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When New Technologies Cause Great Firms to Fail
Introduction
This book is about the failure of companies to stay atop their industries when they confront certaintypes of market and technological change. It’s not about the failure of simply any company, but ofgood companies—the kinds that many managers have admired and tried to emulate, the companiesknown for their abilities to innovate and execute. Companies stumble for many reasons, of course,among them bureaucracy, arrogance, tired executive blood, poor planning, short-term investmenthorizons, inadequate skills and resources, and just plain bad luck. But this book is not about companieswith such weaknesses: It is about well-managed companies that have their competitive antennae up,listen astutely to their customers, invest aggressively in new technologies, and yet still lose marketdominance.Such seemingly unaccountable failures happen in industries that move fast and in those that move slow; in those built on electronics technology and those built on chemical and mechanical technology; in manufacturing and in service industries. Sears Roebuck, for example, was regarded for decades as one of the most astutely managed retailers in the world. At its zenith Sears accounted for more than 2 percent of all retail sales in the United States. It pioneered several innovations critical to the success of today’s most admired retailers: for example, supply chain management, store brands, catalogue retailing, and credit card sales. The esteem in which Sears’ management was held shows in this 1964 excerpt from Fortune: “How did Sears do it? In a way, the most arresting aspect of its story is that there was no gimmick. Sears opened no big bag of tricks, shot off no skyrockets. Instead, it looked as though everybody in its organization simply did the right thing, easily and naturally. And their cumulative effect was to create an extraordinary powerhouse of a company.” ......
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