search for better ways of doing things, embrace evolving methods and means, believe in accountability and future-proofing.
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