Being on the Right Side of Arrogance and Preparation
There are many parallels found between business and sport. One of the most obvious is how ego & arrogance leads to David over Goliath tales. In other words, underestimating your competition. It's logical to think, why does this continue to happen when the history books are filled with these stories. From my perspective why this happens in sport vs business is different.
Elite athletes are trained to lie to themselves (in a productive way).
"I can do it."
"I can go faster."
"I can take more pain."
"We can win & perform now since we have won & performed before."
This internal positivity and self-talk manifest itself as mental toughness.
A phenomenal trait when the person & team who gives up last has a better chance of winning. In certain instances, this cycle can cause over-confidence and not being properly prepared to compete. Before you know it you are the USSR hockey team being defeated by USA, Tyson being knocked out by Buster Douglas, or the Appalachian State Mountaineers football team defeating Michigan in 2007.
Elite businesses & innovative organizations also lie to themselves.
"We're doing the right things."
"We understand who our competition is."
"We know what customers want."
"We know what information has value and what it means."
When any of those thoughts become overvalued turmoil is likely to follow.
One of the most famous examples would be the Blockbuster story. Their failure can be summarized by a few key moments which involved Netflix. First, Blockbuster neglected to meet with Netflix co-founder's Marc Randolph & Reed Hastings for 6 months. Second, once the Blockbuster team agreed to meet they gave 1 option 12 hours in the future that forced the cash-poor start-up to spend $20,000 to charter a private jet and get to the meeting on time. Third, when Reed Hastings said a Netflix purchase would cost $50 million, Blockbuster CEO, John Antioco did his best not to laugh and didn't bother making a counteroffer. Accounts 1 & 2 are blatant examples of arrogance & lack of empathy. Bad yes, but not necessarily a death blow.
Number three unfortunately... is. #3 reminds us of how emotions unchecked cloud our perspective. We will never know why Blockbuster ultimately took the meeting. Curiosity? Looking to steal an idea? Who knows? Whatever it was, it is clear that they were not as prepared as they should have been based solely on the fact that they did not counter the $50 Million. It's fair to say Netflix and Blockbuster had alternative views on the market. That being said, even if they were evangelical in their position, Blockbuster knew Netflix was coming to the table looking for a partnership, merger, or investment. Knowing that they should have had a number and reasons why. The non-negotiation closed the door on the relationship and forced Netflix to make them the enemy. If that door remained open some partnership could have been formed later and Blockbuster could still be around.
The best companies and athletes have the right amount of insecurity. Being able to lie productively while also preparing like everyone is working day and night to beat them.
You may never be have to pull off a miracle on ice or be faced with the daunting task of acquiring a potential multi-billion dollar company like Netflix, but in your business you're faced with decisions that require you to be prepared. Do you understand your market enough to make radical shifts to your business model when the tide is changing? Have you ever caught yourself underestimating new innovations that ended up becoming a staple in your industry? History has repeatedly shown that change is essential for growth and having the confidence to overpower your ego when it comes time to change is key. In automotive the winds are constantly shifting and in order to stay afloat you'll need to have enough confidence in your business to make changes when necessary. Are you ready?