Seeking a Cure
for Founder’s
Dilemma
Once, Kodak ruled the field of photography. Around the
globe, the company name was almost synonymous with
“camera,” and Kodak film was universally in demand. But
when digital cameras hit the market, Kodak was sudden-ly
caught short; the company vision was so narrowly focused on a
disappearing technology that it was abruptly left behind.
Kodak is not alone; many seemingly indestructible businesses
have evaporated due to a failure to adapt and change, a phenome-non
sometimes referred to as “founder’s dilemma” because it tends to
happen when a business holds on too tightly or too long to its orig-inal
defining vision.
“If you think of companies that have died over the last decade,
what’s often happening is they are being displaced by people they
didn’t even think were competitors as these companies were ris-ing,”
said Marc Epstein, co-author of the book, The Innovation
Paradox: Why Good Businesses Kill Breakthroughs and How
They Can Change.
He names numerous businesses that have succumbed to the
rise of Amazon, Apple or Netflix, like Borders bookstores and the
Blockbuster video rental chain.
“Nokia and Blackberry were the dominant companies, and they
were displaced because they missed this whole smartphone thing,”
said Epstein. “Borders missed it because they saw Amazon as a
small competitor. Barnes and Noble said, ‘People aren’t going to
want to buy books by mail.’”
innovation
AVOIDING FOUNDER’S DILEMMA
Becoming too invested in a narrow company definition can be a
blinder to future, necessary innovation.
“Basically, it’s a company that’s trapped in a paradigm or a def-inition
of what it is,” said Ian Chamandy, who founded Blueprint
Business Architecture with partner Ken Aber. “These compa-nies
have a definition of who they are, and they don’t know any
other way or they can’t see any other option or opportunity.”
If Blockbuster had understood its core activity as providing
access to entertainment rather than renting out videos, he says,
they might have “bought Netflix for $10 million when it was a
start-up.”
Chamandy and Aber help businesses to better define them-selves,
so “when opportunities come up in the future, they
will see these opportunities as lying in their wheelhouse,” said
Chamandy. “If you’re the HR director, at the end of the day
you’ve got to get the CEO to agree to do this, because defining
the company is the CEO’s job.”
He describes an actuarial firm that had specialized in the dis-appearing
field of defined-benefit pensions. Chamandy and Aber
told them, “You need to be able to articulate your DNA in sev-en
words or less, and when you do that, that will tell you what to
do in the future.”
Instead of limiting the definition to defined-benefit pen-sions,
Chamandy advised them to see their primary function as
By Sarah B. Hood
CAN HR REROUTE A COMPANY
THAT’S HEADING DOWN
THE WRONG PATH?
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HRPATODAY.CA ❚ OCTOBER 2014 ❚ 39