“Blockbuster Files for Bankruptcy!”
Variations of this headline were all over the news last fall, and our neighborhood Blockbuster, along with many others, recently closed, bringing a sad ending to our longtime habit of stopping after work on Fridays to pick up a date night movie.
Blockbuster filed for Chapter 11 protection last September, and on April 26 won final approval to sell its assets for $320 million. That’s sad, considering it once had a market value in the billions. So what brought this industry giant to its knees? Failure to change.
We can all remember when Blockbuster grabbed the market and essentially ran all the mom and pop video stores out of business. It seemed to have it all — name recognition, customer loyalty, and a database with information about who was renting what, when, where and how often. Nobody knew or was more entrenched in the movie rental industry than Blockbuster.
But the movie rental industry changed.
People learned it was easier to order movies through their cable providers, cheaper to get them from a Red Box, and they could get a bigger selection from Netflix. They wanted more choices, convenience and value. Blockbuster lost this portion of the market to competitors because it was apparently either unwilling to change its business model or didn’t understand how to change.
People often find change uncomfortable. We like for our worlds to stay the same because that’s where our comfort levels lie, but that mindset can harm us. We’ve seen instances of employees refusing to learn new skills when their companies brought in new technology. Those employees became obsolete while their colleagues who adapted moved forward and flourished. The same principle holds true for businesses. Any company that refuses to embrace changing trends takes a huge risk.
Your company experiences change all the time from factors such as ups and downs in the economy, new technology or a fluctuating customer base. Change is certain and to be viable you need to understand how to accept and embrace it when trends demand it. Sometimes companies simply can’t survive major industry shifts, as we’ve all seen with some small retailers who couldn’t compete with big-box companies. Yet others found ways to adapt and have remained successful.
As the world changes around you, advance planning and strategizing could mean the difference between failure and not only surviving but thriving. What about your business? Do you need a self-assessment of your own attitudes and ability to change? Consider these questions:
Are you up-to-date on what’s going on in your industry or have you allowed yourself to fall behind?
Are you (and your partners, if applicable) open to changes in structure, strategy, and overall operations?
What technological advances could affect your company?
Will any newly enacted government regulations impact your business?
Do you have a business culture that sees change as an opportunity or fears what could happen in the future?
Are employees’ ideas heard with an “open ear” and given consideration, even if they might seem radical?
Do you have any sacred cows in your business that, for whatever reason (usually emotional), you’ve decided will never change?
Since change is inevitable, keeping a close eye on industry, legislation and trends, and how they will affect your company should be an integral part of your regular business processes and planning. If you think that’s too much work, just remember what happened to a one-time video giant that ignored change.
Laddie and Judy Blaskowski are partners in BusinessTruths Consulting, Inc. and several other businesses, and authored The Step Dynamic: A Powerful Strategy for Successfully Growing Your Business. They can be reached at Judy@BusinessTruths.com.