Understanding Your Business
Successful companies continually ask, “What is our business?” Complacency can easily set in with success, leading companies to believe that their winning streak will continue indefinitely. However, just as lottery winners don’t play the same numbers again, businesses shouldn’t assume that the same strategy will keep yielding victories.
Challenging a successful formula is rarely popular. It involves rocking the boat and questioning the principles that brought about success. Yet, management that fails to challenge the status quo can become prideful, complacent, and arrogant, which can quickly lead to failure.
Lessons from the Past
In the 1920s, the coal mining and railroad industries were the most successful. They held monopoly positions and harboured an unshakeable belief in their eternal endurance. Today, however, both industries have been eclipsed by competition from other sectors that have become more appealing to consumers, such as petroleum and air travel.
Often, industries that have become obsolete failed to ask themselves the right question: “What is our business?” Had the railroad industry viewed itself as a transportation business rather than narrowly defining itself as a railroad business, its success might not have slipped away so easily.
The Current Landscape
Today, social media companies like Facebook, Twitter, YouTube, Instagram, and LinkedIn are enjoying a period of success reminiscent of the heyday of coal mines and railroads. They are constantly in the public eye and have collectively positioned themselves under the banner of social media.
While these social media companies may remain successful in the foreseeable future, they must continue to evolve to maintain long-term success. Asking the right questions and continually pushing boundaries may not guarantee sustainable success, but it could help them avoid being eclipsed by an unanticipated innovation.
The Way Forward
To prevent future decline, it’s crucial to avoid the mistake made by the coal and railroad industries. Keep asking the right question: “What is our business?” Challenging success requires tremendous self-discipline and, above all, courage.
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