Anticipate Crisis Triggers and Thrive When Others Fail (Part One)

The ONLY constant in life is change. That has always been true, but the pace of change in the business world is accelerating exponentially. If you are an entrepreneur or executive, you might feel like you are stuck on a treadmill that is moving faster every day.

Emerging and growing economies across the world, along with rapid improvements in technology, are changing our world. Major industry disruptions used to be relatively rare but are now both frequent and powerful.

Those powerful forces don’t care if you are a small business just getting started or a multi-million dollar company that has been around for decades. If you don’t adapt, you won’t survive.

You only have to look at the example of a company like Nokia. They were the first to create a mobile network and led the globe in mobile phones in the early 2000s. However, they failed to anticipate the impact of smartphones, fell behind in the race to innovate and eventually became nothing but an afterthought in the cell phone market.

You have a choice. You can be the disruptor, or you can be the disrupted.

The ultimate competitive advantage is anticipation.

Every problem is an opportunity for an entrepreneur or business leader. The bigger the problem, the bigger the opportunity, but you have to shift your psychology to anticipate those challenges.

So, how do you foresee challenges before they hit you? By understanding that there are warning signs, or triggers, of crisis. Tony Robbins calls these the eight triggers of crisis because they’re simply the most common patterns that leaders frequently fail to anticipate. We’ll look at four in this article and four in the next article.

The crises we’re referring to have the power to upend entire industries, sometimes overnight. But when you are prepared for them, they offer you an exponential opportunity to adapt, innovate and come out stronger than before.

1. Change in Competition

The first trigger might seem obvious, but it certainly should not be ignored. A change in competition that you aren’t prepared for can crush your company.

In 2000, Blockbuster had the chance to buy Netflix for only $50 million. Netflix was a small company, while Blockbuster was the undisputed leader of the movie rental industry, with over $4 billion in profits each year. Blockbuster didn’t appreciate the value this new competitor offered customers, and they passed on the chance to provide streaming services.

Blockbuster should have realized that it was not just in the movie rental business, but it was really in the business of providing entertainment for people who wanted to watch outside of the theater. While Netflix may have started small, it grew rapidly, and 10 years later, Blockbuster filed for bankruptcy.

Whether you are a small business or an industry titan, competition will create a crisis. Don’t overlook emerging competitors; always focus on the value you (and your competitors) are offering your customers.

2. Change in Technology

The question is not if changes in technology will impact your business but when changes in tech will affect you.

You can’t just protect your business from technological changes; you must find ways to use tech to innovate, fulfill needs and add value. This will allow you to be the disruptor, not the disrupted.

Kodak used to be THE name in photography. However, way back in 1975, they failed to appreciate the impact of the digital camera. They refused to innovate, and by the time they tried to enter the digital market, it was too late. Kodak filed for bankruptcy in 2012.

Technology is advancing far faster than in the ‘70s. You have to be willing to play tech, or tech will play you.

Incorporating technology in a way that is simply flashy or trendy isn't enough. Use technology to meet your customers' needs or to add more value to their experience.

3. Change in Culture

Cultural shifts can create a crisis as easily as changes in technology.

America’s movie industry used to be the center of popular culture. Yet, over the past two decades, the number of tickets sold to movie theaters has been declining consistently. Attention spans are dropping, and there is a cultural shift toward short, easily shared videos.

Companies like Facebook, Instagram and TikTok have embraced those cultural changes and profited massively. The entertainment industry is still attempting to adapt.

Effective business leaders not only anticipate and adapt to cultural shifts and trends, but they also find ways to leverage them and create raving fan cultures for their companies.

4. Change in the Economy

Economies cycle through periods of growth and decline. We’re never surprised at the first snowfall—we know winter is coming. Likewise, companies can expect that an economic winter is on the horizon. The question is whether you will be prepared to adapt when faced with challenging economic conditions.

An economic crisis can create breakthroughs. It requires companies to stop thinking about what they could or should do and instead focus on the massive action they can take to meet their customers’ needs. Remember, you never want to love a product more than the people you serve.

Airbnb, Slack and Starbucks all invented and reinvented themselves in the midst of economic recessions. They found ways not just to survive but thrive.

Next Up…

Only 35% of businesses can survive beyond 10 years . Only 25% make it to 15 years. Even established companies can fail. If you own a business, you will face one of these crises at some point. Whether or not your company survives and thrives will depend on your ability to anticipate and adapt.

In our next blog, we will cover the remaining triggers of crises. The more you know, the better prepared you will be.