The five-column headline was Stent Pioneer J&J to Exit Business (Wall Street Journal, 6/16/2011). You may be thinking, “So what, who cares?” Well, the 1000 people who work at the two plants that will close care. Further, you should care because it is a great example of the overnight POOF! that can happen to any business or ministry.
The J&J stent story began in 1994, less than 20 years ago, when Johnson & Johnson first entered and dominated the emerging coronary stent market. By 2006, the market had grown to more than $6B. J&J, with $2.6B in sales, owned more than 40% of the market. Then in less than five years (in 2010), J&J’s sales were down 75% to $627M and their market share had deteriorated to only 14%.
My point in this post is not to criticize or second guess J&J’s decision, or to analyze what happened. J&J has been around since 1886, yes…1886; they know what they are doing. J&J is a respected and successful company, one of the Built To Last companies in the now-classic Jim Collins/Jerry Porras book. No doubt, exiting the stent market was the correct decision for J&J. The key point here is not what happened, but how fast it happened.
POOF!…in less than five years…just like that…almost overnight…a major business segment goes from a 40+% market share to being shut down. Do things really change that fast? Yes! Competitors arise; technology advances; new products emerge and existing products and services decline; customer preferences change and so do congregation preferences. The iPad and Androids are taking out the once dominant Blackberry (yes, it’s happening), Netflix took out Blockbuster, and Oldsmobile/Pontiac/Saturn disappeared, all these in less than five years. Can it happen to your organization? Yes.
As a leader, you have two major responsibilities: deliver results in 2011 and get ready for 2015. Ignore either one at your own peril. I don’t know what you will need to do to be successful in 2015, but I know this for sure, it will be different than today. Start getting ready now so I won’t be reading your POOF! story in the WSJ.
Need another example to convince you? Author and historian Daniel J. Boorstin once said, “A wonderful thing about a book, in contrast to a computer screen, is that you can take it to bed with you.” Hmmm, I have a computer screen I take to bed with me. It’s called a Kindle. By the way, the Kindle didn’t exist five years ago.
© Copyright 2011 by Dick Wells, The Hard Lessons Company
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The Netflix/Blockbuster comparison really resonated, mainly because that was all about technology and its impact on distribution. Blockbuster should have seen it coming and invented the Netflix model. Now Netflix is looking over its shoulder at Redbox…but at least Netflix is attempting to make most (and eventually) all of their rentals available by instant streaming. That’s one highly competitive industry that is changing at light speed. The spoils will go to the winner.