Create bad habits and your bad habits will produce failure. It is only a matter of time.
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God Bless, Orrin Woodward. Jagdish Sheth outlines the seven self-destructive habits of good companies. Why do good companies go bad? A great many of them—including such stalwarts as Sears, Xerox, IBM, and Kodak—had faced serious hardships in the odd years since. Some of them recovered.
The Self-Destructive Habits of Good Companies: ...And How to Break Them
Some, as I write, are struggling mightily to recover. Some are dead or, in all likelihood, soon will be. So why do good companies go bad? This heartfelt and insightful question launched me on a journey of discovery. I started by conducting archival research on companies that had failed during the past several decades, interviewed people from some of the failed companies, and eventually came to the conclusions presented here. Although it is commonly believed that institutions are at least potentially immortal and humans are mortal, I found that the average life span of corporations is declining, even as that of humans is rising.
Others have come to similar conclusions. In the best-known work in this area, The Living Company, Arie de Geus found that one-third of the companies listed in the Fortune had vanished by , either through acquisition, merger, or being broken up. De Geus quoted a Dutch survey showing that the average corporate life expectancy in Japan and Europe was Another study found declining corporate life expectancy across the major European economies: from 45 to 18 years in Germany, from 13 to nine years in France, and from ten to four years in Great Britain.
Much of the decline in corporate life expectancy is the result of a heightened level of merger and acquisition activity in recent decades. However, most of this activity is due to distress selling rather than strategic buying because so many companies are in trouble. For very good reasons, they singled out certain companies as models of success—companies that, for very different reasons, have since fallen on hard times.
I am interested in what happened to them afterward—why they fell, why they failed, why they lost the magic touch. What happened? In my view, when companies rise to excellence, they often unwittingly develop self-destructive habits that eventually undermine their success. What Would Drucker Do Now? Rick Wartzman. World Changers.
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