Requirements For Business Reinvention: Guts, Capital and Support
A recent article in the Wall Street Journal highlighted the different yet intertwined paths of Xerox and Fujifilm. Xerox, once one of the world’s most admired companies, now has a market value that is less than 20% of what it used to be. As a former executive at Kinko’s, I used to rub elbows with the senior people at Xerox a couple of decades ago and one of them told me at the time that they were going to have to significantly reinvent themselves. The demise of printing has been falsely predicted for many years, but the world has certainly changed for Xerox and, while still profitable, it hasn’t found the new path to growth and prosperity
Fujifilm, as you might imagine, started life as a film company. They also had a large joint venture with Xerox to sell copiers. Unlike Xerox, however, they have effectively diversified into new business lines, leveraging skills and assets over a long period of time.
The music industry, Kodak, Schwinn and Blockbuster all saw, like Xerox, a looming disaster yet were unable to transform themselves But let’s not be harsh; its not easy! Just because you can see the train coming down the tracks doesn’t mean that there is an easy way out of the tunnel! The two keys are, 1) anticipating potential trains on your track (having the discipline and processes to scan the environment), and, 2) having the guts, capital and shareholder support to make the change.
In a private company, the guts, capital and shareholder support often reside in one being (or a few people). Public company CEOs often have more challenges, as there are more engineers on the train and the capital is not as patient.
This problem is not just in the realm of large public companies. In the week before I penned this blog I heard of a very successful service provider getting pushed back onto their heels by a very aggressive (and irrational) competitor. I also heard a great example of disruption from a talented investment banker of a law firm getting disrupted by Uber. Yup, Uber! The law firm focused on representing impaired drivers. “People haven’t stopped drinking”, he said, “but Uber is giving them a safe way home with the push of a couple of buttons and killing their business.” I know you’re waiting for a lawyer joke, but this isn’t one. The partners saw this coming and are transitioning to a different segment of the law.
Do you have the processes and discipline in place to look for the train? If you see it, do you have the guts, capital and support to change?