Innovate or Die

By on February 26, 2013

HMV, Comet, Oddbins, all good UK companies, argues management consultant Campbell Macpherson, but companies that couldn’t change their business models fast enough to survive in a modern age.

Successful innovators are never complacent. Complacency is the killer disease every CEO needs to inoculate their organisation against. The moment your business becomes number one in its market is the moment you need to work out what you need to do differently in the future.

It is easy to change your business when you have a ‘burning platform’ (to coin that well-worn phrase). A true innovator changes their business when they are at the top of their game.

And yet I know of several organisations that have expended so much energy in getting to the top that they find it almost impossible to believe that their battle has only just begun. They want so badly to believe that everything will be fine as long as they just keep doing the basics well. But it won’t. Their industries are changing around them, and if they don’t innovate, they will soon become yesterday’s leaders.

Question your industry’s right to exist

Thanks mostly to the web, entire business models are becoming defunct. Yours may be next. I recommend using rigorous scenario planning to help you prepare for the future and work out how to change your business accordingly. No-one at Encyclopaedia Britannica saw the CD-ROM coming (let alone Wikipedia) until it was too late. The web lacks an authoritative content provider. Could this have been Encyclopaedia Britannica? We will never know.

It’s difficult to change your business model. Just ask any of the companies above. Internet downloads tore the heart out of HMV and they simply didn’t want to believe it was happening. By the time they had made the decision to morph into a more general consumer electronics store, this industry had also moved on so quickly that this strategy too was unsustainable.

One of the best examples of a company that successfully changed its entire business model is Microsoft. The internet caught this all-conquering giant napping in the mid 1990s. An upstart start-up by the name of Netscape ruled the fledgling internet and the mighty Microsoft failed to foresee the importance of the web. But as soon as Bill Gates and Steve Ballmer realised what was happening – they acted; investing an extortionate amount on revamping their business to be at the centre of the online world. Microsoft remains one of the world’s largest companies today and innovation is at its core. Anyone remember what happened to Netscape?

Innovate or perish? It’s not too hard a choice when you think about it.

You must be logged in to post a comment Login

Leave a Reply