If you're my age, you probably grew up using a Kodak camera taking pictures on Kodak film. But if you're just graduating high school this year, you're probably asking "What's Kodak?" They're still in business (barely), but struggling because they haven't adapted to the changing marketplace.
What about Blockbuster LLC, the video rental store. They were at their peak just three years ago with 60,000 employees, but amazingly, their stores are now gone. Today they operate 10,000 movie rental kiosks in an attempt to compete with Redbox. Blockbuster's problem? They couldn't (or wouldn't) adapt fast enough to the changing market.
Hollywood Video had the same fate as Blockbuster, but they simply closed their stores and let everyone go. Borders book stores are also closed now because they couldn't find a way to keep up with Barnes and Nobel, Books-a-Million and Amazon.com.
The common thread here is failure to make appropriate adaptations to changing market conditions. To succeed at that, I believe one must keep an attitude of focused flexibility. This means staying focused enough on what's working for you now - and continuing to do that - while making contingency plans for how to change based on emerging trends.
Take Apple, for example. Fifteen years ago they were primarily producing computers, but they struggled with market share. To survive they shifted to capitalize on emerging trends. As a result, society is now flooded with iPods, iPads, and iPhones.
Beware, though. Sometimes the horizon to watch is not the marketplace, but government regulations. For instance, if your company repairs industrial gas boilers, you know a time is soon coming when you won't be able to replace "like for like." To survive, you'll need to identify viable (probably greener) alternatives to sell your customers, all while maintaining your ability to repair the boilers currently in place.
Just this last week I read about 32 power plants that will have to shut down in the USA because of new regulations from the Environmental Protection Agency. These plants, which produce enough electricity to light up 22 million homes, are primarily coal-fired, and, according to an article in the New American, would cost more to retrofit than to replace them altogether. In other words, if the owners of these power plants want to keep producing electricity, they must find alternative, cleaner ways to do it.
I know that change is always painful, but most folks I know would rather travel by automobile than by steam locomotives or horse-drawn buggies. The lesson? Business owners must keep one eye on the horizon and maintain a flexible focus, changing their operations when necessary if they want to survive.
By the way, the horizon also includes what customers are thinking. It's short-sighted to assume your customers will always want to buy exactly what you're selling in exactly the manner you're selling it. Think about your own personal buying habits. New innovations are continually influencing how you think, re-shaping your old habits into new ones.
Mobile phones are one example, but also consider online purchases. You can save time and gasoline by buying online, so more people are doing it. As a result, online holiday purchases in 2011 are up 15 percent over last year.
As proof, Fed-Ex, one company that delivers those packages, reported its busiest delivery day ever was December 12 of this year. And people within the US Postal Service are also telling me they've noticed a huge uptick in the number of packages they're delivering.
Unfortunately, the USPS is another example of slow adaptation. They're suffering from micro-management and a business model that punishes productivity instead of rewarding it. As a result, they are crumbling under their own weight, and they run the risk of total collapse if they cannot find a way to adapt effectively.
As an example of successful adapting, Xerox started out a company that sold photo paper. But when they developed a machine that made photocopies they wisely adapted their business model.
Then there's Tiffany's, the purveyor of fine jewelry. Did you know they started as a stationary company, but shifted their focus when they added silver jewelry to its displays and found the jewelry sold better than the stationary?
The Gap is another example. They started off as a record store in the late 60's. They weren't doing well, so they started selling blue jeans to try to attract young people to their store. When the jeans sold better than the records, the records went away, and The Gap is now a multi-billion apparel business.
Again, the goal is focused flexibility. You'll survive in the short term if you keep doing what you do well, and you'll survive in the long term if you're flexible enough to adapt when you see things changing.
What about your business? Do you have focused flexibility? Nothing lasts forever, especially if you don't - or won't - adapt when necessary.
