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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