Business leaders are aware that they need to adapt to a continuously changing market through improvements in operations and business processes in order to differentiate themselves from the competition, so as to gain a stronger foothold in the market.
Companies that cannot adapt to change, whatever their nature, are doomed to failure. Consider 3 companies that couldn’t properly react to the changes they faced:
Blockbuster for many years provided movie and video game rental services through a large network of retail video rental stores. A combination of competition from Netflix and poor leadership were the main factors that led to its eventual disappearance. Although the company had the opportunity to buy Netflix in 2000, it did not. Instead, Blockbuster decided to focus on being the best retailer possible. Consequently, it went bankrupt in 2013 when people stopped visiting their stores because on-line services such as Netflix were so much more convenient.
Kodak - For many decades, Kodak had been a leader in camera and film sales, in fact, they were the pioneer in that industry, starting in 1888 when it was founded by George Eastman. However, in the late 1990s, it began to struggle financially as a result of declining sales and its slow transition to digital photography. Although it’s still around today, the company suffered an intense crisis that led it to file for bankruptcy protection in 2012.
Yahoo was the largest internet portal in the world in 2005, and worth $125 billion. Just over 10 years later, the company was sold to Verizon for the comparatively modest price of just $4.8 billion. The company could have been the largest search engine on the Internet, but instead of following their strategy, it (wrongly) decided to broaden its reach and be a media and technology company.
On the other side, one company that was on the verge of failure changed its strategy, apparently just in time:
Blackberry was extremely successful based on its launches of innovative products and services such as PDA’s (personal digital assistants) and mobile phones for more than two decades. In 2007, Blackberry products accounted for over 50% of the sales of mobile devices in the USA. However, the company ignored the new technologies that Apple and Samsung were bringing to market. Subsequently, in 2013, Blackberry’s share fell to just 3.8%.
To save the company from an inevitable bankruptcy, drastic changes in leadership and market strategies were made. Instead of continuing as a smartphone company, it became a growing leader in cyber security software and devices for tracking fleets of cars in the field, for example. Its strategic shift also made the company a leader in IoT (the Internet of Things). Today, 90% of its revenue derives from software and enterprise products. Although the company is smaller and less profitable, in some ways it is stronger, and better prepared to attain the growth rates that it once enjoyed.
The above examples illustrate that properly adapting to change is vital to an organization’s sustainability. Any change - large or small - is associated with many risks; leaders must be ready to guide their teams through unfamiliar situations, using a combination of well-thought out strategies and unwavering commitment, while providing the clarity and tools needed to ensure that the entire organization is aligned to the same goals.
At Connect HR Strategy, we help our clients with Change Management to deal with the specific needs that confront each organization, propelling the success of their businesses. Get in contact with us to speak about how we can help you.