Adapt or You’re Cooked

Posted 09.08.2008

When I’m speaking to groups of rising leaders (as I am today) on Tools for Next Level Leaders, I regularly cite a New York Times article on Steve Ballmer, the CEO of Microsoft, that ran last year.  Here’s the money quote:

One of the evolutionary laws of business is that success breeds failure; the tactics and habits of earlier triumphs so often leave companies — even the biggest, most profitable and most admired companies — unable to adapt.

Zagat yelp As it happens, yesterday’s Times offered what is likely to be a prophetic example of this phenomenon.  If you’re a foodie like me (or even if you’re not), you’ve likely used the Zagat’s guide to restaurants.  The reigning champ of restaurant reviews for 30 years, Zagat has evolved from photo copied sheets to the familiar little red books to the web.  But, not so fast my friend.  There’s a new epicurean contender on the web, Yelp.  As the Times article points out, Yelp is attracting lots of new fans because it covers more restaurants in more cities, allows for all diners to submit their comments and it’s free.

What’s the response of Zagat co-founder, Nina Zagat?  Here’s what the reporter Randall Stross writes:

When I told her that I, a Zagat subscriber, wished that the service did try to rate every restaurant, she pointed to the company’s 30-year history and said, “The proof is in the pudding.”

Uh-oh.  There’s no need to recount here all of the dead companies who were so proud of their business model that they couldn’t see the future when it was already turning the heat on the burner up to a full boil.  I hope we don’t have to add Zagat to the list.

P.S.  Check out the two sites.  What’s your favorite?  Zagat or Yelp?