Take a look at how this corporate titan fell short in terms of innovation…

Tuesday: Return Driven Strategy FROM THE DESK OF MILES EVERSON: Welcome to this week's edition of "Return Driven Strategy (RDS)!" As someone with over 30 years of experience in the business and consulting industries, I've found RDS to be a game-changer in managing my team. For those of you who aren’t familiar, RDS is a pyramid-shaped framework composed of 11 tenets and 3 foundations that enable businesses to achieve high levels of performance. That's why every Tuesday, we publish articles about RDS to empower leaders and managers in today's ever-changing business landscape. Today, let's delve deeper into the 8th tenet of RDS: Map and Redesign Processes. Read on to discover the importance of innovating and redesigning your business to fulfill the needs of the consumer. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

Take a look at how this corporate titan fell short in terms of innovation… Before the days of what we currently know as streaming services, movie rental businesses stood as the undisputed giant in the entertainment industry, defining the way people consumed movies. … and with its vast network of brick-and-mortar stores, Blockbuster became synonymous with Friday night movie rentals and the excitement of browsing through aisles filled with digital versatile disc (DVDs) and video home system (VHS) tapes. The iconic blue and yellow signage adorned shopping centers, creating a nostalgic symbol of a bygone era when the anticipation of a movie night involved physically visiting a rental store. The Rise and Fall of an Entertainment Industry Giant Founded in 1985 by David Cook, Blockbuster revolutionized video rental with large, well-organized stores and a wide movie selection. The franchise model, adopted for rapid expansion, provided franchisees with a proven business model and brand support. Exclusive agreements with movie studios gave Blockbuster an advantage over smaller competitors. However, as technology gradually evolved, the need for the once-market-giant began to diminish. In the late 1990s, DVDs began to replace VHS tapes, providing superior audio and video quality. Blockbuster adapted to this change by transitioning its rental inventory from VHS to DVDs, but at the same time, this marked the beginning of the industry's shift towards digital media. The emergence of online rental services, such as Netflix, posed a significant challenge to Blockbuster's traditional brick-and-mortar model. Netflix introduced a subscription-based, mail-order DVD rental service, eliminating the need for customers to visit physical stores. Blockbuster's delayed entry into the online streaming market proved to be a critical misstep. While Netflix was gaining momentum with its streaming service, Blockbuster struggled to catch up. The latter’s online efforts, such as the ill-fated partnership with Enron Broadband Services, were marred by mismanagement and technical challenges. The result? In 2010, Blockbuster filed for bankruptcy, burdened by debts and the inability to compete with digital streaming services. The closure of numerous Blockbuster stores marked the end of an era for the once-dominant video rental chain. If seen through the lens of managers and marketers, the company's legacy serves as a cautionary tale for businesses that fail to adapt to technological advancements and changing consumer behaviors. Blockbuster and Return Driven Strategy’s Tenet 8 In the book, “Driven,” Professor Joel Litman and Dr. Mark L. Frigo talk about the importance of knowing when to revamp a business framework to innovate and evolve with changes in the business landscape. They explain that business mapping encompasses key aspects such as exchanges with important customers and vendors. This then extends beyond immediate business processes to consider the broader context, including customers' customers and suppliers' suppliers. Understanding these interconnected relationships is crucial for effective planning and avoiding misguided directions among enterprises. A comprehensive awareness of a business's position within its community is emphasized for overall success. Let’s apply this to our topic for today… As detailed above, Blockbuster failed to keep up with changing consumer preferences. It was slow to adopt digital distribution and streaming, and instead stuck to its traditional model of physical rentals. This reluctance to evolve led to a decline in market share as competitors embraced the convenience of online streaming. That’s why Blockbuster's rise and fall represent a classic case of a market leader's inability to navigate the evolving landscape of the entertainment industry. The company's failure to innovate and embrace digital technologies ultimately led to its demise, while competitors like Netflix thrived in the digital era. The bottom line? Blockbuster's story serves as a valuable lesson for businesses in terms of the importance of adaptability and staying ahead of technological trends in an ever-changing market. After all, innovation demands adopting modern practices and embracing technology, as seen in the shift from traditional movie rentals to today's streaming services. As the world evolves and consumer preferences shift, the fate of companies hinges on the business’ ability to stay agile and embrace what’s to come. If you’re looking to gain a better understanding of Return Driven Strategy and Career Driven Strategy, we highly recommend checking out “Driven” by Professor Litman and Dr. Frigo. Click here to get your copy and learn how this framework can help you in your business strategies and ultimately, in ethically maximizing wealth for your firm. Hope you found this week’s insights interesting and helpful.     Think about your sales experiences as a customer. What are some of the things that disappoint or frustrate you whenever you’re trying to buy a new product? Learn more about the importance of Return Driven Strategy in the sales process and improving a brand in next week’s article!