75% of S&P 500 firms will be replaced within 15 years.
With the speed of technology and fast-moving world of innovations, companies have to do everything that they can to keep up. Noticing the relevance of innovations and follow new trends is critical for leaders in order to maintain their position on the market. There are plenty of corporations which were leaders but they didn’t develop as fast as the market and suddenly they lost market shares. According to the research conducted by one of the consulting company: 75% of S&P 500 firms will be replaced within 15 years. It means that companies have to adapt themselves to changing world and learn how to implement new strategy straight to the business.
New trends: Lessons companies must learn
There are examples which show what happens if corporations don’t follow trends and new rules. It is common knowledge that people learn the most from mistakes, so we would like to show you a couple of them:
There is no need to introduce Nokia, it is a common knowledge that it was the world’s leader of mobile phone-maker. Now it is on the opposite side - Nokia is regarded as one of the biggest failures. It held certain market shares in 2007: 48,7% of the whole market of phones was under Nokia’s control but only 6 years later they owned 3%. How is it possible that such a huge company with the best engineers, the leader position, strong competitive advantages lost almost everything?
If we want to keep it simple, the answer is that the better players such Apple and Samsung appeared, but trying to analyze the situation we discovered that factors causing the Nokia’s collapse weren’t only external. In the contrary to what most people think, it’s not because they neglected their duties to conduct researches - actually, they spent a great amount of money on research and development. There is no doubt that market was changing very fast and Nokia was trying to response to these changes, but implementing new products was to slow. New customers’ needs created by Apple and Samsung came out and adapting products to them was crucial. Instead of adapting to these changes, Nokia wanted to create something new, what didn’t cover new needs. The focus on clients wasn’t sufficient. Furthermore, it is obvious that leading, huge corporations have more difficulties to response to changes, because of their size and former habits. Being a leader, in this case, didn’t help, they overestimated the strength of their brand and didn’t expect such a fast lost of the leader title. Nokia also overstated relevance of hardware over software. It turned out that both systems hardware and software are important in developing products and diversified teams are a key to achieving success.
Now BlackBerry, the company which was a prominent smartphone manufacturer in the world and the former favorite brand of Barack Obama, is supposed to be a legend more than the organization creating the present. Mostly we see this device in the older movies rather than on the streets. In 2011 the company had sold almost 50 million of devices, 5 years after it has sold 4 million, it was clearly a result of the expansion of Android and iOS.
The most significant mistake, which was made by this company, was ignoring approaching of new technology: the touchscreen. Strong market position and self-confidence made the company thinking that there is nothing that can be the real threat to them. But they didn’t take into account one thing – you can lose your position not only because of coming a new player on the market, but also due to redefining the whole market and changing the way of thinking. Furthermore, in this case, people started believing in Bring Your Own Device approach breaking down existing rules. Something that BlackBerry didn’t foresee.
MySpace was a famous social networking website, by late 2017 considered as a leader in this area. At its peak in 2007, there were over 100 million users worldwide, the number of users has declined to 15 million users in 2017.
MySpace fast success, and after this even faster failure, proved how important adapting services to customers is. After their success, they still desired to develop forward. Selling equity shares to the significant investor was the way of obtaining funding, but also it caused that MySpace had to concentrate more on trying to reach high profit over the development of the social networking website. At the same time Facebook appeared on the market, they were looking at clients carefully, watching their needs and behaviors and as a consequence of these observations, they tried to create the most suitable product to users as it was possible. MySpace didn’t concentrate on customers needs so much. This case study shows that excessive focus on turnover instead of driving to realizing long-term goals and implementing innovations can lead to failure.
Kodak was the giant company well-known for everybody, by inventing roll film and enabling people to keep their memory alive they made a great impact on society. But market disruption came and it had a tremendous influence on the worldwide company. In 2005 total revenue amounted to $11395 million, versus $1543 million in 2016.
They were proud of talented engineers who created the company, one of them invented digital camera technology, but instead of developing the idea and building an impressive competitive advantage on it they decided to keep the discovery for them. They suspected that it would kill their current business, but they should have borne in mind that discovering this technology is inevitable. Several years after it happened new companies bring digital cameras into the market and revolutionized the market.
Time seems to flies by faster than ever and doing nothing as well as resisting implementing innovations may be regarded as shifting back and even may have the effect of the bankruptcy.
THIS IS HOW IT SHOULD BE DONE
Following case studies prove that no matter what position company has, it is forced to change in parallel with the world. In order to maintain actual position or even achieve something more, corporations should follow trends and take appropriate actions regarding them. It is important to not only changing the particular service or product but the whole way of thinking.
The key question is how to do it? How to suddenly change the way of thinking? Taking inspirations from startups may be something helpful for you. These young, innovative organizations have something that corporations miss. It is the reason why organizations should lean on startups and trying to implement their approach into companies’ structures. We have created the unique way of doing it, bringing startup thinking into organizations and reacting fast to changes around. Below we provide you with a short instruction on how to do it properly.
First of all - corporations have plenty of ideas on how to innovate, but the real challenge is to choose which one should be implemented. We run workshops based on design thinking methodology with the highest focus on clients. In this phase, the priority is fast verifying ideas by creating the prototype and accessing it by real clients.
The second phase is called building MVP (minimum valuable product) basing on lean development methodology. The aim of this part is creating as simple product as it possible, later testing it with the clients and adapt the product to their needs. Thanks to fast building MVP we are able to check our vision with the clients, prepare better product and verify ideas.
The third stage is the further product development in lean methodology, it enables us to integrate the product with existing systems.
Any comment you want to share with us? Drop us a line: firstname.lastname@example.org.
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