Your observations?
When a company becomes successful, salaries increase and company reputation improves.
This obviously increases the incentives to get into the company, which in theory should be good: more people want to work there, so the company has more options to choose employees from.
But this pay and reputation increase disproportionally attracts the kind of people that don't really care about doing a good job or creating an exceptional product, but only care about the money and status.
If the company lets these people in, they will slowly destroy the culture that made the company succesful in the first place. The general feeling goes from "how do I contribute to the company creating the best product ever?" into "how do I get a promotion as fast as possible?"
But that's just my personal hypothesis that isn't supported by hard data.
When you're on the quarter to quarter results rat-in-a-wheel cycle it's easy to forget about the future.
As the product pipeline dries up, shareholders pull back. Leadership either doubles down on the short term to win back shareholder trust (and further neglects the future) and/or leadership is limited in new directions as share prices drop.
Rinse. Repeat.
Live by the shareholder sword, die by the shareholder sword.
Therefore big companies don’t just fail because of the size, they usually fail when market changes significantly and they can’t adapt (kodak is a perfect example). Some though manage to fail even before that (because people), and some are able to survive market shifts (luck, some good people still around etc, enough money and monentum to fly through turbulence etc).
Kodak got hit again when the smartphone launched. They carved out a ok niche as having some easy to use digital cameras, and the disposables were still semi-popular, but the smartphone effectively killed the point and shoot camera.
They had time to pivot in many directions, and failed to do so in any meaningful way. It’s a good idea to make sure a business has a clear vision that isn’t dependent on a technology, so it can evolve over time. If instead of film, Kodak focused on something like, “capturing memories.” That leaves a wider door open for digital cameras, video, smartphones (or partnerships/licensing), printers (which they do), but even into cloud services and software. Cloud storage, photo management, sharing, etc. Humans have always had a desire to capture memories, so the vision would never die, just change formats. From etchings on a cave wall to photorealistic 3D printers of today. They don’t even have to limit themselves to visual media either. But they got stuck on film, it is what it is.
1. The decision process (and culture) that helped a product/company reach a big scale is basically saying no to any real innovation
2. Disruptive innovation is hard to identify because initially looks more like a failure according to the metrics/criteria from point 1 so it is ignored until it is too late.
I would add here a third point (not from the book but more a personal observation): When a company reaches a big success founders most probably evolved personally with the company. They created the company but also the success of the company created them. To innovate means also for founders to disrupt their own lives, world views at a more fundamental level. And as in most cases this is hard because they lived that company life eveyday.
Sometimes, a company will start taking its position for granted and start optimizing for profitability at the cost of customer satisfaction. They assume their position is secure, while it actually isn't, and then they are dethroned.
Other times some bad but reasonable enough decisions turned out not to work so well.
I don't know where you live, but around you how many companies do you see that have lasted 5 years? 10? 50? 100? 1000?
Even countries have definite timespans.
Intel has already lasted for more than 50 years (and its demise is not imminent). This is a remarkable achievement for a technologu company.
Kodak is a different and sad case. There are so many think-pieces on why they failed, but this one captures it well, by comparing them to their peer Fujifilm (which didn't fail): https://petapixel.com/why-kodak-died-and-fujifilm-thrived-a-... TLDR - Fujifilm quickly (over 10 years) diversified out of the photography business, while Kodak lingered. Digital photography was never going to replace the empire they had in film - the core photography business was fundamentally doomed, and the senior execs didn't make enough changes quickly enough.
As a counter-example to Kodak, look at IBM, which has reinvented itself several times and is now basically a software service company. IBM successfully pivoted away from failing core businesses and has kept on going (although talking to former IBMers, it was hardly a smooth ride...) You could say IBM failed several times too - but like Fujifilm, it managed to morph into new businesses so the ticker at least stayed the same.
in the case of kodak, their cameras were simply worse than competitor's cameras. either kodak must die, or it must kill parts of its current product and make a better product. to give a biological analogy, it would have to cut off a limb and regrow the limb to stay viable. it's very complicated and risky to do that kind of surgery
Sales and marketing were the main groups who could impact the company's bottom line. So those were the folks that got promoted and pushed to the top. When they lead the company, they don't focus on products+innovation. Because they failed to innovate (or capitalize on their innovation - e.g. their gui) competitors did (e.g. apple).
They fail to make great products.
See https://www.youtube.com/watch?v=NlBjNmXvqIM (I recommend watching this, its short!)
Cheers, M
At small scales (up to maybe 10 employees) the individual performance of employees is fairly directly tied to their compensation. If they do well, the company does well, and they get paid because of that. Even a single employee doing zero productive work can be such a drain on profitability that it can make or break the entire company. Hence, everyone has to contribute to the productivity in a positive way.
As companies grow through medium size (100-1000 staff), the employees can get away with being unproductive or even counterproductive. This is because efficiencies of scale start to materialise in a big way, compensating for even a fairly large subset of employees basically doing nothing useful. That merely decreases profitability to just 10-20% instead of the 60% that ought to be possible, which isn't catastrophic by itself, hence it is allowed to persist.
As companies grow past 10K staff and the decades go past, the real enshittification begins. More and more managers at increasingly senior levels are now there purely to convert "the commons" (the communal value of the company, such as customer goodwill) into personal profit. For example, a hypothetical company that has the motto "Do No Evil" might have a manager attain promotion to higher ranks through a just a bit of evil. This is basically "cheating", which works, so they get promoted. They're a senior manager now. Rinse and repeat until all senior managers obtained their position and power over the organisation this way. Now the entire organisation is evil because everyone making the decisions is a self-interested cheater instead of a hard-working product builder.
This is how you get ads in the start menu of an operating system you paid for. That got one guy a promotion, at the expense of a trillion dollar business.
You, the customer, will now seriously start considering switching to a different operating system, along with millions and then eventually billions of other similarly upset customers. All because of one guy. One! Eeeexcept... it's never just one person. It's now every manager doing the same kind of self-interested evil thing, destroying the product through a million tiny cuts. That's the tragedy of the commons: "We all just have one cow, what's the problem? Oh everyone's cow fed there and now there's no more grass. Oops!"