4 Autopsies of Big Change Management Failures

outline of a dead man on the road with a sign that reads, "Resisted Change"

To perform and thrive, you have to be able to adapt to an ever changing environment. If you resist and defy change, your company is not long for this world. Here are a few examples from decades of change management consulting projects of now-defunct organizations that, in order to avoid disaster did not

  • foresee the necessity for change soon enough or
  • adapt in a way that made good business sense.

Autopsy #1 – Borders
Borders began as a standard bricks-and-mortar bookstore in Michigan in 1971 and grew to employ almost 20,000 workers before it ceased operations in 2011. The company failed on multiple fronts. Yes, the “old fashioned” bookstores all struggle to compete with online book sales but Borders had additional challenges they failed to meet. For one, instead of establishing their own online sales site, they partnered with Amazon, a formidable rival. And then, they continued to pour money into expanding their physical facilities. The third and final nail on the coffin was that they didn’t read their market right – a fatal change management mistake. Their customers would have used them for books from small publishers, not CD or DVDs and not books from large presses to the exclusion of small.

Autopsy #2 – Hummer
This outsized, rugged, status-symbol of a GM product failed to see the writing on the wall. They received early success because of the early American desire for big vehicles that could travel over any terrain in the world. But tastes change and, as they did, Hummer didn’t pay attention. Consumers no longer believed that big was good. They began to worry about the impact of gas guzzlers on the environment and the rising expense of fuel. Hummer lost its brand desirability because they did not change or adapt to the external environment.

Autopsy #3 – Blockbuster
This company was doing great as the leader in video rentals. Viacom purchased them for a whopping $8.4 billion in 1991. Then they seemed to lose their way. They began to charge stiff late fees and alienated their customers. And then Netflix began to erode Blockbuster clients with a “no late fee” policy.  Blockbuster wasn’t paying attention to what mattered to their customers…a devastating change management mistake to make with internal or external stakeholders.

Autopsy #4 – Kodak
A company that was founded in 1888, Kodak made multiple missteps over its century-long life. They were famously sued by Polaroid when Kodak’s version of an instant developing camera was deemed an illegal knock-off; they did not stay price competitive against low-cost mass distributors; they lost their film market in good part to Fuji; and they bought into the pharmaceutical industry with little idea of how the pharma business works. But many would say that Kodak failed because they didn’t foresee how quickly and completely digital cameras would take over the industry that depended on film sales. They were caught behind the times.

All different industries…all eventual failures. Do they have anything in common?

One could say that they were ineffective at managing change. They were caught unawares because they were overconfident or neglectful. They didn’t keep their eye on where their core business was heading. They didn’t pay attention to what consumers wanted. They were not agile enough.

Maybe not all of these disasters could have been averted. But had they been better at foreseeing and adapting to change, we might have enjoyed a Borders website for specialty books; or a smaller, more fuel-efficient version of the Hummer;  or a more user-friendly source for videos; or the kind of quality camera Kodak was famous for now in digital format.

What do you think?

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