Planning, Startups, Stories

Tim Berry on business planning, starting and growing your business, and having a life in the meantime.

Do Big Tech Companies Become Too Big Not to Fail? 2

culture-eats-strategyI caught this one yesterday on Medium: Culture Eats Strategy for Breakfast. It’s by Dare Obasanjo on Hacker Daily (great title, by the way). It’s a well-thought-out discussion of how Google and Facebook culture achieved a substantial shift of strategy in a way that others (Blockbuster facing Netflix, and Blackberry facing iPhone) couldn’t. Here’s the summary.

“when your strategy changes then your entire organizational culture will have to change as well. Your organizational culture is defined by what positive behaviors you encourage and what negative behaviors you tolerate. Blackberry couldn’t compete with Apple when teams were still motivated & rewarded for keeping corporate CIOs happy and there was no way Blockbuster could compete with Netflix when they fundamentally saw themselves as a classic retail video rental store and ignored the power of online experiences.”

That’s a good read. Dare collected details and presents them very well. There are some stories of interest there.

And it challenges an assumption that I’ve made for decades now, which is that large businesses are doomed to fail eventually because they become like big ships, unable to turn quickly, unable to react. I’ve seen IBM fall from the “Big Blue” industry giant of the 1970s, 1980s, and 1990s to another also-ran today (no offense, IBM). I’ve seen Microsoft fall from the king of the world in the middle-to-late 1990s to struggling to keep up today.

It seems so hard for big tech companies to sustain growth rates when sales run into the billions. Although this post argues against it, I would have thought that Google, Apple, and Facebook will eventually slow down because they are so big. But maybe not.

I’ve never been an employee of a big (thousands of employees, maybe tens of thousands) company but I’ve deal with them as consulting clients. What I thought I saw was that as they grew, middle managers and office politics took over, regardless of what top management wanted. Decision making slowed to a crawl, and the friction through the chains of management became impossible. The culture changed in ways top management couldn’t prevent. Go to an exciting startup and people are working at all hours. Go to a big company and they left at five. Or so it seemed to me.

Can Google, Apple, or Facebook buck that history? Are big tech companies doomed to decline. Live by tech, die by tech? Do they become too big not to fail?

  • Kwasi Kodua Addai-Mensah

    How big was Enron (is spelling correct?)? If Enron was that big and it did fail, it sends a lesson to us all that big companies can fail. The cause(s) for failure of Enron can be applied to any company as well. This means that big companies have to be sure not to be offenders of these causes or else they risk failure. The issue about misreporting of financial data must be well handled by big companies or else it will spell their failure in the long run.

    Dr. Kwasi Kodua Addai-Mensah

    • Thanks Dr. Kodua Addai-Mensah. My intention was to focus on the phenomenon of big tech companies, as a subset of big companies. I suggest that it’s very hard for them to stay on top of the new waves of technology. This is aside from management and financial phenomena such as the ones you mention, which, of course, could also affect them.