IT Management - CIOInsight
Home arrow IT Management arrow 8 Epic Computer Industry Failures

IT Management Slideshow:
8 Epic Computer Industry Failures

By Dennis McCafferty on 2011-02-11


Anyone who's seen the movie, Talladega Nights, will recall the signature line, “If you ain't first, you're last.” While this philosophy may serve a racecar driver well, it doesn't necessarily translate to success in IT innovation. Front-runners run the risk of “canary in a coal mine” syndrome, serving as a test-market study for other organizations to follow, avoiding unforeseen trapdoors that the pioneers exposed through their failures. In the book, The Limits of Strategy: Lessons in Leadership from the Computer Industry (iUniverse/Available now), author Ernest von Simson presents the history of the computer age in nearly epic literary style, weaving it together with lessons learned in other eras from historic industry legends, such as Henry Ford. Ultimately, von Simson's examination of the failures of a number of technology companies is meant to foster a greater understanding of success. Von Simson is an IT-industry research veteran who has worked alongside Michael Dell, Bill Gates, Steve Jobs and Scott McNealy, von Simson co-founded the Research Board and is now senior partner at Osrtiker von Simson. Here are lessons learned from his book that pinpoint eight common organizational behaviors/philosophies/patterns that often lead to failure, along with von Simson’s take on the companies that stumbled and soared as the result of these business dynamics:

LATEST STORIES

BLOGS
 
  • of
Trailblazers can suffer from “first-mover” disadvantage.Being first doesn't always guarantee longevity.

Corporate example:Tandy foreshadowed the business application of PCs. Commodore introduced household-friendly pricing. Latecomer Dell outlasted both of them.

Technology alone cannot guarantee success.It's part of a total, strategic package within an organization, along with an equally important business model attuned to current market.

Corporate example:Amdahl Corp. initially leapfrogged IBM with advanced semiconductor components, but was overcome by IBM's superior research, scale and market positioning.

Traditional competitors overshadow newer, more dangerous ones.A company will zero in on an “800-pound gorilla” while ignoring quicker, more agile competitors who eventually dominate the field.

Corporate example:Digital Equipment zeroed in on Data General and Wang. But it ignored Sun, which overwhelmed old-line minicomputer companies with more competitive technologies, business model and sales force.

Great success ofteneads to rapid failure.This is because success makes organizations settle into patterns and practices that aren't suited for change.

Corporate example:Nearly the entire tech universe in the late 1990s, before the Dot Com crash. Many companies were so blinded by success they missed warning signs that undermined assumptions about gross margins.

Assets from one period can quickly degrade into burdens.Whether assets are “stuff” (equipment, hardware, software programs) or people, CIOs and other leaders may remain committed to these even when it's not in the organization's best interest.

Corporate example:Suppliers of mechanical calculators like Monroe and Victor Comptometer counted on training facilities and field-repair folks as strategic assets. But customers didn’t need this after cheap, electronic calculators were introduced.

Acquisition-based transitions will target the wrong assets.New ownership favors its own people/practices/equipment over the acquired assets for no reason other than personal biases.

Corporate example: AT&T acquired and nearly suffocated NCR, in part to mollify in-house staff working on Unix and 3B microprocessors.

Consensus results in “mushy middle” leadership.CIOs and other leaders too often seek to lead by taking “the temperature of the room” rather than holding firm to their own strategic vision.

Corporate example:Resisting this trend, Lou Gerstner resurrected IBM’s mainframes with new technology and pricing – and still built out its software/services.

Successions are constantly ill timed.Too seldom do organizations seek to replace leadership when it should – when times are good, not bad.

Corporate example:Wang Labs hesitated to replace An Wang, even when the brilliant founder was too ill to recover business losses sent in motion by the PC.

  • More slideshows

FEATURED SPONSORED VIDEOS

FEATURED SPONSORED ARTICLES

Erasable E-Paper Saves Trees, Cuts Costs

Why Smart Companies Should Adopt the Lessons of Gaming

Interest in Mobile WiFi Hotspots Fuels New Solutions

A Closer Look at Public Cloud Security

View More Articles

  Brought to You By
Click Here



 

Advertisement

Sponsored Links
  • Try Windows Azure free for 90 days

  • Introducing the world's first family of systems with integrated expertise

  • FREE Securing Smartphones & Tablets for Dummies Book from Sophos
  • 77% of the Fortune 500 Manage Content Securely with Box.
  • Leverage your virtual computing environment with Dell.
  • Build an IT Infrastructure That Delivers the Future
  • 5 New Technologies That Will Change Enterprise ITAdvertisement
  • eWEEK Quick LInks

     
    Close this advertisement