Successful Companies Don’t Adapt, They Prepare

Successful Companies Don’t Adapt, They Prepare

By: Greg Satell

In 1960, Harvard professor Theodore Levitt published a landmark paper in Harvard Business Review that urged executives to adapt by asking themselves, “What business are we really in?” He offered the both the railroad companies and Hollywood studios as examples of industries that failed to adapt because they defined their business incorrectly.

Yet today, the railroads don’t seem to be doing too badly. Union Pacific, the leading railroad company has a market capitalization of over $80 billion, about 60% more than Ford or GM. Disney, the leading movie studio company, has a market capitalization of about $150 billion. That doesn’t seem too shabby either.

While nimble startups chasing the next trend are exciting, the truth is that companies rarely succeed by adapting to market events. Rather, successful firms prevail by shaping the future. That can’t be done through agility alone, but takes years of preparation to achieve. The truth is that once you find yourself in a position where you need to adapt, it’s usually too late.

 

Read full story: https://hbr.org/2016/10/successful-companies-dont-adapt-they-prepare

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