A word to the wise: Avoid being ‘leapfrogged’

Brett Adler

Remember the days when you had to drive to the library and manually search through Encyclopaedia Britannica’s set of A-Z books to find information? Today you type a term into your phone and instantly receive the answers you need from Google and Wikipedia.

How about the days when you took photos on Kodak or Fuji film and then had to wait a week until the photos were developed before you could see them? Today you snap a photo on your phone or digital camera and instantly share it with the world on Facebook and Flickr.

And it wasn’t long ago that you had to drive to Blockbuster or Hollywood Video to rent a movie. Now you can download movies and TV shows from Netflix and Hulu without leaving your house.

How did these market leaders get replaced by small upstarts?

They were “leapfrogged.”

Leapfrogged? They got beaten by the children’s game? No, not the game. Leapfrogging is the name of a concept that explains why many of today’s market leaders fail to be tomorrow’s leaders.

According to Wikipedia’s entry on leapfrogging, “companies holding monopolies based on incumbent technologies … eventually lose their technological leadership role when new radical technological innovations are adopted by new firms which are ready to take the risks. When the radical innovations eventually become the new technological paradigm, the newcomer companies leapfrog ahead of former leading firms.” (Not surprisingly, Britannica.com does not have a definition for the term “leapfrogging.”)

Blockbuster, once the king of the movie rental business, recently filed for bankruptcy. Blockbuster clung to its store-based distribution model while newcomers Netflix and Red Box leapfrogged them by redefining the way customers rent movies. Blockbuster is trying to follow suit but has been unable to regain the share of the market they once dominated.

So how do you avoid being leapfrogged? Here are a few tips:

Identify and fix your weaknesses – Take a hard look at the weaknesses in your current products and solve them before someone else does. Blockbuster should have identified the inefficiencies in the store-based distribution model and pioneered delivering videos by mail, kiosks and online long before its competitors.

Stay at the forefront of your industry – Spend the time and money to determine the advancements your competition could use to leapfrog you and beat them to it. Blockbuster eventually built other delivery systems, but they were too late. Blockbuster is no longer the first place you think of to rent a movie. If you wait for other companies to determine the next step in the evolution of your market, you’ll risk being leapfrogged.

Change your business model if needed – Be willing to cannibalize your current business, or even shut it down, to shift to the next step. It will hurt in the short-term, but it should work out in the long-term. Blockbuster retained the store model for too long. The company should have closed its stores much quicker than it did and converted its customers before it lost them.

Involve the next generation – Make sure to involve young consumers in the process of identifying the next step in your industry. Younger people tend to be early adopters because they have less brand loyalty, a stronger desire for the latest products and are not as set in their ways. They often see the next steps in an industry long before senior management.

The leaders of today’s markets should be looking for and embracing the technologies of tomorrow. That doesn’t mean you have to drop your existing business. But if you focus all your resources on your current products, you’ll be leapfrogged too.

This column was written by Brett Adler, chair of Boise Young Professionals and founder of Boise Rec Fest (www.BoiseRecFest.com). He provides consulting services regarding technology, marketing and public relations. He can be reached at Brett@BoiseRecFest.com or (208) 639-0281.

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