We make assumptions that it is the management team responsibility to extend or prolong the life of any companies even if they have fewer reasons to exist. Management is different from practicing medicine, although sometimes I am called the strategy doctor. Instead of wasting resources and energy to save a company or a brand, should we just take whatever assets and redeploy them In life, the cycle of life is the natural order of things.
Although we do live longer now death is inevitable. Technology is the same. Should corporations be the same? Saab is at the end of life and should it deserve a second life? Apple had its near death experiences and came back stronger. Many argued at that time Apple should be sold to Sony. Wang Computers thought they were beating IBM and become the next IBM. IBM was also that close to being disappeared from the scene just 15 years ago.
Management consultants usually have a keen preference in prolonging corporate life, I guess that keeps them spending. The pharma companies don’t want patients to die, just stay sick. Why do we care about extending the life of large companies or big brands? Is it because they can afford your fees? Or we have a love for them. Yes, build to last. Business schools love transformation stories because they make great business cases, portray CEOs as heroes. For many large companies, transformation and renewal is the only source of survival.
The world of fashion has a lot of come-back stories although they are generally not sophisticated from a management capability perspective compared to the GEs of the world. Think how Burberry, Addidas, Dior, Abercrombie & Fitch all have found prosperity in their new life. Many business school case studies have been written about how brands were “brought back from the graveyard.” Unfortunately, however, the lessons are often so idiosyncratic. There are 100X more cases where companies tried revitalizing old brands, hiring new CMOs and advertising agencies and throwing big money in advertising hoping to rebuild a great brand even when if there wasn't a relevant product or service or a sound business model behind it.
For those fashion companies, it is about hiring the right designer (call Tom Ford or Marc Jacob) and for other businesses, whom do you call? The designer often viewed as the critical component to reengineering a brand, and total attention must be paid to the brand in an effort to return to its essence and reason for being successful in the first place. It used to be case that you can recruit a top CMO and things will work out. This is not working anymore. You need a master strategist, a great storyteller and a change agent, all in one person (call Indra Nooyi or Steve Jobs). In fashion, you go back to the essence of the brand. In other business what do you do? How do you rediscover your core or find a new core?
Successful transformation and re-Invention rests on two major premises: first, that our time is characterized by a rare confluence of new behavior and economic disruption, and second, that the "new global reality" is turning toward a "whole new emphasis on innovation". I was speaking to a group of graduating Ivey MBAs on global strategy. You can check them out at slideshare on the bottom right. This is another post next week.