Why We’re Better Off Assuming People Are Competent And Hardworking
Go to just about any business conference these days and you’re likely to see some pundit on stage telling a story about a company — often Blockbuster, Kodak or Xerox — that got blindsided by nascent trends. Apparently, the leaders who rose to the top of the corporate ladder were so foolish they just weren’t paying attention.
These stories are good for a laugh, but they usually aren’t true. People who lead successful companies are, for the most part, competent, hardworking and ambitious. That’s how they got their jobs in the first place. There are, of course, exceptions. People who have a talent for self-promotion can get to the top too.
Still it’s much better to assume competence. That’s how we learn. The truth is that we all get disrupted sooner or later. It doesn’t only happen to silly people. Every square-peg business eventually meets its round-hole world. Smart, competent people fail all the time and, if we want to have a chance at avoiding their fate, we need to understand how that happens.
During Apple’s rise, Microsoft was considered to be big, slow and incompetent. Its CEO, Steve Ballmer, had foolishly dismissed the iPhone and the company never seemed to gain traction in the mobile world. It launched weak products, such as the Zune music player and the Windows phone. Its failed acquisition of Nokia just seemed to add insult to injury.
Yet still even accounting for Ballmer’s mobile missteps, Microsoft’s business continued to perform well, growing its revenues at double digit rates and maintaining high margins. How can that be? Most of Microsoft’s revenues don’t come from the consumer categories that business journalists tend to cover, but in selling B2B products and services to CIOs. While everyone was focused on gadgets, it was building a monster business in the cloud.
When you look more closely, the clever pundits often miss the real story. Blockbuster didn’t ignore Netflix, but executed a viable strategy and still failed. Kodak didn’t ignore the market for digital cameras, in fact its EasyShare line were top sellers. Unfortunately, selling digital cameras couldn’t replace the profits from developing film. Yes, Xerox PARC failed to successfully…