Wednesday
Oct202010
How to wreck your company
Wednesday, October 20, 2010 at 8:10AM
Learning opportunities are all around us. Anyone interested in Management has a lot to do these days, examples of how to destroy companies are plentiful. To try and fail is a part of entrepreneurship, to try and fail the same way repeatedly is insane.
Photo by anita363 Flickr CC
It is ironic that Blockbuster has filed for bankruptcy and that their problems are based on a lack of change. The company was founded on change. The entrepreneur David Cook had experience from managing huge databases and together with the fact that he found that film distributors would accept being paid 60, or even 90, days after purchase gave him an opportunity to rent films for months without cost. The business was effectively financed by the film distributors and all he had to do was to make maximum use of the opportunity. Mr Cook made a really good job, loading up neighborhood stores with films geared to the local demographics, and the company grew exponentially.
The company was later sold to Viacom, less creative management entered the business, and when Netflix and Redbox came along the unresponsive leadership caused Blockbuster to fail.
Renee Fellman lists five ways to fail in "The Street" blog:
What brings responsible and hard working managers to not act on the things on the list? How is it possible that they did not see the problems, or did they? If so, why didn't they act? Actually I think they all saw the problems but for some reason, that made sense to them, they "could" not act.
It is interesting how one at times can be so busy that the important things have to wait. Sometimes tactical challenges, like liquidity, take up all management resources and nobody acts on the strategic challenges.
To win a war it is necessary to fight many battles, not all of them are crucial or necessary to win. The challenge is to not be too wrapped in the present battle and lose track of the bigger picture.
Have you seen this happen, any thoughts?
Photo by anita363 Flickr CCBlockbuster, an innovation that stopped innovating
It is ironic that Blockbuster has filed for bankruptcy and that their problems are based on a lack of change. The company was founded on change. The entrepreneur David Cook had experience from managing huge databases and together with the fact that he found that film distributors would accept being paid 60, or even 90, days after purchase gave him an opportunity to rent films for months without cost. The business was effectively financed by the film distributors and all he had to do was to make maximum use of the opportunity. Mr Cook made a really good job, loading up neighborhood stores with films geared to the local demographics, and the company grew exponentially.
The company was later sold to Viacom, less creative management entered the business, and when Netflix and Redbox came along the unresponsive leadership caused Blockbuster to fail.
Five effective ways to fail
Renee Fellman lists five ways to fail in "The Street" blog:
- Failing to recognize and respond to a changing environment
- Not paying adequate attention to customer experience
- Failing to develop a cost-effective, customer-centric infrastructure
- Using inadequate hiring practices
- Not implementing a system to ensure accountability
Being to busy to work
What brings responsible and hard working managers to not act on the things on the list? How is it possible that they did not see the problems, or did they? If so, why didn't they act? Actually I think they all saw the problems but for some reason, that made sense to them, they "could" not act.
It is interesting how one at times can be so busy that the important things have to wait. Sometimes tactical challenges, like liquidity, take up all management resources and nobody acts on the strategic challenges.
To win a war it is necessary to fight many battles, not all of them are crucial or necessary to win. The challenge is to not be too wrapped in the present battle and lose track of the bigger picture.
Have you seen this happen, any thoughts?
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