Demise of a Company

On the 15th of June at the Cisco’s Customer conference with 25,000 attendees,John Chambers had the following dire prediction:

"40% of businesses in this room, unfortunately, will not exist in a meaningful way in 10 years; adding that 70% of companies will "attempt" to go digital, but only 30% of those that try it "will be successful."

In his April 8th, 2015 letter to the shareholders of JPMorgan Chase, Chairman and CEO Jamie Dimon had the following to say: “Silicon Valley is coming. There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking”.

The fact that change is coming is evident everywhere we look. Uber is not a Taxi company, it is a technology platform, but is probably one of the largest suppliers of on road “car for hire” in the world.  Airbnb is a website for people to rent out lodging. It has over 1,000,000 listings in 34,000 cities and 190 countries. Some of the highest revenue generating movies in the recent past really did not have live actors but were computer generated. Toy story set the trend as early as 1995.

With all the change, right in front of us, just how many organizations are ready to face the emerging future? If we sit back and analyse the situation, not many are aware of the new reality and are heading for an untimely demise. There could be many reasons but I have chosen the following three as the ones I see most damaging; and cause for the inability of companies to reinvent themselves in the face of adversity and challenge:

Hubris of Business as usual

The Eastman Kodak Company was established in 1888, and till about 1976 commanded almost 90% of the total market for cameras and film sales in the US. So ingrained in the mindset of its leadership was its infallibility and the strength of its brand that it refused to sponsor the 1984 LA Olympics, in the photography section, allowing a virtually unknown company “Fuji” the right to sponsor and in turn gain a major foothold in the US market. Kodak filed for bankruptcy in January 2012.

Hubris is a word derived from ancient Greek “hybris” and refers to situation where there is a loss of contact with reality and an overestimation of one's own competence, accomplishments or capabilities. That is why "Past accomplishments do not guarantee future success."

The Light Brigade Syndrome

On the 25th of October 1854 during the Battle of Balaclava in the Crimean War between the British and Russians a British Light Brigade made a fool hardy charge at a well-entrenched Russian position, for no apparent reason but to go forward. Needless to say, there were huge casualties without any reciprocal advantages. This was immortalized by Lord Tennyson’s poem “The charge of the light Brigade”.

This is a common occurrence when companies in an unrelenting pursuit of market share and growth loose perspective. The reality is, innovation and profitability is more important than market share; especially in an environment where technology has changed product preferences and delivery capability to an extent you cannot predict the shelf life of your product or service.

Nuremberg Defense Mind-set

At the closure of World War II there was a call for the bringing to justice the leadership of Nazi Germany responsible for carrying out the Holocaust and other war crimes. The trials were held from November 19, 1945, in the German city of Nuremberg.

One of the most important stratagems for pleading “not guilty” by these war criminals was that they were "only following orders."  Adolf Eichmann, one of the most prominent Nazis to use this defense at his trial (held in Israel in 1961) stated “I did not persecute Jews with avidity and passion. That is what the government did. . . . At that time obedience was demanded, just as in the future it will also be demanded of the subordinate”.

We use the excuse of following instructions and orders, rather than our belief in their being right or wrong.  We avoid applying logic and sense in our work because it’s so easier just following orders. That is why companies do not innovate. We happily induce a Nuremberg Mind-set, rather create a culture of innovation and change.

I would appreciate feedback and comment.