Managing a business is challenging enough- balancing customers’ needs with organizational priorities in the pursuit of profitability. The day-to-day tasks tend to put the focus on the short-term. All the while, winds of change are swirling outside the walls of the organization. Change is inevitable, and many firms that are successful today will encounter turbulent times ahead because they were not prepared for disruptions to their business models.
Marketing expert Martin Lindstrom raises this issue in a recent Fast Company article. He points to two companies as examples of how disruptions can blindside an unprepared company: Polaroid and Blockbuster. Polaroid was riding high in the 1970s and 1980s with its instant camera. Of course, digital imaging technology has rendered Polaroid irrelevant in meeting that particular customer need. More recently, Blockbuster went from the dominant movie rental retailer to a bankrupt entity that was acquired this week by Dish Network for slightly more than $300 million. That figure is more than 90% off of Blockbuster’s market value in 2002.
Polaroid and Blockbuster were taken down by disruptions- changes from outside the organization for which they were unprepared to adapt. Like death and taxes, change is a certainty. Whether it is new competitors, emerging technologies, or shifts in customer desires, change will happen. Having foresight to sense potential disruptions to the business model is a trait that sets apart successful firms from struggling ones.
Sometimes disruptions blindside a company; in other cases the disruption is observed but resistance in the form of maintaining status quo prevents adapting to the disruption. I have observed the latter in higher education. Greater interest in online education and intense competition from for-profit institutions has propelled many traditional colleges and universities to debate the need to adapt to the disruptions. As the debate continues, the disruptions further threaten the competitiveness of traditional institutions.
While managing the here and now, keep an eye toward the future to spot the next disruption that will impact your business. Be out front and turn the disruption into an opportunity. The alternative is to follow in the footsteps of Polaroid and Blockbuster, companies that did not adapt to disruptions and became victims of change.