Remember Blockbuster Video? The darlings of Wall Street in 2000… bankrupt in 2010.
Or how about Blackberry? Still have one? Probably not, and if you do—welcome to Jurassic Park!
Remember the book Good to Great and how Circuit City was highlighted as one of the great companies? They were also highlighted in a later book by Jim Collins entitled How the Mighty Fail.
So, what is my point?
All three companies failed for the same basic reason. Oh, you will read articles saying things like:
Blockbuster failed because they wanted to hold onto their late fees
Blackberry failed because they wanted to preserve their proprietary operating system
Circuit City failed because it stopped paying commissions to its sales force and fired 3,400 of their most experienced people
Unfortunately, these are just the symptoms. It is important we get to the root cause of failure. Sadly, these failures all had the same root cause...
They all lost the voice of the customer—the only voice that matters.
All three companies failed because they forgot what business they were in.
Blockbuster thought they were in the video business.
Blackberry thought they were in the mobile device business.
Circuit City thought they were in electronics business.