ROBERT HOSSARY If I Don’t See the Risk
then it doesn’t Exist!
There are countless of examples of Corporations that refused to see the risk to their market dominant positions. The
one that comes easily to mind is Kodak.
Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, reported the initial corporate
response to his invention was “it was filmless photography, so management’s reaction was, ‘that’s cute - but don’t tell
anyone about it’.”
Vince Barabba was head of market intelligence in 1981 at Kodak. In Barabba’s book, “The Decision Loom: A Design for
Interactive Decision-Making in Organizations,” he recounts how he conducted extensive research that looked at the
core technologies and likely adoption curves and trends in the photographic industry.
The results lead to a conclusion that adoption of digital photography would be minimal and non-threatening for about
10 years. Barabba left Kodak in 1985 as little was done to prepare for the oncoming disruption. Nothing much
changed in the years that followed and Kodak became irrelevant in the photographic industry.
A more recent case study in avoiding reality is the Blockbuster and Netflix story. This is a study of two businesses in
the same industry targeting the same market. Netflix looked at its customers and catered to their changing needs.
Firstly by offering a postal service to deliver and retrieve the rentals from their customers, then by adopting
technologies that removed all barriers to their customers allowing Netflix users to stream their desired entertainment
to any device in their home.
Blockbuster held on fiercely to its business model despite changing needs of its customer base allowing Netflix to gain
a tremendous foothold. Blockbuster, once the world leader, will close its last rental store in the United States in 2014.
The business world is littered with similar examples. So what is the key lesson? How do you as a business professional
spot these potential disruptions to your business?
Here are 5 tips that I have learned and used to enhance my career.
- Research new technologies that are being created: New technologies may not be available commercially for
several years but they will eventually disrupt the market. The clearest example of this is the rise of 3D printing.
Industrial 3D printers are changing the way we think about and interact with manufacturing. - Consider what the next generation of customers need: Don’t just cater to the existing customers of your
business. The Netflix generation of consumer consumes entertainment in a very different way than the
Blockbuster generation of consumer. Cater to the next generation of consumers for your business. - Don’t be afraid to experiment with a new channel: Kickstarter.com is changing the funding model for
entrepreneurs. Peer to peer lending models are creating a new paradigm for investors and potential threat for
financial institutions. - Remember that your competitors aren’t just in your industry: There was a time when you owned a watch to tell
the time; a Walkman to listen to music; a Gameboy for entertainment; a mobile phone; and a computer to access
your emails. Now all these items have been replaced by one device. Who saw it coming? Apple and Sony
Ericsson. Look at how consumers consume - learn how to spot trends in behavioural change or at least, employ
professionals that can. - Take time to stop and look at WHY your business exists: Sometimes we do what we do because we’ve always
done it. Take a breath and ask yourself how does your business benefit your customers? How can you increase
the benefit to your customers? Is your business / product relevant to your customers? Most importantly, are your
customers benefiting and relevant to your business? You will be surprised at what you tell yourself when no one
is listening.
So remember that if you don’t see the risk coming, believe that it still exists! Don’t believe it
... think about these ... Vacuum Tubes, RCA, Film, Kodak, Fax Machines, Laser Disc,
Blockbuster, Carbon Paper, Newspapers, CRT Monitors, Transistor Radios.
Robert Hossary is General Manager (NSW / ACT) of the American Chamber of Commerce
based in Sydney Australia. AmCham is Australia’s largest international Chamber of
Commerce, providing assistance to United States and Australian companies to promote
trade, commerce and investment between Australia and the United States in the Asia Pacific
region. Contact Robert at AmCham on +61 2 8031 9000 or [email protected]
or visit http://www.amcham.com.au