I read earlier this week of the final nail in the Blockbuster coffin, the announcement that they would be closing the remaining 30 stores. I’m sure there have been and will be further in-depth analyses of why and how Blockbuster missed the signals that their business model was being obsoleted, just as there have been with Kodak, RIM and others. But to me, it reflects a fundamental issue that I often see in my interaction with corporate innovation groups who are trying to bring new ideas and models into the corporation: An unwillingness to disrupt the status quo, or what I think of as ‘Blinders in the Boardroom’. You wonder what happened in the executive team meetings at Blockbuster. Was there a lone voice crying in the wilderness for Innovation? Was he or she ignored? When did it become apparent that the model was broken and was it too late by then?
Disruption Happens – Obsolete Yourself
All businesses will be disrupted. I don’t have to give the statistic about the short duration of most companies on the S&P 500 to make the point. And the cash is there for innovation—at the beginning of 2013 the S&P 500 had almost $1.25 trillion available cash. The trick is getting in front of how, when and why disruption will happen, and having the innovation or pivot strategies in place to make the most of it. With a treasure chest of new ideas in development, with processes in place to move Innovation quickly to commercialization, the goal is to obsolete yourself–faster than the competitor. Or if you have already invested in an innovative venture, the discipline to recognize when the business model isn’t working and to quickly look for other markets or applications for the product or technology you are developing. A recent article in PandoDaily ‘Why is Pivot a Dirty Word?” talked about early pivots of some of Silicon Valley’s most successful companies. Continuous evaluation, weeding and feeding of internal innovations, permission to shut down and pivot venture business models that can’t be validated – these are signs of a healthy innovation program.
Selling Innovation – A Tale of Two Companies
Last week I attended the Digital Healthcare Innovation Summit in Boston. Talk about disruption! This sector is sizzling with disruption, innovation and opportunity. I met the CEO of Mediscripts at the conference, Erez Lapsker, who is reinventing his company in the face of a changing market. As the leading provider of tamper-resistant prescription pads for more than 30 years, Mediscripts recognized that on-line prescribing would eventually obsolete their core product. The company has now leveraged its reputation of trust and security to build Qology, a secure private network for physicians where practitioners can search, share and collaborate. A great example of moving quickly to get in front of disruption.
But what if you don’t have a forcing function like Mediscripts? There are still many old line healthcare companies struggling with how to innovate in the new world of healthcare reform. An innovation executive approached me at the conference and described a new, innovative service his team is developing. The new service leverages several major healthcare trends, has a huge potential market, serves his company’s current customers and builds on its core competencies. Yet he’s having a hard time ‘selling’ his concept. His question: how do you drive innovation in companies that are fat and happy, suffering with a case of ‘Boardroom Blinders’. In innovation-adverse companies, it’s difficult to make a case for innovation when there’s nothing keeping you up at night–you have a great brand, a healthy bottom line and a strong product roadmap. My advice: in the absence of a forcing function, Fear Sells. Build your case using some of the many examples of companies that got caught off guard in the face of changing market dynamics and emerging technologies—sell fear of obsolescence. I bet the executives at Blockbuster wish they had a little more healthy fear, less cocky confidence and a lot more vision and innovation. (417) Views