If You Aim To Long-Term Success, Be Ready To Destroy
Strategy is not only about creation
Imagine you’re a highly successful businessperson. Your company name is on the Fortune 500 list.
One beautiful morning, you walk into your large, sun-filled office building. Your employees are smiling at you, and you’re smiling back. You feel like a success.
And then you enter your personal office to meet me. And I tell you that you should prepare yourself to bring all of that down.
How would it feel?
Dinosaurs from the past
Do the following names sound familiar to you: NEC, DEC, Compaq, Atari, Commodore, Amiga, PET, Altair?
All these businesses used to sell computers and were successful. But for various reasons, you can’t buy a laptop with their logos anymore.
They didn’t manage to stay afloat, though Apple, Dell, or HP did.
And their stories aren’t just business cases. Behind them lie personal tragedies, unfulfilled dreams, and broken destinies.
Ken Olsen, who co-founded Digital Equipment Corporation (DEC) in 1957, was forced to retire in 1992. He faced criticism for having overlooked the personal computer era.
The business was on the decline at the time, but Olsen’s retirement didn’t help much. In 1998, Compaq took over DEC. However, Compaq itself was acquired by HP four years later.
What can we do to avoid their fate?
The End-of-History Illusion
If I asked you if you have changed since 2013, you’d most likely say “yes.”
However, if I asked you whether you expect to change in the next ten years, you, like many others, would probably say “no.”
Scientists call it “the End-of-History Illusion.”
We tend to believe that the point in time we live in represents the end of history. We think the future will be pretty much the same as the present – even though the past was different.
Evolution is to blame for that.
Our ancient ancestors didn’t worry about what university their children would attend or how to pay off the mortgage. They lived in the here and now – a pipe dream for many of today’s entrepreneurs and executives.
So, we as a species haven’t learned to think about the future properly. Many fallacies and illusions bias our future thinking.
When we build a business – with its vision, assets, brands, and corporate culture – we fall into the same trap. We believe that we are making it to last forever.
But if we don’t know when and how to destroy it, we may get into trouble.
Build to destroy
Industries are different.
We buy and wear clothes and shoes roughly the same way we did 500 years ago. We wore jackets, trousers, and leather shoes 100, 200, or 300 years ago.
We cook food, take a shower, and play football in the same manner our parents did.
But I don’t even remember the last time I wrote a letter by hand.
Yet, all industries are changing. So, we must overcome our natural fear of change and ask ourselves when and how we should redesign, reshape, or rebuild our business model from scratch.
Because if we don’t do it, somebody else will.
Books teach us that strategy is about creating, expanding, and developing. But it is also about destroying, demolishing, and dismantling.
Most of the top 10 oldest businesses in the world are European wineries. This is an industry where loyalty to tradition is more important than innovation.
But if you’re in another business, you should regularly ask yourself some unpleasant but necessary questions.
Unpleasant questions
What are the ways to better solve the problems your customers currently address using your product? Even if these ways exist only in theory, think about them thoroughly. Every innovation was once just a theory.
What startups are trying to steal your customers? Even though they are below the radar so far, and you are on top, this might change overnight.
What customer needs does your business not satisfy?
What other values can your business create for customers?
What parts of your company can you remove painlessly?
What could potentially kill your business in the future?
In one of the House of Cards series episodes, Tibetan monks spend several days creating a Sand Mandala at the president’s house.
A Sand Mandala is a very intricate and beautiful multicolored sand drawing on a board. Creating it takes a great deal of time and effort. However, as soon as they complete the mandala, they destroy it. Through this, Tibetan monks emphasize that everything in the world is only temporary.
You may watch the process here.
Your business is also temporary, no matter how hard you work to build it. If you don’t destroy it once to build a new one, somebody else will.
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One of the things about getting older is experiencing all the change personally. What was once stable is now gone. The hot companies have merged or disappeared. Some things remain, but they’ve often changed form.
It’s the circle of corporate life.
Change is coming. Anticipate it. Create it. Just don’t wait for it to smack you in the face.
Many thanks!
The pace of change differs from industry to industry. Moreover, is some industries small incremental changes lead to a breakthrough one day. For instance. the shipping container invention blew up the industry and turned it upside down. And we must be psychologically ready to such leapfrogs.