Why Big Companies Die. Read and understand.
The company starts valuing the great salesman, because they’re the ones who can move the needle on revenues.” So salesmen are put in charge, and product engineers and designers feel demoted: Their efforts are no longer at the white-hot center of the company’s daily life. They “turn off.”
But those bar charts showing revenues have an enticing uptrend, and those reduced expenses on creativity can be hidden in bar charts showing falling costs.
It’s not just the salesmen. It’s also the accountants and the money men who search the firm high and low to find new and ingenious ways to cut costs or even eliminate paying taxes. The activities of these people further dispirit the creators, the product engineers and designers, and also crimp the firm’s ability to add value to its customers. But because the accountants appear to be adding to the firm’s short-term profitability, as a class they are also celebrated and well-rewarded, even as their activities systematically kill the firm’s future.
In this mode, the firm is basically playing defense. Because it’s easier to milk the cash cow than to add new value, the firm not only stops playing offense: it even forgets how to play offense. The firm starts to die.
Ah, but come up with a catchy
tagline, or paint a big
Q on the side of a boxcar, so that everyone knows how
au courant you are, and you'll have lots of material for case studies.
1 comment:
Yet Steve Jobs was himself one of the greatest salesmen of all time.
Xerox PARC didn't fail (from a business standpoint) because of a lack of product designers; I'd suggest that a primary reason it failed was because it was not sales-oriented and, moreover, was not organized as a true business unit or internal venture.
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