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What Killed Blockbuster, Taxis, Retailers and Hotels is not what you expected

Brian Solis
Brian SolisPrincipal Analyst
As Principal Analyst and futurist at Altimeter, I study disruptive technology and its impact on business and society. In my reports, articles and books, I humanise technology and its impact on business and society to help executives gain new perspectives and insights. My research explores digital transformation, customer experience and culture 2.0 and "the future of" industries, trends and behaviour.

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Perhaps you’ve seen an image gone viral, in any of its countless incarnations, circling the tech internet and social media. In its various versions, it reads something like this:

     Netflix did not kill Blockbuster. They did it to themselves, with their ridiculous late payment fees.

     Uber did not kill the taxi business. They did it to themselves, with their limited number and fare control.

     Apple did not kill the music industry. They did it to themselves by forcing people to buy full-length albums.

     Amazon did not kill the retail industry. They did it to themselves with bad customer service.

     Airbnb did not kill the hotel industry. They did it to themselves with limited availability and pricing options.

     Technology by itself is not the disruptor. Not being customer-centric is the biggest threat to any business.

While it seems pithy and conclusive, its virality demonstrates the same qualities that contribute to disruption itself. It’s either shared because…

  1. it reeks of clickbait and appeals to people who are running at real-time speeds, exchanging critical thinking for quick engagement, likes and views, or
  2. it offers the semblance of facts because each of the companies named disrupted their markets, sometimes more than once, or
  3. it validates the imperative of looking beyond technology and understanding the importance of customer behaviours and preferences.

In short, this viral meme is understandably persuasive, at least at first glance. However, with further thought, it’s also overly simplistic, misleading and deficient.

 

With a Leadership Organization Focused on Agility and Innovation, No Organization is Too Small to Succeed or Too Big to Fail

Aside from Blockbuster, not all of the aforementioned industries were “killed”. It’s true that the idea for Netflix stemmed from a $40 late fee for Apollo 13. But it wasn’t late fees that killed it. It was the victim of “out of touchness.” Blockbuster, taxis, music companies, retailers, hotels, et al., experience disruption when they become the very thing they set out disrupt in the first place, purveyors of “business as usual”. Remember, in each instance, the brands that defined these industries were themselves hungry, defiant up-and-comers. Eventually, they became the antithesis of entrepreneurship and innovation, where business-as-usual represented anything but openness, agility and innovation.

As a result, corporate cultures are often rigid, lethargic, political, risk-averse, debt-ridden, and wholly-driven by shareholder or stakeholder value. It’s an all-too-common formula where ignorance plus arrogance can equal ignorance.

At the same time, many struggling companies are indeed also customer-centric. What not all realize or emphasize is the extent to which customers, and employees, are evolving, and how their tastes, behaviours and expectations affect economic risks and opportunities. Being customer-centric is not all-inclusive. It can mean many things. And in a fair share of cases, it can describe great customer service or delightful customer engagement or customer-friendly policies and processes. Customer-centricity also means building an organization literally centred on customers and all they affect and all that affects them, now and over time. This includes trends, technologies, and emerging business models that inspire innovation and transformation in everything from operations to marketing, sales and service to management/leadership to product development, and all aspects of competitiveness.

Purposeful Innovation Sits at the Intersection of Technology, Humanity and Boldness

I’m a digital analyst and a digital anthropologist. So it’s my job to understand the impact and potential of disruptive technologies and also understand how people continue to change as a result. I’ve long said that [insert your tech trend of choice here] is more than technology, it’s also about anthropology, sociology and all social sciences. Said another way, technology is also a human story. It is a means, not the solution in itself. The same is true for customer-centricity. It’s a mindset and a way of doing business, not the sole key to surviving disruption or driving innovation.

When it comes to legacy organizations, not all digital transformation efforts and attempts at innovation are strategic or advanced. I appreciate that the intent and efforts to modernize operations, innovate and update competitiveness are righteous and, more so, critical. But, the reality is that many of the leadership organizations suffer from this “out of touchness”. Like the organizations they’re attempting to upgrade, executives simply operate with legacy mindsets and perspectives. They can’t actually empathize with the people who are reshaping work and markets

Pithy memes aside, every day, there are elite leaders, entrepreneurs and investors who are keenly aware of the prevalence of “out of touchness” and are running at full speed to disrupt them. Why? People are always open to what’s new and better. And, there’s money in it. When it comes to digital Darwinism and the evolution of technology and its effects on business, society and culture, objectiveness, purposefulness and resilience are competitive differentiators and value propositions.

There’s no glory in long-term mediocrity. But, you didn’t wake up to be mediocre today.  In an era of digital Darwinism, disruption is a gift you either receive or one that is given to you. Make no mistake, disruption is constant. Even the disruptors face unforeseen threats and always will.

It’s now a matter of disrupting or be disrupted. To survive and thrive digital Darwinism:

  1. A shift from a mode of “out of touchness” to one of “in touchness”.
  2. Understand how your customers and employees are changing, understand why, and understand what they value.
  3. Move beyond legacy constructs towards more-agile and experimental constructs.
  4. Hire experience and expertise to open new doors and upskill/reskill employees with dated capabilities.
  5. Incentivize and reward risk-taking and experimentation.
  6. Embrace innovation and transformation as strategic investments and not cost centres.
  7. Invest in disruptive technologies and supporting business models as evergreen business utilities.

Individually, they change the course of business as usual toward business with purpose. Together, they represent long-term value and competitiveness that can’t be disrupted by a simple meme.

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