Adaptation is Key
By Kari Hebrank , Executive Vice President
As a business and literature major in college ( Go ‘ Noles !) I am forever fascinated by what makes some companies soar to success while others chug along . I am even more intrigued by companies that reached their pinnacle of success only to topple to the bottom of the pile a few years later . I recently read an article about one such company , Blockbuster , the video rental company established in the mid-80 ’ s , and the comparison to Netflix , the now ubiquitous video streaming platform . What intrigued me most about the article was that there are business lessons we all can learn from the pitfalls that plagued Blockbuster , which had amassed 2800 locations around the world from 1985-1992 and ultimately had 9000 stores before closing all but one store in Bend , Oregon , but allowed Netflix to dominate the industry in a very short time .
First , there is no disputing Blockbuster dominated the video rental industry , but they lost sight of what they were selling — affordable entertainment . They were more focused on brick- and -mortar stores than finding a better way of providing entertainment to their consumers . Many of you reading this article probably have fond memories of Friday nights grabbing a pizza and choosing a movie from your local Blockbuster store to take home and watch as a family , as do I . Blockbuster focused on their brick-and-mortar model , something they were comfortable with , rather than focusing on getting entertainment into their customers ’ homes . This stagnation kept Blockbuster from exploring new technologies to better sell their product . Conversely , Netflix went from a mail-order DVDs venture to a streaming service , embracing new technology to get the entertainment into people ’ s homes .
Second , Blockbuster wasn ’ t initially willing to adapt or embrace change , and when they eventually realized the industry was changing , it was too late . Netflix adapted to change , recognized people ’ s ( customers ) preferences were evolving towards streaming , technology was improving and they were willing to adapt to meet those changing needs and subsequently were able to grow .
Lastly , Blockbuster ’ s heavy reliance on late fees for revenue demonstrated they weren ’ t willing to put the customer first . Meanwhile , Netflix didn ’ t charge late fees and you could keep their movies as long as you wanted . The Netflix movie-rental experience was more enjoyable for their customers , thus driving sales .
Change is inevitable , even in the underground utility industry . We need to never lose track of who our customers are , be ready to adapt and embrace new technology when appropriate and always , put the customer first .
APRIL 2022 • DITCHMEN 7