Do You Want to Live Forever?
- June 12, 2011
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The Economist, a venerable institution in its own right, posts a fascinating article about IBM’s 100 years:
IT IS not, by any means, the world’s oldest company. There are Japanese hotels dating back to the 8th century, German breweries that hail from the 11th and an Italian bank with roots in the 15th. What is unusual about IBM, which celebrates its 100th birthday next week, is that it has been so successful for so long in the fast-moving field of technology. How has it done it?
So really. What is the secret? I think the Economist has a good handle on the answer:
IBM’s secret is that it is built around an idea that transcends any particular product or technology. Its strategy is to package technology for use by businesses.
This partly explains why IBM and Caterpillar have had an 80-year partnership. But the Economist takes it a step further and asks the question – who else has an elegant organizing principle and products that are meeting success in the marketplace?
No surprise as to the first answer:
The most obvious example is Apple (founded in 1976). Like IBM, it had a near-death experience in the 1990s, and it is dangerously dependent on its founder, Steve Jobs. But it has a powerful organising idea: take the latest technology, package it in a simple, elegant form and sell it at a premium price. Apple has done this with personal computers, music players, smartphones and tablet computers, and is now moving into cloud-based services (see article). Each time it has grabbed an existing technology and produced an easier-to-use and prettier version than anyone else. This approach can be applied to whatever technology is flavour of the month: Apple has already shifted from PCs to mobile devices.
It also doesn’t hurt that Apple is nearly halfway to the 100-year mark already… But the Economist posits that Amazon and Facebook have similar organizing principles (make it easy to buy stuff, and make it easy to share stuff). This theory also helps explain why a company like Dell can be so dominant during a long phase of the IT cycle, but has trouble adapting when its business model innovations finally get adopted by the market in general.
So… what is your firm’s organizing principle?