So, Kodak filed for bankruptcy this month (Jan 2012). They should have aggressively chased the digital camera market more or possibly, become a mobile handset company. I was reading an article by Gita Piramal who was tracking fate of large business houses over a span of 50 years. The fall (not complete) of families like Kirloskar, Khatau, Walchand, Nirlon, Orkay, Mafatlal must have been unthinkable in the hey days of each.
I shall be sad but not surprised if Infosys, Airtel don’t survive after 100 yrs. Being focused in only one industry exposes one to risks – regulatory, technological, environmental. Knowing the smart management of such companies, they may survive but turn up to be in some new business like agriculture or banking. Consider Nokia, which was a wood pulp mill company, 150 years back – completely re-invented themselves, grew to be a telecom equipment manufacturer, moved to focusing on handsets, became the Amitabh Bachchan of the mobile handset market…only to realize that handsets had become Internet devices and a great operating system is a must for remaining successful…also, realized that one may have focused on some niche instead of getting sandwiched between Blackberry and Iphone from the top, and Micromax and Chinese handsets from the bottom. Nokia is still alive and kicking…let’s see what line of business they will be in 2050.
Another example of adapting to change is IBM. The first 80 years of existence was a breeze, till by 1960s, Govt asked IBM to slow down as it had a 70% market share by then and was accused of monopolistic practices. As IBM was coming out of this phase, they used the birth of PC to ride back into superstardom…it was temporary as they sub-contracted chips and operating system to Intel and Microsoft respectively, for the first time being done outside IBM. They also under-estimated the shift of computing from business to home market… in trouble again. In early 90s, IBM lost 16bn$ in 3 years; a hundred thousand employees were fired. IBM being IBM re-invented itself yet again, and have become a software services dominated company since 1995, again the largest and best of them all!
For new entrepreneurs building businesses always check out if de-regulation can get big daddies in who can wipe you out (of course, if you can sell to them, nothing like it). Check if some environmental clause being discussed in Doha is not going to derail your plan after 3-4 years. Check on your technology and read on current research on the same – are the standards on which your technology is based robust, universally accepted and do they have an evolution roadmap? If you are OK with all of this, move to your business & operating strategy and hit real hard on that.
You think you must be wide awake because you must be doing great in your business currently. Hence, I am exhorting you to “only smell the coffee” and start thinking differently – you could be moving fast, but the environment could be changing faster!