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Why Companies Die

11 March, 2019 by James Lawther Leave a Comment

The Entrepreneur:

A person who takes direct responsibility for turning an idea into a profitable new product or service.

The Intrapreneur:

An employee who takes direct responsibility for turning an idea into a profitable new product or service.

Spot the difference?

Is this the same job? There is only a vowel between them after all and they do very similar things…

To get an idea off the ground they both need to attend a lot of meetings. They must lobby for funding and persuade the great and the good to invest in their idea and not somebody else’s.  Then, after they have secured the money, they need to coordinate, organise and improvise. They do whatever it takes to make the idea a reality. 

The critical difference

In an entrepreneurs world all it takes is one man to say “Yes” and he gets the money he needs.  Then the idea will take on a life of its own.  

In the intrapreneur’s world all it takes is one man to say “No” and the idea will grind to a halt.  In all those “Design Reviews”, “Development Meetings” and “Investment Boards” all somebody needs to say is “No” and the idea will never see the light of day.

One man to say yes or one man to say no…

According to Credit Suisse the average lifespan of a fortune 500 company is under 20 years, down from 60 years in the 1950s.  Credit Suisse thank disrupting technology for this dramatic shortening of lifespan.

Of the 100 companies in the FTSE 100 in 1984 only 24 were still alive and well in 2012.  

No doubt you have heard the BlockBuster and Kodak stories. Do you also remember British Leyland, British Steel, Dunlop Rubber, Our Price Records, Plessy or Radio Rentals?

The management dilemma

How do you balance the need to innovate and improve with the need to reduce risk and maintain control? Which is most important?  An organisation with a bias for action or a bias for the status quo?

A job for life is a thing of the past.  Sooner or later all companies die, but that doesn’t mean you shouldn’t try your hardest to drag it out a bit.  Remember that next time you are about to say “No”.

I predict one day Amazon will fail…
We have to try and delay that day as long as possible

Jeff Bezos

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Image by Henning Mühlinghaus

Filed Under: Blog, Process Improvement Tagged With: bureaucracy, innovation, management style, perceived risk, what don't you see

About the Author

James Lawther
James Lawther

James Lawther is a middle-aged, middle manager.

To reach this highly elevated position he has worked in numerous industries, from supermarket retailing to tax collecting.  He has had several operational roles, including running the night shift in a frozen pea packing factory and carrying out operational research for a credit card company.

As you can see from his C.V. he has either a wealth of experience or is incapable of holding down a job.  If the latter is true this post isn’t worth a minute of your attention.

Unfortunately, the only way to find out is to read it and decide for yourself.

www.squawkpoint.com/

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