Why do companies that have done well over many years suddenly come crashing down? Why would a company like Blackberry after pioneering e-mail on the go and literally pioneering the smartphone suddenly find itself lagging behind in an era where smartphones are king?
It truly beats comprehension how companies that understand how to get things done and even companies that have a level of domination drop the ball after some time and then find themselves pushed into the museums of business failures as case studies of what not to do.
I am sure that there are many reasons but one of the commonest such that I have observed in nearly 30 years of working with and observing some of these organisations is what I call the straight line assumption. This is a position that flows directly from the mind of the leadership and determines the destinies of the organisations.
A straight-line assumption is a belief system that thinks in a straight line. It is a mindset that says all things will be equal and go according to our strategic plan.
It is a thought process that says if we continue to make great products at great prices, if we continue to market aggressively and sell passionately, then we will continue to be in business.
Straight line assumptions are the products of self-centred the leadership that thinks the world revolves around it.
These leaders believe that as long as they keep playing music, the world will continue to dance to it. They are expressions of minds that are full and not expressions of hungry minds. The day a leader loses their hunger for domination is the day straight-line assumptions will set it. It’s all about hunger or the fear of hunger.
To buttress this, let us look at the traditional cable television industry. The straight-line assumption is that as long as they have great shows and sports, then people will continue to pay.
These subscription platforms have many channels for airing content but they are not content creators and so their straight-line assumption is that as long as they can get the latest movies and the best shows on their different platforms, they will continue to be in business.
This straight-line assumption did not envisage a time when a platform like Netflix would emerge and invest over $3 billion every year in content.
So on one hand we have the company that has the platform that does not create content and charges a premium. On the other hand, we have the company that invests heavily in content and has a platform direct to the consumer and at extremely affordable rates.
Now, the conventional subscription channels still held their ground because they were very confident that with a grip on sports nothing could go wrong. However, as it always happens with straight-line assumptions, the unthinkable happens.
League of Legends is a video game with an e-sports competition that attracted more than 360 million viewers worldwide last year.
Super bowl on the other hand, which is aired on the traditional platforms, got about 111.3 million viewers while the NBA finals got just 30 million viewers.
Who would have imagined that more people will want to watch a video game competition than the real thing, which has dominated the numbers for years?
Straight line assumptions are fuelled by success. When companies do their SWOT analysis, they never identify their success as a threat but in reality the greatest threat to the success of a successful company is its own success.
This happens when the leadership sees success as a destination and not as a point on the road to another destination.
I call them fixed-destination thinkers. No one who sees success as a fixed destination can become a disruptor. Fixed destination thinkers want to do everything they can to consolidate their success and this is a catalyst for straight line thinking.
Under the leadership of Andy Grove, Intel became the world’s number one maker of computer chips. He authored a book whose title gives great insight into the inner workings of his mind. The book is titled, Only the Paranoid Survive. My son and I were discussing this and our conversation centred on the virtues of paranoia.
The truth is that if you do not have a sense of paranoia concerning your continued relevance then you will subscribe to straight-line assumptions and relish your success. Once this happens, the end is in sight.
It was the straight line assumption and the lack of a healthy paranoia that sank the Titanic. Corporate Titanics are still sinking today for exactly the same reason. The wise learn from the mistakes of others but fools insist on making their own mistakes.
When an organisation is led by contented leadership who are not hungry and who lack paranoia, then watch out. The iceberg that will sink their Titanic is already in place. It’s just a matter of time.
Wale Akinyemi is the chief transformation officer at PowerTalks