Thursday, September 22, 2005

More on Company Death

I happen to like the beekeeper story, but I think it is incomplete. The author blames a company's demise on the leader leaving or changing, but I don't necessarily believe that is it. I think projects get larger and mature and they change in nature. Take Office. It doesn't have to get a ton of new whiz bang features out immediately. It has market share and it needs to maintain its dominance while not hurting quality. To do that, you add processes in place to control the change in the product and to ensure integration with other products. I'm curious if this is just natural product evolution. It doesn't have to be company wide. For instance, at MS the XBox, MSN Search, and V. Studio teams are still quite agile and seem to enjoy their jobs, where the larger, integrated systems people are miserable. Is it the leader? Is it integration? Is it complacency (wanting to maintain your product instead of revolutionize it)? Is it all 3? Why do some companies impose process in some areas and not in others whereas other companies impose process over the entire company at one time? What is the survival rate of each?

On complacency, I think that is a valid reason for a while. Office, in the past 5 years, has not had to revolutionize. I think that the open source movement and OpenOffice in particular has forced its hand and required Office 12 to be produced. However, therein lies the problem. When a new challenge faces a process laden product, it can't adapt. The top programmers have left to find projects with less process and processes have been inserted to maintain the quality in their absense. Now, the mediocre programmers are faced with a challenge that is too great for them, create a revolutionary project in Internet time. The processes don't allow it, the programmer's don't have the skills, and the result is a buggy product that is late and not close to what users expect or need.

Do I think MS is on its death throws? Most certainly not. It is too big to go down the tubes over night. However, many people thought the same thing about IBM and it lost huge amounts of market share and almost was divided into many separate, smaller companies. It took Lou Gerstner to turn the company around, eliminate the beurocracy, and get the company agile again. Coincidentally, Lou named his book, Who Says Elephants Can't Dance. It is a must read if you are in the technology sector as it directly addresses a company's shift from beurocracy to agility. Making a large company dance is an amazing feat. In Lou's opinion, it took a leadership change to make it happen. In fact, had he not come in time, they would have spun off many IBM divisions and it would have continued to decline. According to my interpretation of Lou, agility is not something that can come bottom up, it must be a leadership decision.

What about Oracle? How does it handle process? What are the other older and bigger tech companies: SAS, Apple, Sun - what do they do? What about larger tech companies that have failed: DEC, Compaq - what did they do wrong. I've studied Apple's problems and they seemed to stem from arrogance and a fundamental lack of marketplace economics, not process. It was more an unwillingness to change rather than an inability to change. Looks like it is time to hit the books...

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