Friday, July 26, 2013

Are You Protecting the Old Way of Doing Things?


I recently read the book How Will You Measure Your Life? by Clayton Christensen, a professor at Harvard Business School. The book is a good read with practical advice for making decisions that keep you moving toward who you want to be and where you want your organization/career to go.

The takeaway nugget for me was a point he made about the dangers of marginal thinking in business decision-making.

It's hard to ignore what you've already invested in
Marginal thinking focuses on the additional cost or benefit of a possible decision rather than looking at the big picture that might need to be reinvented entirely.

In the late 1990s, Blockbuster dominated the home movie rental industry in the US. From a business standpoint, to maximize revenues, They needed movie renters to watch the movies and get them back to the store to increase turn. Late fees were charged, escalating every day to encourage customers to return videos on time. Analysts estimated that perhaps 70 percent of Blockbuster's profits were from those late fees.

But imagining a clean slate can help prevent losing it all
In comes Netflix, a newcomer who addressed those annoying fees