As technology rapidly advances, companies are striving to make the appropriate transformations. But, as the recent situation at Disney illustrates, it is important to pay attention to corporate strengths when adopting new technologies.
Of course, companies don’t want to be left behind when there is a major shift in technology. But, rather than vigorously pursuing every trendy new technology, companies must assess how the technology fits into their strategy, and pursue it accordingly. Companies must take care so that emphasis upon the new technology does not weaken the very strengths that drive the success of the business.
Disney’s experience with streaming illustrates this point. Streaming is a relatively new technology that is impacting the movie business. As a key player in that business, Disney had to decide how it would pursue streaming. Disney chose to invest heavily in its own streaming service and has been losing a great deal of money on that endeavor.
Granted, many new ventures lose money for a while, and it is beyond the scope of this blog post to say whether Disney should be pursuing its own streaming service. But, what Disney definitely should have done is recognize that the strengths required to succeed in the streaming business are quite different from the strengths that have been driving Disney’s previous success.
Generally, when a company pursues a new area too far afield from its strengths, success is extremely difficult. For the most part, pursuing such areas is not advisable. Occasionally, there may be times when a company chooses to invest in a non-strength area, and ultimately is able to succeed. If a company chooses to do so, however, it must be careful not to let an excess emphasis on the new area overwhelm the strengths that typically drive the success of the business.
Letting the non-strength areas overwhelm the business appears to have affected Disney. Disney has strengths in areas related to creativity. There was a November 28, 2022 article on att.net titled “Bob Iger Sets Creativity as Number One Priority for Disney.” As Disney’s CEO, he is apparently doing so because creativity is a corporate strength that drives Disney’s success. The article quoted Iger saying “Every transaction that occurs at this company emanates from some form of creativity, and therefore it is my number one priority. It is the focus.”
As I see it, based on more than 25 years researching how businesses succeed in new areas, this priority for creativity is a step in the right direction for Disney. It puts the emphasis on what drives Disney’s success, not on trying to have the biggest expansion of a new technology.
The lesson to be learned from Disney’s experience is that even when technology is changing, it is important not to lose sight of corporate strengths. Adopt new technologies to support those strengths. Above all, don’t throw away your strengths by putting the emphasis upon developing new technologies in ways that don’t fit your business.
