One story my University Professor used to teach about the limitations of a corporation’s executive team was about a ship in the middle of the ocean. On the ship was a rough, brawny captain who was rather myopic and hard of hearing. The captain and crew followed the principles of majority rule on decisions about navigational direction. They had a very skilled and capable navigator who knew how measure ship speed and triangulate the stars on voyages, but the navigator was not well liked and frequently appeared to be withdrawn.
Then, in the terror of being lost, the captain and crew made a spur of the moment decision to follow the most charismatic, articulate, and persuasive of the crew members. They ignored and ridiculed the navigator’s suggestions, remained lost, and eventually were killed by pirates in a battle at sea.
This situation happens frequently at companies large and small. You try to introduce the new solution, but are given excuse after excuse about why it can’t be done. You may even be portrayed as a loose cannon.
Which is why your company is suffering, and your competition is gaining ground. They’re more nimble, more focused, and better equipped.
When you have an executive team that focuses on that old business model that has stood the test of time, they will almost always kill a new idea. Especially from the Web 2.0 social crowd. In our current business era this will almost always lead to disaster.
There are many organizations learning this lesson today. Every day we hear about newspapers and magazines going out of business or being acquired by larger old media. TV ad revenues are down, physical music and software stores have all but closed, and books are moving to devices like the Kindle.
Yes it’s mostly old media so far, but a case can be made that organizations that fall behind in this new era will suffer.
Best Buy has embraced Enterprise and Web 2.0 and left Circuit City in Bankruptcy. Was it due to Best Buy’s new 2.0 business practices? Not entirely, but Best Buy did leverage the new 2.0 tools online (especially their own web properties) to build a sizeable lead over Circuit City.
“Circuit City was incredibly successful in the 1980s and 1990s, but they never changed after that,” says David Schick, an analyst at Stifel Nicolaus. If it had adapted, it might have ended up like its chief rival, Best Buy.
And now Best Buy is going after connectivity. Product and customer connectivity. No doubt their new business model will change the way we interact with consumer technology and potentially improve their bottom line.
Does your organization listen to you? Best Buy did. They listened to their young navigators that understood the new business climate. They left old business models behind, adapted to the new environment and won.
(Cross-posted @ Seek Omega)