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How Your Organization can avoid the "Boiling Frog"

July 13, 2015

 

Many organizations choose to hold on to the "Great Ideas" that worked decades ago.  When organizations fail to continuously evaluate the industry, they will begin to show signs of the "Boiling Frog." An example of great organizations that fell susceptible to this mentality was Blockbuster. Blockbuster is an organization that started its venture in 1985 by a programmer named David Cook.  Blockbusters situation could have been avoided if they were aware of their industry strengths, weaknesses, opportunities, and threats (SWOT).

 

Cook stated that "They let technology eat them up." It was clear for many years that Blockbuster's business model was unsustainable, and would eventually become a casualty of creative destruction.  Senior executives at the organization hinted that blockbuster could imitate the Netflix business model, and crush the organization at the upstart, an attempt that failed.  In addition, through the years, multiple managers squandered money on schemes promising to revitalize the outmoded retail business.  Blockbusters strategy to ignore and mock at the Netflix threat instead of addressing it, was bad decision making on the executives part. 

 

The appropriate organization learning disability that would apply to Blockbuster is the parable of the “Boiled Frog” due to the business’ slow reaction to surrounding threats.  According to the parable, if you take a frog and put it in a pot of extremely hot water, the frog will immediately try to escape out of the water.  But, if you put that same frog in a pot of water that is at room temperature, and gradually increase the heat, the frog will get groggy and eventually allow itself to be boiled to death (Pollard, 2004).  Blockbuster did not really consider the threats that other companies within its market segmentation could pose.  Without the ability to maintain its innovation and creativity after its original owner departed the company, Blockbuster’s culture led the organization to the same failures as other organizations who fail to conduct a SWOT analysis.

 

As the global economy and market evolve at a growing pace, organizations should evaluate their business from a "job" perspective and identify the trends that can threaten or disrupt their means of fulfilling the job they're being hired for. Taking a sufficiently high level view of the job, organizations should perform periodic SWOT analyses to see what growing threats exist and where their weaknesses lie in relation to these threats.  By continually comparing their value proposition to those of competitors, an organization can proactively, rather than reactively, respond to upstarts and generate a new short and long term business strategies. 

 

References

Pollard. D (2004). The Boiling Frog. Retrieved January 7th, 2008 from http://blogs.salon.com/0002007/2004/02/06.html

 

 

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