In a few days, I will open with my colleague Javier the spring-summer semester at Berklee School of Music with a new course on Globalization and Leadership. While preparing my classes I was wondering about the current situation of the music industry. In the last few months, we saw a giant music chain as Virgin drawing an emergency plan to save their stores in France or UK. This situation of absolute collapse is not a surprise as customers shifted to the digital music, but how is it possible that the executives of this thriving, hyperprofitable industry didn’t take steps to prevent the music business from dying?
I think that the reasons are simple and mostly have to do with CHANGE. No one stood up and made the change happen. They just ignored the world around them and believed that without changing anything, without moving where their customers were, the industry would be there forever.
It didn’t. Do not forget the golden rule that the past performance is no guarantee of future success. The new business model arrive and if they suit to customers’ needs, they will gain the ground and replace outdated business models.
Think a little about Apple. With iPod digital media player and iTunes.com online store, Apple created an innovative new business model that transformed the company into the dominant force in online music. They bet on innovating the business model, creating value for their customers and society and they succeeded, becoming the number one music seller. Do not forget that change is the only thing that doesn’t change!