Antiocoâs initiatives, however, were going to cost the firm serious money, and also depress short-term profitability, as is often the case when a business needs to go through a strategic inflection point. Carl Icahn, an activist investor, entered the fray, putting members of his own preference on the board and eventually easing Antioco out. Under his successor, Jim Keyes, Antiocoâs changes were reversed, and Blockbuster stubbornly tried to hold off the inflection point. The company went bankrupt in 2010.
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His two brokerages required a lot of work because, having never documented the processes involved in running them, he ended up just doing most of the work himself. Then, in 2005, he had a catastrophic snowboarding accident that left him unable to work for several months. He used his convalescence as an opportunity to sell both brokerages, but since neither of the new owners knew what was involved in running them (and Brianâs lack of documentation certainly didnât help), they both went under soon after.
What happened, however, is that we did neither. We saw two forces emerging in the industry that allowed us to chart a very different course. At the time, it was fraught with risk. But perhaps because the other alternatives were so unpalatable, we decided to stake the companyâs future on a totally different view of the industry.
Henry Schacht also knows the important of putting on a game face in a crisis. When the former CEO and chairman of Lucent returned in October 2000 after the forced departure of CEO Richard McGinn, the technology bust had vaporized many of its customers and slashed the spending budgets of the one that remained. The financial analysts that Schacht had completed showed that Lucent could well run out of money in ninety days. Schachtâs crisis communication plan and the way he communicated with his largest customers helped save the company.
Disruptive technologies, Christensen had observed, often grew out of hobbyist communities. They were developed using âbootlegged resourcesâ in which âoff-the-shelf componentsâ were redeployed for something other than their intended purpose. They started out wonky but rapidly improved along attributes of performance that established players ignored.
But even once you had absorbed this lesson, it wasnât easy to implement. Pursuing niche markets cost profits, making investors question your sanity. This, too, Christensen had foretold: âOne of the reasons managers at established firms find it difficult to serve emerging markets is that their investors and customers tell them not to.â
That was the real secret of The Innovatorâs Dilemma, which readers often missed. It was not a book about how to succeed; it was a book about how not to fail. Christensenâs book wasnât a how-to for start-ups but a counterinsurgency manual for senior managers at stagnating firms. Thirteen years in, Huang felt that Nvidia was at risk of becoming such a firm, and it was as much paranoia as optimism that led him to pursue the mad-science market.
A new management team and its advisers devised an all too common 1990s business strategy: to sell off boring bits to fund exciting acquisitions. But, like other companies, ICI found it easier to overpay for new businesses than to make rewarding disposals of old ones. Burdened with debt and finding growth elusive, the stock price was only a fraction of what it had been a decade earlier. What remained of Britainâs leading industrial company of the twentieth century was acquired in 2007 by the Dutch company AkzoNobel. Blair resigned the premiership in the same year.