Monday, January 19, 2009

Too Late!

So many smart people become cogs in the giant machinery of corporate America.

Fortune 500 companies. The dream jobs college grads seek out. Lead by captains of industry. Household names. Licenses to print money. Fountains of opportunity. Places that would make parents proud.

Until one day, they don't (make anyone proud). They hit a point where they've lost their way. They've lost that raison d'etre, other than purely to make a buck. They become complacent. And they miss the next big opportunity, because they don't understand it and they can't justify it. New competitors show up, small at first, but increasingly relevant...

Then they try to catch up, but they just can't.
It's too late. And the aftermath is ugly, and sad. Especially for stockholders.

Just check out the North American auto industry right now. Who needs to invest in more efficient vehicles? Or check out the media conglomerates. Record labels, Newspapers....Who needs to invest in digital media? Online commerce? Broadband? You can't read the news without seeing the current generation of failures, who clearly have been living on borrowed time.

Lot's of smart people at those companies. Lot's of opportunities to choose. Take a leap, invest in the next wave. Likely a lot of focus on the quarter at hand, corporate IRRs and hurdle rates, resulting in more of the same. Until one day...

It's too late.

And the forces against you are just too great.
And you're GM, or Nortel, or Borders...
And you wonder how you got to where you are.

It's a sad story, but it gets told over and over again. Few companies escape the strength of their own gravitational field, growing bigger, slower, denser, eventualy collapsing under their own weight. I just read an article about Andy Grove's view of Silicon Valley, and it reminded me about Intel's own decisions to bet the company - twice. Irresponsible or Brilliant, they took a leap and got behind it.

This crazy market is forcing a lot of companies into very uncomfortable positions. No lines of credit, debt facilities going away, no one willing to take counter-party risk. If it's as bad as i keep hearing, I suspect we'll see the beginning of the end of a lot of other corporate giants who just have made the wrong choices.

And for them, it will be too late.

Is your company investing in the right things?
I hope it's not too late for you,