Sadly, nothing lasts forever. However, this does not seem to stop so many successful companies from believing that their brands have become so powerful, so unique and so entrenched in the consumer psyche that their companies will never fade or die.
The “it will last forever” syndrome is mostly an affliction suffered by senior management that comes in the latter years of a company’s success. At a time when the company is often functioning as a near monopoly, or commanding a market beating price premium and enviable customer loyalty. From the outside it would look like this company is at the top of the world, and seemingly at the top of its game too. When long entrenched rivals seem unable to touch it and young, agile new competitors talk big but wither away quickly. This is usually when the management myopia sets in. When they bury their heads in the sand and repeatedly ignore the small but unmistakable warning signs of future decline.
Ignorance is bliss because what these managers never experienced was the many years their company’s spent putting the building blocks for success in place. Blocks built by taking big risks that helped them grow, get ahead and stay miles ahead of all their rivals. It was this hunger in the belly and the lessons learned from those many failures that helped develop its never say die attitude and unassailable competitive edge. The company mantra used to be all about innovation, R&D, thinking laterally, entering new markets. Often launching new products on nothing but a calculated hunch and a prayer; not about protecting their bottom-line to please Wall Street, every quarter.
These new managers end up doing nothing but looking inwards in the hopes of protecting their current market share, which in the end has exactly the opposite effect. They create shareholder value through cost-cutting and portfolio reduction; not by innovating or growing their product portfolios. If there is expansion then it is usually driven by buying up competitors and smaller companies, but all too often without any long-term strategic focus or goals. In the end, they simply end up depleting their companies’ once deep cash reserves. Sadly, fear of failure has driven the majority of their decisions, not hunger for success.
This is the reason so many great iconic brands (and hundred year old companies) are dying slow, painful and inevitable deaths today.
“The stream of high-profile departures from Research In Motion Ltd.’s marketing department over the last few months has put the spotlight on an area where the BlackBerry maker has traditionally been weak: understanding and talking to ordinary consumers.” Read more at Wall Street Journal:http://on.wsj.com/kluJiu
I worked with RIM as a result of a partnership one of my clients had with them around 2002. At the time BlackBerry ruled the roost. They were the only smartphone and had a near total monopoly of the corporate market and the “Road Warrior” segment. In fact, every corporation and service provider was courting and wooing RIM to the point that each one of their employees seemed to believe that they had just invented sliced bread; they were not arrogant, just thrilled – it felt like a company that believed it had conquered the summit.
Except for one problem – their device was crap!
This is the issue I had with BlackBerry at the time. It was called CrackBerry by business people because they said once you picked one up it was impossible to put it down again. But what RIM failed to realize or acknowledge then and for many years after, was that it was not the beauty, ease-of-use or the user experience of their devices that people were addicted to but the access to 24×7 emails and information it gave them. And that BlackBerry was dominant because nobody else offered the same access. Not because they had invented a device nobody could live without.
As a result the other blindness they suffered was that they never anticipated or cared about the consumer market. Apple walked in the back door and totally blew them away. Suddenly, BlackBerry was faced with increased competition in the business segment from Microsoft and others, and had totally missed a huge opportunity in the consumer market; which Apple realized can be easily transferred into the corporate one with a better device and user experience.
It is a classic trap that most companies and brands fall into. When they totally dominate or have a near monopoly of a market or segment, they stop doing the one thing that allowed them to become so dominant – innovate! Instead, they rest on their laurels, build opaque walls around themselves, stop listening to customer needs and begin to believe that their customers will blindly follow them forever.