"It is not the strongest of the species that survives, nor the most intelligent, but rather the one most adaptable to change."
Although Darwin's quote described how organisms within a species evolve, it applies just as well – maybe even better - to the world of business.
New corporate entities exist in a competitive environment where -- if they can first clear the barriers to entry -- they either compete in a market rife with substitutes or seek to persuade buyers that their innovative new products are worth a look. Not an easy task.
But being the strongest or the biggest doesn’t guarantee survival. Business history is full of examples of companies who were at the top of their industry at one point, but failed to adapt –
Take Nokia. It was wildly successful for a spell, and then failed to anticipate the rise of the smartphone. As a result, it lost almost a billion dollars and its market share slipped.
Blockbuster is another. For years, it was the only game in town. But it didn’t adapt to the broadband age, and certainly didn’t understand how Netflix would alter its competitive landscape. The former can be attributed to a fear of cannibalizing; the latter to hubris or complacency (or ignorance?). The end result, in any case, is a company teetering on the brink.
Toyota is an interesting current example. While it was at the peak of the automotive industry, the sticky gas and brake pedals have now toppled it from that perch. It will be interesting to watch how Toyota navigates through its current maelstrom and whether it adapts to its new reality.
The motto for all CEOs – it’s not how smart you are, but how fast you adapt that makes your business successful. And how fast you adapt depends on understanding your market, staying in touch with customer needs, assessing your competitors, and innovating constantly.