LET GO AT THE TOP

The more successfully integrated…

…a firm’s capabilities are, the harder it is to shift its expertise by changing just a little. Thus successful firms are more prone to failure during high rates of change. (Success makes it easy for the successful to deny this fact.) Indeed, the very success of successful organizations makes them conservative toward change–because they must unravel many interdependent skills–even if some are working fine.

The problem that IBM faced with the arrival of the personal computer in the early 1980s was not the problem of acquiring technological know-how. As a matter of fact, IBM already knew how to build personal computers better than anyone. But the package of proficiencies the blue suits had honed over the years to make IBM indomitable in the mainframe computer field could not be gradually adapted to fit the new faster-paced terrain of desktop-based computing. IBM was supreme in the old regime because their sales, marketing, R&D, and management skills were all optimally woven into a highly evolved machine. They couldn’t change the size of the computers they sold without also altering their management, forecasting, and research skills at the same time. Changing everything at once is difficult for anyone, anytime.

 

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This is a blog version of a book of mine first published in 1998. I am re-issuing it (two posts per week) unaltered on its 10th anniversary. Comments welcomed. More details here.
-- KK