3 Huge
Industries Facing Death Because They Won't Embrace Radical Ideas
This is what
happens when companies stop thinking about the future.
We recently spoke with a senior leader at a
leading manufacturer for consumer power tools--while I won't give the
name, I'll say you definitely know the company well--about its
innovation agenda. The company challenged us to come back with ideas that
were "out of the box," ideas that would be radically different
from anything the company could come up with inside its walls.
It became clear to us quickly that
redesigning the tools was not where opportunity lay. To modernize the business,
innovation would need to come from rethinking the business model, or at the
very least, exploring how a new business model might complement and enhance the
existing business.
Within a couple of weeks, we were back at the
table with an idea that would disrupt the entire power tools marketplace. The
idea was essentially to develop a sharing platform that would unlock an
entirely new rental and DIY market--an opportunity not being pursued by
any of the company's competitors. The pause on the other end was followed
by intrigue, and we spent time discussing the nuances of the business. It
wasn't the business the company knew. It would require it to consider
a new kind of marketplace and a new business model.
Discomfort in the unknown led the company to
stay its course. Instead of changing things up, it's remained
focused on things like new color schemes and batteries for drills.
Many heritage
brands face a similar dilemma when it comes to completely rethinking their core
business. In fact, it's the same dilemma faced by all organizations today. The
idea of pivoting is often paralyzing. The sad truth is, a vast majority of
people within organizations choose to clip paychecks. Their threshold to push
against the system and fight for what's right is often diminished by their
need for self-preservation. The music industry was one of the worst offenders
in the late '90s--its focus on protecting its assets rather than
distributing them led to Spotify and Apple's dominance
in the category.
Paying lip
service to the concept of disruption is not enough. You have to demand
breakthrough thinking, rather than foster safe innovation.
Every industry
needs to shift from protecting its existing business to rethinking, reimagining
and refocusing its efforts on the future of its business. Few legacy
companies are able to operate with one foot in today and one foot in
tomorrow. Meanwhile, some demand it of themselves and their company. Just
look at Mark Fields from Ford in his presentation at this year's CES. He's pushing his organization to lead the automotive industry
by converging Ford's expertise with many of the advancements being
made across mobility, connectivity, and other areas of exciting
exploration.
Here are three industries that have been
resisting innovation--and are running out of time.
1. The cable industry
The internet
is your last stronghold into the home. All you have to do is look at what
happened to the "Ma Bells" to see that the profits you've
enjoyed, the ones connected to the pipes into our homes, are going to continue
disappearing. Services like Apple
TV, Netflix, Hulu, and Amazon Prime, and countless over-the-top
content offerings are destroying your core business and at the same time, the
cost for connectivity gets cheaper by the day. Rather than playing copycat and
creating additional OTT offerings littered with intrusive and nonrelevant
advertising, it's time to focus on building a new business. If
you want to remain relevant, you're going to have to restructure how you
operate, change what you offer, and rethink how you generate revenue. The days
of charging $200 a month and up are coming to an end. And the triple bundle? No
one's interested.
2. The airline industry
Let's face it,
the overall experience of flying today is awful. With the exception of JetBlue's Mint
and Virgin's hip vibe, airlines companies have set a new bar even for snake oil
salesmen. Charging for luggage and food, reducing legroom, asking people to pay
more for specific locations in the same cabin class, and providing seats that
recline less is only opening the door for newcomers to snatch away your
business. Just as the rising cost of hotels gave rise to companies like Airbnb, the
declining quality of airline travel is setting the perfect stage for outside
disruption. And when it happens, they'll all be scrambling. JetBlue and Southwest disrupted
pricing and service once. Who's going to be next to change the way travel
happens all together?
3. The hotel industry
The hotel
business is enjoying some of its best years, but the tide will eventually turn.
With the rise of platforms like Airbnb, which offers alternatives to
hotels, and bargain shopping sites such asLastMinute.com, hotel
pricing will continue to face downward pressure. When we travel on business, we
find it significantly more economical and more enjoyable to choose a place
from Airbnb.
Whether to accommodate leisure travel or business travel, hotels are all trying
to reinvent their experience to attract customers--but they're forgetting
that what they also need to do is work just as hard to rethink their
financial model.
Lots of companies consider their direct
competitors to be their main threat. What they really need to start doing is
looking at the culture of consumer empowerment that's emerging as the force
that will change the buy side of the equation. To save your company from
certain failure, it's time to be disruptive--and that starts by encouraging
your employees and teams to rethink the business you're in and the value you
offer.
BY ADAM TRISK
http://www.inc.com/adam-trisk/3-huge-industries-facing-death-because-of-a-lack-of-innovation.html
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