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The world is in constant movement, always changing, because of it all things eventually become obsolete; technology, fashion, even mentalities and customs. Companies are not immune to this phenomenon and it’s the reason why, even when you feel comfortable and safe at any given moment, you should never stop innovating your business.

There are three main types of obsolescence within a company or business should avoid at all costs if they want to thrive and survive in the fast-paced business world. 

Product Obsolescence:

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It seems logical that in order to maintain a business you must first have a product or service with demand. A very famous example is the bankruptcy of the well-known Blockbuster video rental store, which issued memberships and allowed the members to rent physical copies of movies, series, documentaries, and video games offered in their stores. The first red flag came along with Redbox, a company focused on placing fully automated rental kiosks on Walgreens and McDonalds across the US offering the latest releases and the option of keeping the movie or game. However Blockbuster was still thriving internationally in countries like Mexico where Redbox was not competing. When Netflix entered the competition to provide entertainment with an innovative idea, the Blockbuster chain never imagined it would mark the beginning of its ruin. Relying on the loyalty of its customers and the lack of internet with enough capacity to meet Netflix streaming needs, Blockbuster did not even strive to innovate its product. Physical movies inevitably became obsolete when the internet rose in capacity and speed to easily support streaming services, which offered the same amount of entertainment options as Blockbuster at an affordable price and in the comfort of home. The absence of innovation and the strong belief the market would adapt to their product instead of adapting their product to the changing market, led Blockbuster to bankruptcy. Don’t let it happen to you! It’s very important to be aware of the trends and fashion of the moment. For example, one of the current trends is caring for the environment and customers are increasingly inclined to favor businesses showing and effort to become ecological. Your product or service has to be molded to what customers want or need, which changes frequently, that's why you need to aim to constantly innovate or otherwise prepare to perish. 


Operational obsolescence

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Operational obsolescence is a very broad type of obsolescence encompassing every functional area; technology, processes, human capital, organizational culture, and many others. However, one cannot understand business obsolescence in this technological era without touching on digital transformation. Administrative obsolescence is very common especially in Mexican or traditional companies. Older people have a harder time making the increasingly necessary technological dive in order to stay in the race. Digital transformation may seem like a tedious process, especially when you need to train a large number of staff, however, once implemented the intensive use of technology there will be much more accessibility and efficiency in all administrative processes. 

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From doing evaluations, collecting data, composing reports or quotes, sending and receiving payment orders, connecting with customers on the other side of the world, even opening the doors to an international market; technology can take any business to new heights or ... it may be what leads to its demise. More and more companies are making the change and if your business doesn’t, it may no longer be compatible with the needs of your customers. For example, if the customer wants to send a payment order and the company only uses a fax, it becomes inconvenient for the customer, who may then start looking for another provider better adapted to the times; this is why it’s worth investing in technology and in technology training.

Operations obsolescence can be from your production line to the conditions in which your collaborators work. Making use of old mentalities or perhaps restricting your collaborators to small spaces without freedom of self expression does not make a company attractive to work in. This in turn drives away talented individuals worth hiring. Also if you fail to to update your working equipment or fail to keep up with the existence of new materials or processes that achieve higher production at a lower price, competitors may eventually start offering much lower prices with which you won’t be able to compete. 

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Avoid operative obsolescence by approaching experts, looking for ways to get the most out of technology and keep informed of changes in the business world and Industrial processes. 

Marketing Obsolescence:

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As we already mentioned, society is constantly changing. This includes mentality, tastes, priorities, interests, etc. which in turn directly influences the way customers buy. Using outdated models to attract customers like newspaper ads, giving out flyers, or buying billboard spaces are not entirely bad practices, however, they have a very limited reach and have the mindset of “the more people see it, the more likely it is to reach the right customer”. Now there are much more effective ways to reach the people with higher probabilities of becoming a customer. Inbound marketing strategy, for example, uses the internet and social media methods to reach the right customers and avoid wasting energy, time and money on advertising with little scope.

These were the three types of obsolescence you should avoid if you want to keep your business alive. It is a heavy workload to innovate a business that hasn’t updated in a few years. This is why, to help to renew your business, there are “business accelerator” programs which help you reform, reinvent, and innovate your business while preparing you to compete in an international market. 

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If you stay still, you’ll be run over .… don't wait any longer, start innovating now!