The Wrecking Ball
Recently while walking through downtown as I looked around at all the modification taking place, it validated my thinking of how nothing remains as it was once intended. The marvelous of technology consistently change our intentions and speed up the tenure of relevancy. Eventually, we need to bring in the wrecking ball and deconstruct the past to construct the future. Many will hope for more time, some will be victims of time, while a few others will continue being ahead in time.
Sears is a great example of holding on to the past betting time can save them. Sears is a victim of their obsolescence caused by their lack of imagination. They continue to hold on to yesterday as they watch all of their resources disappear. They’ve allowed their assets to fade away. Instead, when they were plentiful, they should have used them to de-construct their irrelevancy and construct their new relevance. Their stubbornness to modify is forcing them to liquidate assets to pay their bills; bills customers used to pay for them. Sears lost control of their de-construction, and along with that, they had no relevant architecture to construct something new.
Like the taxi industry, Sears did not listen to the marketplace they instead listened to their delusions of recreating yesterday’s glory. They can not see through their current stubbornness to what they could have been, and now their demise is probable. One would have to ask. If Richard Sears were alive today would Amazon be called Sears? Some will blame the retail apocalypse for destroying Sears. The truth is, It’s a lack of imagination and their stubbornness in maintaining a yesterday’s marketplace as their customers shop in tomorrows.
Watching the reactions to market disruptions is interesting. Those who can disrupt themselves have more control they understand when to bring in the wrecking ball destruct their obsolescence and construct their new relevance. However too many industries experiencing disruptions are reacting like, Sears they hold on to the past watching their assets deplete. Then there are others who are obsessed with buying more market share of what the market already determined it doesn’t want or doesn't need as much as it used to.
"When a marketplace concludes where the line of growth ends. Nothing can raise that growth line whether based on good intentions, large investments or buying market share through acquisitions; nothing can move the line of growth above were the marketplace decided to draw it."
All the growth in a declining market is only temporarily borrowed or obtained from those exiting. Only through innovative construction in a declining market is there a path to new revenues and profits. If the acquisitions bring diversification, the strategy makes sense. As an example, why did Sears buy Kmart instead of a software company or logistics company? Why are taxi companies buying other taxi companies? Should they instead be investing in driverless technology or something else their imagination could show them? Regardless of the industry buying more of the same makes sense in a growth market, and buying diversification makes sense when your core deliverable’s market is in decline. When more of your revenue growth is coming from acquisitions rather than customers, it’s time to change who you acquire. Buying customers is easy keeping customers takes relevance, and relevance is the ability to listen to and react to what the marketplace is telling you. The desperation to grow revenue can overtake the discipline to grow profit; especially in declining markets.
We have all heard the saying; “The worst time to go shopping is when you're hungry. You always buy too much, and most of it goes bad before you eat it.” That is also good acquisition advice.
Amazon’s acquisition strategy will influence the future innovators and cause current leaders to re-think their philosophy of investing in more of the same. Jeff Bezos has taken diversification to a whole new level. Bezos does not invest in something because he’s comfortable with its deliverable, he invests in what the market wants and then gets comfortable delivering it. He listens to the market not the emotional baggage of comfortableness. As this new innovative world continues shorting the life of relevancy. Many leaders will face the decision to call in the wrecking ball to deconstruct their past and construct their future.
“Business Complacency is the enemy of what could be. It will embed itself in the insecure first as it attempts to confine status quo.”
R.J. Stasieczko
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Ray Stasieczko
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