Friday, February 3, 2012

Why late adopters and industry forsakers succeed

Art Wittman said the following:

As the PC industry grew up, Apple made advances; IBM made reference designs; and Compaq, Dell, and a pile of others made the money by offering incremental improvements and running the licensed operating system of the day.

And the lesson isn't bound to the 1980s. Wittman extends the lesson to the 21st century. Read here.

Note that the companies that made money in the 1980s are not necessarily the companies that are making money today.

Why? Because most companies, with very few exceptions (Microsoft and IBM come to mind here) can offer good or great performance over multiple decades. And those few companies that continue to succeed do so by reinventing themselves - Microsoft by adopting the Internet, IBM by embracing services and dumping laptops. Apple, which went from success to failure to success, did so by taking the steps to gain market share in a new market - a market outside of the computer market in which it had formally made its mark. (Apple even changed its corporate name.) There are other examples - I doubt that Minnesota Mining and Manufacturing (DISCLOSURE: A COMPETITOR OF MY EMPLOYER) has done any mining lately, and there are no lumber mills at today's Nokia.

Meanwhile, Hewlett-Packard (the corporate successor to Compaq, Digital Equipment Corporation, and several other companies) stumbled and reversed itself. In fact, the title of Wittman's post declares that HP's fired head Apotheker had it right when he tried to jettison HP's personal systems group.

Chances are that thirty years from now, Wittman's stellar corporate examples of today - LG, Samsung, Asus, Lenovo, and the like - will be looked upon as has-been failures, if they even exist. (Many former stars - Compaq, DEC, Tandem, Lotus, EDS, etc. - are long gone.) Unless leaders in those companies are brave enough to say that the old ways aren't working, and that the companies need to transform themselves.
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