Managing Your Company To Death 398
puppetman writes "This weeks I, Cringely is a frightening monologue on the plight of over-managed companies: VC's and professional managers who are looking to make a quick buck, even if it consigns the company to the rubbish heap. He praises companies like Oracle and Sun because the founder still runs the company, and is in touch with the core of the buisiness. He also makes an interesting aside about the founders of the Canadian company, Research in Motion (makers of the Blackberry) and their personal contribution of $120 million for research into particle physics, to illustrate what happens when technical expertise and business success can lead to."
Since you mentioned RIM... (Score:2, Informative)
Too bad that by percentage, I'm told they only bought the R.
Death imminent (Score:4, Informative)
Then the mother company, French, decided that they wanted to sell us. So, they set a goal for 100,000 customers by the end of the year. That's a lot of growth. Somewhere down the line, they even hired to consulting managers (*expensive*!) to guide tech support and the like.
The result is obviously guessed: The company is now nearly bankrupt, though a buyer has been found ("Look! Over 100,000 customers!"), and the layoffs have begun to keep the company afloat long enough for fresh capital.
They destroyed a perfectly functioning company that could have handled quite a bit of painless expansion, simply to increase its value for a sale. Can someone explain to me why this sort of thing would be good for the economy?
Re:Counter point - Balance shortterm/long term! (Score:2, Informative)
Re:Counter point - Balance shortterm/long term! (Score:3, Informative)
For some interesting insights on what makes for long-term success, take a look at the analysis in Jim Collins' book "Good to Great", which is based on an examination of almost 1500 companies over a period of years.
Remember...
"There is no reason for any individual to have a computer in their home".
(Ken Olson, President, Digital Equipment, 1977)
Stagnation can be an enemy, too. (Score:5, Informative)
How did that happen? Several factors: first, the third-generation family owners preferred to kick back and party rather than concentrate on the business. Even during the 1970s, the signs were showing. For a long time, they produced a line of lightweight [sheldonbrown.com], high-quality bikes in their Chicago plant, along with their heavier, mass-produced cousins like the Varsity [sheldonbrown.com]. However, the utterly failed to promote them, and they were easily mistaken for the low-end bikes.
Meanwhile, out in California, people were taking old heavyweight cruiser bikes and fitting them with derailleur gears, and the mountain bike was born. Schwinn basically ignored this trend until it was too late.
Also, labor strife reared its ugly head. The Chicago factory was unionized, and the United Auto Workers decided that Schwinn workers should be paid on the same scale as GM, Ford, and Chrysler workers. Management's response was to build a plant in Mississippi, which turned into a complete boondoggle. Production eventually was shifted over to the Far East.
Schwinn eventually went bankrupt, and the pieces were picked up by vulture capitalist Sam Zell. Eventually, the Zell-operated version of Schwinn went bankrupt again.
It was picked up by GT, went on for a few more years, and went Tango Uniform yet again.
Now it is in the hands of Pacific Cycle [pacific-cycle.com], a mass-marketer whose products grace the shelves of department stores.
The only member of the Schwinn family who is still in the bike business is Richard Schwinn, who owns Waterford [waterfordbikes.com], an ultra-high-end manufacturer located in Waterford, Wisconsin. The factory, once upon a time, built Schwinn's high-end Paramount line. What a pity he didn't have the resources to buy back the name.
Every time I see a "Schwinn" in Wal-Mart, it sets my teeth on edge.
Re:Anybody forgot to mention Microsoft? (Score:4, Informative)
Coca-Cola is a great example (Score:4, Informative)
Starbucks (Score:2, Informative)
AARGH. (Score:4, Informative)
*sigh*
Re:Anybody forgot to mention Microsoft? (Score:3, Informative)
According to Bill Parish [billparish.com.], CPA, it isn't [billparish.com.] and hasn't been for quite some time now.
Re:Borland? (Score:3, Informative)
There you have it. Borland has again a leadership. After its founder Kahn was sacked I don't remember for what offense, it went really bad. Even now they still can't get their act together with InterBase, but I digress.
Re:Much of this is because of the Stock Market (Score:3, Informative)
I was smart, and sold all my stock options as same day sales - thus avoiding AMT - but getting bent over by having been taxed as income.
I agree 100% that AMT is the most boneheaded idea, and actually discouraged people from buying and holding, and was largely responsible for the dotcom crash. Absolutely every person I know at my former place of employment had to do the same thing.
Fortunately, I had a few extra thou laying around, and when I left, I cashed in and bought a buttload of my options when the price had hit rock bottom, very near my option price. In a few years, these may be a nice addition to my retirement. Unless some other diabolical tax law is devised to fuck us all up the ass.
The Column was Plagiarized (Score:1, Informative)