- John Sculley, former CEO of Apple
There are many reasons why people fail to see the future, even when it is pounding down their front door. Some are too busy in the now to see the world changing around them; some see trends and mistake them for fads; and some are simply too invested in today's skills and business models to consider their evolution. No matter the etiology of the disease, the symptom is usually the same--bold and unassailable declarations such as "I will never..." and "Our customers will never..." If you hear these words, recognize them as the danger signs they are.
The threat of overlooking vital market trends is certainly not a new phenomenon. Just ask the powerful railroad companies of the early 20th Century, which failed to understand the changing needs and technology of society. Stuck in the mindset that they were in the rail business and not the transportation business, railroad companies watched as rail passenger travel declined 84 percent between 1945 and 1964. In the first half of the 20th Century, the Pennsylvania Railroad was the largest publicly traded corporation in the world, but by 1970 the merged Penn Central declared bankruptcy.
The forces that undid Pen Central 40 years ago are the same forces that torpedoed Borders in recent years. As recently as two years ago, Borders Group operated 511 superstores across the globe; late in 2011, the company liquidated its last store. Unwilling to see (or adapt) to the way media sales first went online and then went digital, the company struggled. It first turned to Amazon as its online store provider, but by the time Borders tried to establish its own online store in 2008, it was too late.
How do highly compensated executives--recognized and experienced experts in their field--miss profound change on this scale? You do not need deep insight into the railroad or book selling business to understand how this phenomenon works. If you are over 40, you've experienced it firsthand. Chances are you have repeatedly declared (either aloud or silently) "I will never..." only to prove yourself wrong time after time:
- In 1994: I will never own a personal computer.
- In 1997: I will never waste time on the information superhighway.
- In 1999: I will never be tethered to a mobile phone every hour of my life.
- In 2001: I will never submit my credit card number through a Web site.
- In 2003: I will never need a smartphone--my email can wait until I get to my PC.
- In 2007: I will never share my personal information on those crazy social networks.
Many of those who laughed at the nerds typing away on their Atari STs and Commodore Amigas are now on their third generation of personal computing, having transitioned from desktops to laptops to tablets and mobile. The people who declared they would never be stupid enough to trust their credit card number online are today storing their Visa numbers on Amazon and checking their investment accounts on their cell phones.
When we personally misjudge the future, the implications are relatively minor. The folks who mocked Treo and Blackberry addicts changed their minds, bought iPhones and Androids, and caught up to the early adopters. Conversely, the organizational implications of misjudging the future are far more serious. "I will never..." too easily becomes "Our customers will never..." which is expressed as "Our organization will never..." By the time "never" becomes "OMG!," it is too late to steal market share from more agile and established competitors; it is even more difficult for a fading brand to recover lost trust and convince consumers it is still relevant. Buy books at Borders? That is so 2007!
Today, what are you saying you will never do? How will your 2017 self prove your brash and ignorant 2012 self wrongheaded and shortsighted?
How about, "I will never lend money to a stranger through a peer-to-peer (P2P) web site?" Many bankers today think peer lending is a minor blip, but with the leading P2P lending sites growing more than 100% per year, this may well be a social business model many will regret discounting. (Given all that goodwill many of the big banks have accumulated, I'm sure they have nothing to worry about.)
Other executives say "I will never spend more on social media than traditional advertising," even though the transition is already well underway; Coca-Cola has shifted 20 percent of its marketing budget to social, for example. The trend toward social will not abate soon. Forrester reports that 55 percent of marketers expect "created social media" to grow in effectiveness while 21 percent expect the same of television and just 10 percent anticipate radio advertising effectiveness to rise.
The cure for the disease of business myopia is quite simple: Never say never. Recognize that the half-life of "never" has never been shorter. The quicker we appreciate that "never" is not a very long time in today's environment, the sooner we can start leading our organizations to embrace the remarkable changes ahead.