As the fourth season of AMC's (NASDAQ: AMCX ) Walking Dead approaches, the University of California at Irvine is jumping into the craze by offering a free online course, "Society, Science, Survival: Lessons from AMC's The Walking Dead."
Although some people might dismiss the program as a publicity stunt, it raises an interesting question about the hit zombie show -- can businesses learn any valuable lessons from Rick Grimes' motley crew of survivors?
Indecision and inaction have dire consequences
Throughout the first three seasons of The Walking Dead, Rick Grimes matures from a reluctant survivor unwilling to make the hard decisions into a hardened leader ready to make necessary sacrifices. Throughout the first two seasons, Rick sits on the fence during crucial decisions, and his indecision eventually leads to dire consequences when Hershel's barn is overrun by walkers at the end of the second season.
In business, the same rule applies -- inaction and indecision can be more harmful to a company than the wrong decisions. There is no industry as unforgiving of this as the tech industry. Xerox (NYSE: XRX ) was once the Apple (NASDAQ: AAPL ) of its day, with sales of copy machines rising year upon year until its share price peaked at $62 per share in 1999. Eventually, cheaper copy machines and computer printers took over, and Xerox faded away into a shadow of its former self, now worth just barely more than $10 a share.
The same can be said about Polaroid and Eastman Kodak, which were buried by the revolution in digital cameras and smartphones, and Microsoft and Hewlett-Packard, which missed the technological shift toward mobile computing.
Companies like these would be satisfied to live out the rest of their lives on Hershel Greene's farm, oblivious to the fact that starving zombies are approaching from all sides.
Pride and complacency
BlackBerry (NASDAQ: BBRY ) (formerly known as Research in Motion) and Nokia (NYSE: NOK ) are two other companies that sat idly by as their core market was devoured by Apple and Google (NASDAQ: GOOG ) .
These two companies might as well have been led by Morgan Jones, the man who first rescued Rick in the first season. Morgan was convinced that staying still and defending his home was the only way to survive -- and he ended up isolated and hopeless by the third season.
Morgan was convinced that he was on the right track,strengthening the defensive barricades outside of his home and sticking to his daily routine. Yet in reality, Morgan was not only trapped within his home, but also in his mind.
BlackBerry was stuck in this kind of mind-set for years by former co-CEOs Mike Lazaridis and Jim Balsillie, who founded the company and led it until 2012. They grew complacent due to the massive enterprise adoption of its BlackBerry devices between 1999 and 2007, which convinced them that they had nailed down the market. Nokia's former CEO, Olli-Pekka Kallasvuo, and the company's Finnish board were also enamored with their company's past triumphs, believing that their leading position in mobile handsets was indomitable.
Unfortunately, Apple's iPhone arrived in 2007, followed by a legion of Google Android-powered handsets, swarming BlackBerry and Nokia's market like the horde of zombies that destroyed Hershel's farm at the end of season 2. BlackBerry's stock price fell from a peak of $230 per share to a mere $8 today. Nokia dropped from $58 to $6.
Just like BlackBerry and Nokia, Morgan didn't attempt to leave his house. He was unable to shoot hits zombified wife despite being given multiple chances. In the end, his wife chomped down on his son and he had to put both down.
Making the most of your resources
Survival is a key theme of The Walking Dead -- not only in regards to zombies, but also in terms of food, water, and weapons. Rick's group had to make the most of the resources it had, taking care to not waste any.
This is a key lesson that many large businesses ignore until it's too late. J.C. Penney's (NYSE: JCP ) former CEO, Ron Johnson, was notorious for this. Convinced that it would take a drastic effort to turn around the ailing retailer's operations, Johnson spent heavily on expensive renovations, new marketing campaigns, and a new "everyday low prices" strategy that alienated and confused longtime shoppers.
By the end of fiscal 2012, Johnson's strategy caused J.C. Penney to lose nearly a billion dollars. For the full year, J.C. Penney's same-store sales plummeted 25.2% year-over-year and e-commerce sales -- traditionally a bright spot for retailers -- plunged 32%.
If Johnson were part of Rick's crew, he probably would have traded the survivors' food, water, and guns for wallpaper, curtains, and a few pink flamingos to decorate the prison.
Taking out a friend before he becomes an enemy
For me, the climax of The Walking Dead came at the end of the second season in the final showdown between Rick and Shane. Nothing after that came close to matching the intensity of that scene, in which Shane, who was once Rick's best friend, attempted to kill him.
In business, the battle between Apple's Steve Jobs and Google's former CEO Eric Schmidt was quite similar to the clash between Rick and Shane. For years, Schmidt sat on the board of Apple's directors, apparently one of Jobs' closest allies. Unfortunately, just as Rick and Shane both had their eyes on Lori, Jobs and Schmidt were both looking to control the mobile Internet.
Apple and Google did well together at first, with the launch of the iPhone in 2007. The marriage between Apple's hardware and software and Google's cloud-based apps seemed to be a happy one that would benefit both parties immensely. However, Schmidt didn't want Google to play second fiddle to Apple, which led him to oversee the release of Google Android in 2008 and resign from Apple's board in 2009. Jobs saw the act as the ultimate betrayal, which led to his famous "thermonuclear war" tirade against Google.
Just like Rick, Steve Jobs was so busy analyzing the outside threats that he didn't pay enough attention to his inner circle. Yet unlike Shane, who met his end with Rick's knife in his chest, Schmidt strolled away from the conflict unscathed, and today Android accounts for 52% of the U.S. smartphone market while Apple iOS controls 41%.
A final thought
These are only four lessons that businesses and investors can learn from the ordeals that Rick and his group faced in The Walking Dead. What other lessons can viewers learn from Rick's actions? I'm eager to hear some of your ideas.