We’ve all had to endure the endless drip, drip, drip of a water leak somewhere in our house or appartment. When it’s a tap, it drives you nuts, but at least you can see it and do something about it. The real problem is when the leakage is behind a wall, or under a floor. Water infiltrates and then rots the structures. This can end up costing a lot to repair, and can even undermine the most solid of buildings.
I call this the Infiltration Principle. Small changes accumulate, sometimes in full view, but mostly out of our view. Like water, they infiltrate our structures, and if nothing is done to stop the seepage, they cause them to fall apart from rot. In some cases they even undermine our structures.
This is usually what happens to companies’ competitive positions and business models. They are rarely destroyed by big attacks from the competition or major changes in the environment that everyone can see. Instead, they erode from the inside, as the slow infiltration of new tastes, evolving technology, and more aggressive business models turns them into a water-logged pile of rotting wood.
As I point out in my forthcoming book, Brilliant Manoeuvres: How to Use Military Wisdom to Win Business Battles, this is exactly what happened to the newspaper industry. It’s a commonplace to blame the demise of print news on the Internet, but the first signs of water erosion actually occurred with the introduction of radio. When TV became the foremost source of news and entertainment in the 1950s, it eroded newspapers’ position further.
The Internet has simply been the coup de grâce. When the final assault occurred, it appeared to come from out of nowhere. The last bastion of newspaper strength was local advertising, and it was Google’s business model that destroyed it. Now the only newspapers that are still viable have to have an online component, and must provide some form of local content to offset the power of online search and content generation. That is why most newspapers are now no more than ‘home town gazettes,’ even in large cities.
The steady drip, drip, drip of new technology eroded and rotted newspapers’ originally dominant position from within. It infiltrated everyone’s lives while newspaper managers were focused on their own business models and competitors who were identical to them in all but a bit of their content.
That is the principle of infiltration in action to undermine one’s position and structure. Tomorrow I’ll examine how it can work to one’s advantage.
© 2012 Richard Martin. Reproduction and quotes permitted with full and proper attribution.