Quick: close your eyes and describe to me what a cordless toothbrush would be like if it was designed by Apple.

What color would it be? What would the finish look like? What materials, what tactile feedback would it give? What would it feel like on your teeth? What would it sound like?

We used to do this with Sony back in the day.

In the 1990’s, when I was there, Sony was the most powerful brand on earth. You could imagine any product and describe in detail the mat black finish, the beveled edges, where the Sony logo would be, what the buttons would feel like and everything else.

Apple is what Sony was.

Which makes it hard to watch Sony ads today that have stooped so low as to require actors to wear Sony shirts just so we can figure out who makes these strange products. What was once iconic is now the joke whose punchline needs more explaining.

Sony CEO Howard Stringer hit the nail on the head recently in an interview where he bristled at the notion that Sony had slipped technologically. From an interview carried in Bloomberg:

It’s not lack of sleep, though, that irritates him when it’s suggested that Sony is not considered the innovator it once was. “Oh, f–k, we make so much more than we used to,” he said. He ticked off some of the products coming out this year, including binoculars that can record video and goggles for watching 3-D video games and movies. Don’t tell me that Sony technology isn’t great,” he said.

Goggles for watching 3D glasses? This is the company that created the Walkman.

Sony, unfortunately, is a cautionary tale in how a giant missed a key structural shift – a concept that Dr. Steven Feinberg discussed with me in his interview in Killing Giants: 10 Strategies to Topple the Goliath In Your Industry. While many would point out that the first shift the once mighty company missed was the entire idea of digital, the scond – and more damaging – mistake was missing out on The Internet.

How could this master innovator miss launching iTunes, iPods/Pads/Phones and everything else? They should have launched the Kindle. They should have launched Netflix. Hell, they could have launched Zipcar – with a Sony branded Tesla Motors – had they continued on the trajectory they were on  in 1995. Alas. Not to be.

When I was in the boardroom at the first unveiling of the competitive Diamond Rio (for those members of the class too young to know, the Diamond Rio was the first – the absolute first – digital music player), the bureaucracy ensconced at the top of Personal Audio declared, and I quote: “Digital music will never reach the technical quality of linear tape.” Somebody actually said that.

It pains me, because I truly love the company. For some strange reason, some small part of me still bleeds Sony blue. I’m not sure why, given the state of affairs, but I do.

Sony, unfortunately, gives us a cautionary tale of a former Giant felled by many Giant Killers, all of whom saw the structural shifts before Sony did.

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Key Takeaways:

How do you avoid this? I wish this was easy. It’s not. These shifts are often easier to see in the rear view mirror. But in the spirit of providing some guidance here, consider the following:

1. What has materially changed in your customers’ lives in the past year? The past 3 years? What technological, societal, socio-economic or other “structures” have shifted? Zipcar saw the collapse of the economy, the rise of smart consumerism, the desire for a lower carbon footprint, the appearance of smartphones with LBS and GPS capabilities and the comfort that consumers had with Internet-based self-service. Hertz had the Number 1 Club.

2. What do these shifts mean for your “Giant”? What could they mean to you?

3. Which of these shifts are you actively disregarding? Which ones do you dismiss with complete contempt – just like Sony did with the Rio? Ask yourself a simple question: What if you’re wrong?

4. How would you draw the spokes radiating out from the central hub of these shifts, articulating how you could take advantage of each? How would “the rise of smart consumerism,” where fewer better purchases are made and each purchase must compete with all other potential purchases, impact your offering?

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Sony’s downfall also shows what happens when a visionary leader – Akio Morita, in Sony’s case – leaves the helm. A cautionary tale for Apple, as well, isn’t it?