James Allen, co-leader of Bain Consulting's global strategy practice, has written a good article for the Wall Street Journal about how firms can avoid the fate of once-proud industry leaders such as Sears, Blockbuster, Circuit City, Research in Motion, and many others. Allen starts by referring to a personal development exercise that many individuals have been asked to conduct at some point in their careers: writing your own obituary. The exercise is meant to clarify your priorities and objectives, and help you rediscover your true purpose and passion. Allen argues that firms might take a similar approach. Executives might try to write their company's obituary. Here is an excerpt from his article:
The same exercise can help CEOs determine what their organizations need to live a productive life, and what could lead to an untimely death. CEOs should imagine they are business journalists, writing a postmortem on how the company began a slide toward oblivion—how it lost its leadership position, was targeted by an activist investor or acquired by a company with a more successful business model. What were the likely causes? Which factors in the downfall were knowable but not seen or addressed by executives? Which former strengths became fatal weaknesses? What could senior leaders have done differently to position the company for success? These theoretical obituaries would vary greatly in detail, but I suspect they will include a common thread: The natural life cycle of many companies goes from insurgency to incumbency to struggling bureaucracy to replacement by the next wave of insurgents.