Trans World Airlines (TWA), Kodak, Nokia, Lehman Brothers, Chrysler, Blackberry, General Motors, Kingfisher Airlines – big corporates with Billions clocked as past turnovers! Then there are companies like Intel, IBM, Samsung, Apple, Sony, Google, Coca Cola. 

 

The first set comprises of Companies who either shut down or filed for bankruptcy or became insolvent! Second set depicts growing organization. But, how are they different? Why a big company becomes irrelevant over the years? Analysts will blame product or strategy failure, mismanagement etc. 

But in reality, companies capitulate when they loose touch with consumers and fail to spot emerging market trends. Great companies evolve and change to keep pace.  

 

IBM, a hardware company till 1979, started transforming to software and consulting firm. They sold their laptop business and in 2011, surpassed Microsoft with a closing value of 214bill USD. But few leaders change domain while at the top. Fear of uncertainty? Take Nokia and Intel. One was leading in handset business and other in semiconductors. Nokia ignored the market movement towards smartphone, while Intel spotted the inflection point and amidst intense criticism shifted to icrochip processor. Look at them now. 

 

Every company, in their lifetime, reaches a crossroad where some hard decisions are needed. One road might demand a paradigm shift like Intel. While the other, although seemingly a safe one, may turn into a dead end. Remember Kodak? 

 

Google is a great spotter. They anticipated rising trend of people seeking information and developed their powerful search engine. Google financed and then in 2005 purchased Android. Few realized their strategy. Google noticed that market is shifting to laptops. Microsoft ignored that trend because they were controlling 90% of the global operating systems and refused to acknowledge that the market is drifting towards better mobility which Google anticipated. This shift became an avalanche and with such rapid swing towards Android based tablets and smart phones Google is changing the game. By 2017, devices using Android is predicted to dwarf Windows based PCs and phones. Soon, mobile devices will cross 10 times of desktop and notebook count. With such slim presence in operating system for Mobile devices, Microsoft could be completely irrelevant unless they make headway in this emerging market. Their challenge is to either stay relevant or cease! Can Windows recover the grounds lost to Android? Now we know why an anxious Microsoft acquired Nokia, another failed giant. But will that acquisition be their savior? Will two past mistakes balance each other? My bet is, Microsoft have missed the boat and will be extinct unless they do something radically different. But they have to acknowledge that they may not survive on their old architecture and thought process. Trapped by near monopoly that makes so much money, they are afraid to venture into unchartered water. 

 

Each successful company possesses a vision and mission. That may not be about their core business but that is immaterial. What is important is that they walk the talk and not deviate. 

 

SONY is known for their electronics goods. Their vision is “To create, innovate and explore the world” and mission is “to be the brand of choice in the hearts and minds of our customers by delivering the best customer experience”. SONY has four Business verticals; Electronics, Motion Picture, Music and Financial Service. SONY’s financial vertical contributes to around 50% of Global earning and it is their most profitable vertical. They evolved.

 

So, what we should do to stay relevant? There can be multiple suggestions but any CEO should answer one question: Is the company adding value to customers? An honest and satisfactory answer can ensure that the company stays relevant. Here are some tips;    

 

1. Analyze The Trend – what are the mega trends emerging in the market? Whoever catches that trend early on and align accordingly will flourish and others will flounder. 

 

2. Create Exit Barrier – Each company operates on certain strongholds. They must create exit barrier and enough stickiness for their customers to stay on happily. 

 

3. Create Differentiation – Any organization has to remain unique from their customer’s perspective and not another “Me too”. They have to answer whether anybody would miss them if they cease to exist. If not then serious introspection is needed

 

4. Adding Value Back to Customer –Today’s delightful proposition becomes a standard package tomorrow. So, one must answer, “am I adding value”? Continuous and fruitful engagement, resulting into customers getting more than they pay for, is necessary to remain relevant 

 

5. Increase Efficiency – Any organization has to start a process of doing things better, faster and cheaper than competition. This will add cushions in the bottom-line which can be used in rainy days.

 

In this dynamic world – everybody suffers but staying strong and relevant is important for enduring competition and surviving. Else we will be crushed. As Hemingway said; World breaks everyone, and afterward, some are strong at the broken places.