How The Mighty Fall?

Jim Collins in his recent book "How The Mighty Fall" presents the five step-wise stages of decline. They are:

1. Hubris Born of Success
2. Undisciplined Pursuit of More
3. Denial of Risk and Peril
4. Grasping for Salvation
5. Capitulation to Irrelevance or Death

While this may apply to specific organizations, what I have been reflecting on is how does an entire industry fall? What keeps them from reinventing themselves? Does the answer lie in how they define their business and the unit of measure they use to measure success? Please allow me to elaborate.

For example, thinking of the music industry, in connection to the graph above, here's what comes in my thoughts:

WHY: To record and distribute music
WHO: Target markets for various types of music
HOW: Sign-on artists with various labels
WHAT: To distribute music via various mediums. Initially the record, then tapes, CDs and now electronic distribution.
IMPACT: Enjoyment by music by many while achieving business success

So where did they go off-course? The more I reflect on it, the more I believe it's in how they defined their businesses. For example, we use to hear terms like: record stores, which record label did a musician sign with, how many records sold, and so on. And profits were tied to number of records sold and therefore infrastructures were developed to sign on popular artists with the express purpose of selling more and more records. Thus the measure of success was number of records sold.

In other words, they were in the record business and success & profitability was defined and measures by how many records were sold (and later tapes and CDs). Then came in MP3 players and as they say, rest is history.

I wonder how would they have functioned and where they would be today if they had defined themselves as more as being in the music business and measured success by number of songs sold, rather then being defined by the medium through which music was recorded and distributed?

What are your thoughts? What business are you in? How do you define and measure success for your organization?