His eyes wandering over the multicoloured hoardings
Did you know, for example, that when you take the list of Fortune 100 companies in 1966 and compare it with the Fortune 100 in 2006, 66 of those companies don’t even exist anymore? Another 15 still exist but aren’t on the list any longer, while only 19 of them are still there. Similarly, ample research and statistics show that for a variety of industries very successful firms have trouble staying successful.
You could call it arrogance or, more kindly, naivete but there is a certain blindness at play; blindness to the dangers of continuing a previously successful course of action for too long.
How does it happen? Over the years, companies begin to focus on the thing that made them successful (a particular product, service, production method, etc.). Initially that serves them well and they become even better at it. It will also come at the expense of other products, processes, and viewpoints that the company considers less important and off the mark, that are discarded or brushed aside.
As a result, firms are too late to adapt to fundamental changes in their business environments such as new competitors, different customer demand, radical new technologies, or business models. The historical examples of Laura Ashley, Atari, Digital Equipment, Tupperware, or Revlon come to mind.
{ Harvard Business Review/Freek Vermeulen | Continue reading }
