Tiger Woods' Loss: A Reminder for Leading Businesses

09/19/2009 05:12 am ET | Updated May 25, 2011

Yesterday, Tiger Woods, the world's undisputed number one golfer, lost a major after having the 54-hole lead for the first time in his career. His prior major record was 14-0 going into Sunday with a lead. He started yesterday with a two-shot lead and wore his symbolic Sunday victory red shirt. Every Tiger shirt at the venue was sold out by end of day Saturday. The consensus was clear that Tiger had this all but wrapped. Unless someone played brilliantly, Tiger would never lose it.

Y.E. Yang played amazing golf on Saturday and Sunday. But make no mistake about it, Tiger (and I am a huge Tiger fan) let this one slip. What does this moment in golf history have anything to do with business?

First, there is inordinate pressure at the top. Tiger Woods' focus and mental intensity are peerless, but he is human, just as businesses are, well, just businesses. Companies that are on top today have the odds stacked against them being leaders in the long run. Getting there is easier than staying there.

At the end of the day, statistics win and the statistics of business say that those in a top market-share position will almost certainly lose it or cede share. The question is not if, but when. It does not mean that the companies will not stay strong, important, and highly relevant, but it means that existing and new competition will take some shine off the star. Think of IBM today versus a couple of decades ago or GM as a government bailout asset versus its glory days. Heck, don't even go back that far. Just look at the top ten Internet properties today versus those three to five years ago and you find that many were barely in existence let alone on a top list a few years ago.

Second, competition will come from where and when you least expect it. Y.E. Yang was hardly a household name (at least in America) before this weekend. He was the 110th ranked golfer in the world with only one prior PGA tour win. There are business parallels. I don't think when Sony was on top of the portable music player market they ever suspected Apple to rise from the dead and dominate that space today. I doubt that the Clinton contingent ever imagined that the Junior Senator from Chicago (who they helped get elected) would move a nation behind him to win the presidency. And I doubt that Tiger Woods ever imagined that he'd lose this major to Y.E. Yang in the last major of the year. Padrig Harrington, Vijay Singh, Ernie Els, maybe, but Y.E who?

Being on top can foster complacency or an "if it ain't broke don't fix it" attitude. But to stay there, you need to continue to reinvent and learn. You need to to pay attention to people and areas where you don't suspect a threat. Staying relevant means staying abreast of those who want to be relevant and of customers in your industry and your adjacent industries. This is so challenging because it requires both intensity and open-mindedness.

One of Tiger's greatest qualities is his push to revisit and adjust his swing towards maintaining his domination of the game, which despite yesterday's aberration will continue for some time. Successful businesses also need to continually reframe their markets and business definitions to try and understand where things are going and where new competition might emerge. This means focusing on current customers while also understanding the customers of tomorrow.

I am often amazed as I watch my five-year-old navigate effortlessly on the iPhone to find his videos, pause them, switch to the key pad, and then play with one of the apps he has downloaded. The smart phone leaders of Apple and BlackBerry might want to project forward to what my son will want when he is ten.

This article first appeared on Harvard Business Publishing on August 17, 2009.