In late September, Blockbuster Video, with a billion dollars in debts it can’t pay, filed for bankruptcy. What a great case study in how an organization can go from king of the mountain to yesterday’s news. It doesn’t take long these days.
When my family moved to the Washington, D.C., area in 1999, the neighborhood Blockbuster store was a regular destination for the four of us on Friday nights. Blockbuster was fun, but the late fees drove us crazy. We could never get the movies back on time, and I regularly ended up spending 20 to 25 bucks in fees the next time we rented a movie.
When Netflix came along with its monthly fee and keep-the-movie-as-long-as-you-want approach, we were happy to sign up for $9 a month because we were coming out ahead on the deal. Netflix is what prompted us to drop the VHS format and flip over to DVDs. In the past four months, I’ve started streaming Netflix movies on my iPad.
All of that in the space of 11 years. Wow. Back in 2000, Blockbuster had the opportunity to buy Netflix for $50 million. It passed. Probably a good thing for all of us movie buffs that it did.
So what could Blockbuster have done to survive? The same thing that any organization that wants to survive and win needs to do these days—ask tough questions. If you’re the leader, you have to ask them, encourage them and motivate people to act on the answers.
There are a lot of good questions you can ask. Some of the questions that would have helped Blockbuster (and might help other organizations) include:
- What do our customers hate about us?
- What do they love about us?
- What do we do if they start loving things we don’t offer?
- Where is the technology taking our business?
- How can we do things faster? Easier?
- If we had to cut our costs by 50% and raise customer satisfaction by 50% at the same time, how would we do it?
There are lots of questions you can ask to keep your organization from going literally or figuratively bankrupt. Think about those questions and any others you’d add to the list.