In the 1950s, people didn’t have bikes; they had Schwinns. These sturdy, heavy-framed bicycles dominated the market, and the brand was a household name.
In the 70s, European cycling culture began to influence North American trends. Instead of the 2-wheeled equivalent of a woody station wagon, people wanted lightweight touring, racing, and mountain bikes. Schwinn’s bulky builds didn’t appeal to consumers anymore. The Schwinn factory, built to churn out only their signature model, became irrevocably obsolete. It would seem external forces brought Schwinn down, but did they?
INTERNAL RESPONSES COUNTER EXTERNAL FORCES
When a business begins to stall, it’s tempting to blame external forces – the bad economy; uncertainty around suppliers; the shift towards online sales or media. There are always things beyond a business owner’s control that could trap them on the Great Small Business Plateau.
There is a natural inclination to look outwards because it is easier to say, “The economy sucks,” than, “We suck.” But business owners err if they fixate externally rather than directing attention inwards, to their own operations.
In Schwinn’s case, it wasn’t that European influences made the business irrelevant. Schwinn could not anticipate the change, and didn’t keep up with international trends. They didn’t adapt to new technologies.
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Here’s another example: in September 1982, seven people were killed by taking Extra-Strength Tylenol that was laced with potassium cyanide. The distributor, Johnson & Johnson’s responded to this crisis swiftly, aggressively and openly. By November, the company introduced triple-sealed, tamper-proof packaging. Their market share sunk from 35 percent to eight percent, but rebounded in less than a year.
This external force that might have derailed the company pushed them to respond and become stronger. Ultimately they were praised for their speed and ingenuity. Their internal reaction countered – and beat down – an external factor that threatened their success.
SOMETIMES, EXTERNAL PRESSURE REALLY IS TOO GREAT
Internal factors are almost always more influential – but this comes with some big caveats. If you were a mortgage broker or real estate agent during the Great Recession, then feel free to blame external factors for those dismal years. There was virtually no way to have defied those forces; but in normal economic times, this isn’t the case. Most often, it is the internal responses to external factors that determine our success, or whether we stagnate on a plateau.