The most dangerous phrase in business innovation is: ‘WE'VE ALWAYS DONE IT THIS WAY!’
Geplaatst op 8 juni 2017 door Ronald Swensson

How often do you hear the words 'WE'VE ALWAYS DONE IT THIS WAY' around your organization? Wasn't it only last month that a senior manager blocked a new employee's suggestion with that exact phrase, adding: ‘IT'S NOT OUR RESPONSIBILITY'. If all this sounds overly familiar, it's time to seriously examine the way in which your organization operates in today's rapidly changing environment. Certainly, it's important to build on your past successes and not simply change for the sake of change, which is a costly exercise in itself. But, never forget that, even if you don't change, your competitors and customers may. Too often, people confuse necessary change with change for the sake of change. Every organization - regardless of its past success - should always remain open to new ideas. It's a recipe for disaster to say: ‘LET’S KEEP IT IN MIND’, without at least proper assessing if an idea is actually working. 

Take a look at a computer company that dominated the personal computer business for generations. IBM had incredible market share, rising stock prices and amongst the highest paid employees in the world. When I did my sales training with them in 1985 – I worked for a large and well known ÌBM reseller ‘Infotheek’ in Holland - we were told that only three personal computer manufacturers would be in existence by the turn of the century . Never was it considered, even a remote possibility that IBM might not be one of them. In 1993, IBM posted a US$8 billion loss - at that time the biggest in American corporate history - and Lou Gerstner was hired as CEO from RJR Nabisco to turn the company around. Most people at IBM said to each other: ‘IT HAS BEEN TRIED BEFORE’ when Gerstner unveiled his ‘change plan’. They stood cross-armed and watched passively what was happening. Changes therefore got a slow start. Almost ten years later IBM could sell its personal computer business to Chinese technology company Lenovo. And the other two everybody thought that would be in business by the turn of the century? It was Compaq - acquired by Hewlett-Packard in 2002 and defunct as a subsidiary as of 2010. And Olivetti - sold its PC business in 1997... 

The best thing in business innovation is to learn from the mistakes of others. Here are three major lessons learned from some of the biggest business blunders ever occurred. 

Mistake #1: Ignoring your own innovations 
Back in the 1970’s Xerox opened the Xerox Palo Alto Research Center (PARC). The facility developed many modern computing technologies such as the graphical user interface (GUI), laser printing, WYSIWYG text editors and Ethernet. From these inventions, Xerox PARC created the Xerox Alto in 1973, a small minicomputer similar to a modern personal computer. This machine can be considered the first true Personal Computer, given its versatile combination of a cathode-ray-type screen, mouse-type pointing device, and a QWERTY-type alphanumeric keyboard. But the Alto was never commercially sold, as Xerox itself could not see the sales potential of it. Senior management thought: ‘THE MARKET ISN'T READY FOR THIS’ and told the people at PARC: ‘LET'S KEEP IT IN MIND’ and that was the end of the Alto story... almost... 

There once was a young man named Steve Jobs and in 1979 he was invited to take a tour of the Xerox PARC facility. And during this tour he was introduced to the Xerox Alto and all its (at that time) 'jaw-dropping tech'. A ‘mouse’ moved the cursor on the screen and clicked on icons, opened and closed ‘windows’ and wrote emails to other people at PARC. Jobs gradually got more and more excited and took this inspiration back to Apple and the rest, as you know, is history. Jobs is quoted as saying, ‘They just had no idea what they had’ because he was told: ‘WE'RE NOT IN THAT BUSINESS’. 

Mistake #2: Not looking beyond your existing business model 
Back in 2000, Reed Hastings, founder of the then tiny, but thriving company called Netflix, met up with Blockbuster CEO John Antioco and his team. Blockbuster was the kingpin of the video rental industry in the United States. Hastings suggested they join forces and work together. Netflix could help run Blockbuster’s online services while Blockbuster could run Netflix’s offline DVD rental through their large network of stores. Hastings was laughed out of the room... Blockbuster continued focusing on their existing business model - physical stores that rent out videos. In 2004 Blockbuster CEO John Antioco realized that Netflix and others were becoming a threat and pumped money into a digital platform which he hoped would pave the way to Blockbuster’s bright future. The Board of Blockbuster was not amused about the $400 million these moves would cost the company and fired Antioco. They did not believe that growing an online business was the right strategy to take. ‘NOBODY IS DOING IT’ and ‘WE'VE NEVER DONE THAT BEFORE' was the Board's argumentation. Just a short 6 years later, Blockbuster filed for bankruptcy and you know what is happening with Netflix... 

Mistake #3: Not changing fast enough 
For a long time Nokia defined the mobile phone industry. It was the world’s no. 1 phone company and sold its billionth phone in 2005. Shortly after, iPhones and Android came into the market and customers weren’t looking at Nokia anymore. Why? Nokia realized a bit too late that they had to compete with the smartphones being produced by Apple, Blackberry and Samsung. While Nokia continued releasing solid phones with top-notch build quality, the Symbian software that they used in their touch-enabled phones were sub-par compared to Apple and Android phones. Nokia was making great quality phones with amazing cameras, but lagged behind in user experience. ‘WHY DO WE HAVE TO CHANGE?’ and ‘WE'RE NOT READY FOR IT’ most Nokia people thought when they saw the first smartphones... 

Mistake #4 (as a Bonus): THINK! AND THINK AGAIN! 
In 2013 Microsoft announced the purchase of Nokia's phone assets and finalized the deal in April 2014. The total purchase price ended up as approximately $7.9 billion. In 2015 Microsoft wrote off $7.2 billion related to its Nokia acquisition... Microsoft CEO Steve Ballmer described in 2013 his move as ‘a bold step into the future’ and 'the next big phase of the transformation of Microsoft as a devices and services company’. The announcement slapped the failure sticker on the last major move made by Ballmer, who pushed for the Nokia deal in his final months in office... Yes, sometimes it is better to think and think again... 

Remember the sentences in capital letters! 

This post is also published on LinkedIn.

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