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One Last Gift From Toys R Us: 3 Strategies to Avoid the Same Fate
Once an iconic presence in my life, Toys R Us was the “go to” toy source when my now college junior was in search of the perfect birthday gift or ideas for his Christmas list. I remember walking the aisles with him in search of the best action figure or latest toy as seen on television. Each year, we would take his Christmas list, fight the crowds, and stand in long lines to spend money at this now dead company. It seemed like every friend’s birthday party
was preceded by a trip to Toys R Us to find a cool toy. To be brutally honest, I am saddened but not surprised at the passing of another corporate megabiz. How do these one-time business giants fall so hard and so fast? And more importantly, how do we avoid the same fate with our businesses? How can successful executives be so blind to inevitable failure? These questions should be asked in offices and boardrooms world-wide. We can all learn from the passing of another industry market leader.
I am blessed serve as chairman for an amazing group of CEOs and we are constantly searching for ways to future proof our companies. Toys R Us will be a centerpiece discussion in our next board meeting. A business has seven different life cycle stages: Seed, Start-Up, Growth, Established, Expansion, Mature and Exit. There are internal and external factors that impact an enterprise at each stage. Surprisingly, companies seem to be most at-risk during the mature stage
because executives often become complacent and arrogant about the competitive reality. Following are 3 strategies to avoid the same fate:
1. Execute obsolescence for both methodology and products. This means what you do and what you produce today must become obsolete at some defined point in the future. Think of this like the mobile phone market. At the point of purchasing the latest must-have device, Apple is already designing its replacement. They are guiding us slowly to new way of consuming information. No matter how cool your new phone feels now, someday we’ll look back and say “Do
you remember when we carried our phones?” 2. Force disruption of internal execution as well as external markets. Let’s face it, disruption is scary. It requires executives to think and execute in new ways while letting go of proven success. Start with end in mind and disruption becomes executable. For example, we will be 100% paperless in 2018. Or disrupt a market by knowing we can be more efficient than the government when it comes to space, e.g.
SpaceX. 3. Return to the seed stage of the business life cycle annually. Do this mentally and literally. The seed stage is where ideas and great companies are born. Watered down versions of this stage are often referred to as research and development or innovation. Goodyear is now making tires from green algae. True seeds are a whole new enterprise that is different from the current reality. Think of this like new businesses within your current business. All
seeds may not grow to mature, however the thinking that accompanies each seed is where new opportunities for your business exist. Amazon’s purchase of Whole Foods is an example of seed thinking. I am betting Bezos and his team will grow this seed to the point that perishable groceries will most commonly be purchased from our electronic devices and delivered fresh in the not so distant future. Read More...
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