Three firms, each once dominant in their industry, are attempting to transform their operations and culture, and while it won’t be clear for a few years whether or not they will succeed, it is fascinating and instructive (and sometimes painful) to watch:
Microsoft employees in 1978 at company headquarters in Albuquerque, New Mexico.
- Microsoft, where a long-time, hard-charging number two has taken the reins from the man who founded the firm in 1975 and led it from a small handful of people to one of the world’s largest and most important companies.
- Nokia, a firm whose ascendancy to a dominant position globally was relatively recent. In the last three years they have been eclipsed in industry leadership and market capitalization, and in the consumer imagination, by two firms who entered the industry within the last couple of years, Apple (June 2007) and Google (September 2008)—and one of them doesn’t even make phones.
The company is now led by a long-serving senior executive who, while he preaches change, says following a brutal analyst meeting, We are not getting the benefit of the doubt. Adding, We need to change that.
To this, a long-time friend and Nokia alum who worked closely with many of the company’s senior executives, commented,
That would be your challenge! No one owes Nokia “benefit of the doubt” – you earn your way with cool, with “it” products at the right price, and that alone sustains a company. No amount of marketing or PR will save a substandard product.
- General Motors, a firm that once personified American industry, as shown in this ad in happier days . . .
. . . 12 months ago underwent one of the largest Federal intrusions ever in private industry and is now led by Ed Whitacre, an industry outsider who famously proclaimed, “I don’t know anything about cars” the day after he was appointed. (Lesson 1: Lower expectations.) Whitacre, a former telecom exec, has words appropriate for a firm of any size,
I want to make sure people understand that the responsibility for this company to be successful is not just with the C.E.O. It’s them.
My style is really just to say, “Let’s get going, let’s do something, let’s move, and let’s not be constrained by something that has happened in the past. Nobody is going to be fired for trying something new around here.
Some of the world’s most storied companies have faced major challenges that knocked them from their perch atop their industry. Some turned themselves around after many counted them out, only to return as an industry leader. Disney and IBM come to mind. Others are works in progress, including Sony, Kodak, Ford, and Boeing. And there are recent stars that are struggling, some with new leadership, such as Yahoo!, and others with largely the same management team, such as eBay.
Whether one leads a large company or a small one, it’s fascinating and instructive to watch all these companies. The trick, of course, is knowing whether one is observing success or failure in the making.
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Note: I’ve set set aside firms in the financial and health care industries, the shape and future of which will be greatly affected by Federal legislative and regulatory changes, and firms in any industry that can be easily digitized (e.g., newspapers, magazines, recorded music), which are all being radically transformed by the web.
Regarding the latter, this quote, attributed to Warren Buffet, comes to mind: When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is usually the reputation of the business that remains intact.
