In the “How I Made It” feature of Sunday’s Los Angeles Times, Steven W. Streit, founder and CEO of Green Dot Corp., the nation’s largest provider of prepaid debit cards, talked about how he went from being a disk jockey to becoming a wealthy entrepreneur. What caught our eye in particular was a passage about an early twist in the rise of the prepaid card.
“Streit thought teenagers would use his cards for online purchases,” the Times reported. “But when drugstore chain Rite Aid became the first big retailer to sell the cards, credit-challenged adults proved to be the main buyers.”
While following the money and gearing your product to a different demographic than you’d originally intended might sound like a simple move, it’s not so easy at all. It’s a phenomenon that Peter Drucker called the “unexpected success” (a term we’ve touched on more than once), and he liked to point out that companies often deal poorly with it.
“It is never easy for a management to accept the unexpected success,” Drucker wrote in Innovation and Entrepreneurship. “It takes determination, specific policies, a willingness to look at reality and the humility to say, ‘We were wrong!’” That is to say: Things may be working out, but not as you’d planned. And this situation, said Drucker, “can be galling.”
Drucker cited numerous instances of companies ignoring their own successes. Macy’s tried to stifle the growth of its appliance sales because it “knew” its business was fashion. A pharmaceutical firm missed out on a huge veterinary market because it considered its drugs too noble for non-human use. Americans ignored their own invention of the transistor and allowed Sony to bring out the first transistor radio.[EXPAND More]
All too often, “the unexpected success is simply not seen at all,” Drucker noted. “Nobody pays any attention to it. Hence, nobody exploits it, with the inevitable result that the competitor runs with it and reaps the rewards.”
And this is a shame, because the “unexpected success is likely to open up the most rewarding and least risky of innovative opportunities.”
Has your organization ever encountered an “unexpected success”—and, if so, was it exploited or squandered?[/EXPAND]