Decision Intelligence:
No More Bad Decisions

The downfall of Kodak wasn’t due to the rise of the digital camera – at least, not directly. Kodak actually made significant investments into early digital photography, and for a while was a major player in that market. 

Kodak’s failure was due to its stubborn attachment to photo-printing. It paid little attention to the rise of social media and instead viewed digital photography as an opportunity to expand its photo-printing business. 

With better decision intelligence, Kodak might have noticed that customers had lost interest in print photos before it was too late, and it might have recognized the need for a digital transformation.

Many attribute the fall of Blockbuster to the rise of streaming video. While streaming was certainly its death knell, that was only the case because of a long string of poor business decisions going back to the mid-1990s. 

Blockbuster’s inflexible business model depended too much on high-rent storefronts. Between high overhead and competition from DVD retailers like Walmart and Target, it only managed to turn a profit for two years between 1996 and 2010.

It was already in a precarious situation, but when Blockbuster declined to buy a startup named Netflix in 2000, it signed its own death warrant. Sleeping on this opportunity soon led to the rise of a rival that quickly proved more flexible, sustainable, profitable – and durable.

Business intelligence couldn’t have prevented the wide variety of lapses in executive judgment that led to Blockbuster’s collapse. However, it may have resulted in more sober day-to-day choices that offered the stability to recover from such major errors.

It’s been said that the operational definition of insanity is doing the same over and over and expecting different results. Cell phone titan Motorola’s sudden collapse was the result of a years-long engagement in operational insanity going back well before cell phones even existed.

Before the cell phone, Motorola was the primary supplier of two-way radios to emergency services and the military. When the rise of cell phones made two-way radios obsolete, it became one of the primary cell phone manufacturers – but instead of pivoting, it split itself into two companies out of a desire to focus on radios, which it still imagined to be its main product.

With every new innovation over the following decade, Motorola remained stuck on the idea that the previous generation of technology was its core product. It split itself into smaller and smaller business units and was eventually forced to sell off those businesses until there was almost nothing left.

With better business intelligence, Motorola might have been able to assess what its core business was based on data instead of gut feelings and make the hard decisions needed to evolve.

The collapse of Toys R Us was mostly due to the failure to act in the face of change. For a long time, its convenience and low prices made it the center of gravity around which the toy market revolved. However, it never seemed to realize that by the 2010s, those days were long past.

The rise of convenient online shopping and bargain stores like Walmart put a lot of pressure on the retail sector. Some brick-and-mortar chains stayed afloat by offering online shopping. Others started offering unique in-store experiences to differentiate them from other stores and give customers a reason to show up.

Toys R Us had a business model based on convenience and low prices, but online retailers were convenient, and bargain stores were cheaper. Outdone from all directions, it simply failed to offer any reasons for customers to show up.

With good business intelligence practices, it’s likely that Toys R Us would have survived. These practices would have set off alarm bells in its headquarters by the early 2000s, and it very likely would have shifted its strategy instead of sleepwalking into bankruptcy.