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By Wayne Rivers, Family Business Institute
Super Bowl 55 is done, and 43-year-old Tom Brady is in the record books. He played in his first Super Bowl in 2002, and you'd be amazed at some of the businesses that advertised during the big game that year: AOL, Blockbuster, Circuit City, Sears, Gateway Computers, Voice Stream Wireless, Radio Shack, and Yahoo. Blockbuster, for example, was a huge business! They had over 9000 stores and 84,000 employees; now they have one store! Circuit City was prominently featured in Jim Collins’ book Built to Last. It didn’t. They declared bankruptcy in 2008 and shut their doors for good in 2009. Sears once had stores in every town, large and small, in America; they are now down to just 60 stores.
Jon Miltimore of the Foundation for Economic Education wrote an article about Brady and the Super Bowl advertisers of 2002 that illustrates a terrific point: It's really, really difficult to stay on top! Those nine companies were on top in 2002. In 19 short years, they are either gone altogether or shells of their former selves.
What does it take to keep your construction company on top? How can you make it sustainable over time? Joseph Schumpeter was an economist who coined the term creative destruction. It describes what happens in the marketplace when some competitors out-innovate and outcompete others. It's exactly what happened to Blockbuster. One particular Blockbuster customer grew to absolutely abhor the late fees which were a big part of their business model. In response, he started Netflix and, over time, out- innovated and outcompeted Blockbuster. The results are clear.
Creative destruction is good for the consumer marketplace; hungry businesspeople outcompete others who don't or won't innovate and change. But what about our individual businesses? We don't want to be outcompeted or out-innovated! The following are six questions for keeping your company relevant and competitive over long periods of time.
Miltimore ended his article saying, “Everything has a shelf life, including Tom Brady.” It may feel somewhat mercenary to look at your business that way, but all your companies, like Brady himself, have shelf lives. How can you innovate and change now so you extend the shelf life of your business and make it more sustainable?