It’s not just elections and Super Bowls, it’s easier than ever to blow a big lead.
In case you’re in the rare triple intersection of people who didn’t watch Super Bowl last night, don’t have social media, and aren’t subscribed to various breaking news alerts (seriously, I got breaking news alerts about a football game) — I’ll fill you in: Last night, in one of the greatest upsets in the history of American football, the New England Patriots overcame a 25 point deficit halfway through the game to defeat the Atlanta Falcons.
Without going into the nuances of the game, this was incredibly improbable. In fact, such a deficit had never been overcome in the half-century of preceding Super Bowls.
My Facebook feed was filled with people, including Patriots fans, who assumed that the Falcons had already won the game and turned the game off at half time. Like many others in the past year, they woke up to a stunning surprise.
This past year seems like one long story of blown leads. So much so that blowing a big lead became a top meme of 2016.
The world moves faster and is more interconnected — and therefore more variable and unpredictable — than in the past. Records seem to be broken with ease and upsets are becoming the norm. We’ve studied and tweaked every aspect of human excellence so much that even minor stumbles can quickly become devastating defeats.
This is as true in business as it is in politics or sports. The strategies and training that guaranteed success in the past are failing us now.
For example, companies used to be content outsourcing innovation costs to venture capital investors. If you got a lead in your market, you could coast along and use your superior capital position to make acquisitions while VC’s invested in startups and bore the risks of failure.
The speed of the modern economy killed this strategy.
In the era of “big bang disruption”, that model has broken down. Before anyone in the taxi or livery industries realized what was happening and could apply capital advantages, Uber had grown beyond their ability to afford. Although Uber’s exact valuation is a matter for spirited debate, every model puts their value at greater than that of the entire annual revenue from the U.S. taxi and limousine industries combined.
You can no longer just acquire your industry’s Uber, because by the time you figure out that you should they may be bigger than you are.
When new entrants can outgrow your capital advantages faster than you can bring them to bear, coasting on a comfortable lead is no longer a viable strategy.
If you feel like competition is more aggressive than in the past — take a deep breath and let it out slowly. You are not wrong. The world of work has gotten more complex and more competitive. We compete with everyone everywhere every minute of every day.
John Hagel has done excellent research on the increasing rate of depreciation in knowledge stocks. If you have a competitive edge created by a bit of proprietary knowledge, you can expect that edge to help you keep your winning position for now more than about 5 years.
Lead positions are more tenuous than ever.
The average lifespan of a company on the Fortune 500 — a position which used to define a cornerstone of the American economy — has declined from 75 years to just 15 years and is projected to soon be as low as 5 years.
Today, it’s almost as surprising if a company that’s winning now continues winning as it is if a scrappy startup wins.
To survive, companies have had to start focusing on putting themselves out of business rather than wait for some startup entrepreneur to figure it out for them.
If last night’s game was a modern market position, the Atlanta Falcons would have started their own small football team using their backups and practice squad and started trying to figure out how to beat their starting line up mid-game. In a world where competition is faster and more vicious than ever and disruption happens in years instead of decades, you can’t wait for competitors to attack. By the time you figure out what they’re doing, it may be too late.
The commentators last night quoted Bill Belichick as saying that if you have to make significant adjustments at half time you’re too late. When everyone is playing at peak performance, falling behind just a little bit can cost you the game. Relying on your quarterback to throw 67 yard touchdown passes with zero seconds left on the clock is not a strategy (I’m looking at you, Green Bay Packers).
If you’re doing any business worth doing, someone somewhere is coming for you. The best way to keep your winning position is to dedicate smart people with significant resources to figuring out how that winning position could be taken away from you. If you can figure out a way to beat you, someone else will eventually figure it out as well. It might as well be you that knocks you out of the top spot.
Don’t let your trophy become an anchor.
