Technology companies encounter a "mid-life crisis": Apple and IBM become a model for survival (pictures)

Technology companies encounter a "mid-life crisis": Apple and IBM become a model for survival (pictures) No...

Continuous innovation is the decisive factor in IBM's century-old achievements, and it is also a valuable experience that other technology companies can learn from

Introduction: Foreign media wrote an article today saying that the world The "average lifespan" of a company is less than 40 years old. Therefore, if you want to survive in the long term and overcome this "mid-life crisis" in which business models are aging, innovation capabilities are declining, and companies are gradually getting into trouble, you must be brave enough to break through the status quo and follow industry development trends like Apple and IBM.

The following is the full text of the article:

The company does not live long

The company does not live long. In fact, according to a survey of more than 6 million companies conducted by management professors Charles Stubbart and Michael Knight, only a handful survive past 40 years. "Despite differences in size, financial status, and personnel composition, the average life span of companies is still less than that of the average American," they concluded.

Considering the rapid development of today's technology, even 40 years old seems to be a difficult number to achieve.

U.S. officials from Kodak, Blockbuster, Barnes & Noble and major record companies are paying attention to two questions: Can large companies innovate fast enough in an environment where life expectancy is rapidly decreasing? If so, what should be done?

Business leaders, academics and venture capitalists all say that large companies that can survive have a strong sense of change. The most successful businesses don't worry about cannibalizing their primary source of revenue by building new businesses. They frequently innovate, introduce new technologies, and open new markets. But the key is that these acquisitions are relatively small. In addition, the element of luck is also important.

Johnson & Johnson, founded in 1886, and IBM, which just celebrated its centenary, have far exceeded the average company lifespan of 40 years. As a more recent example, 35-year-old Apple has also transformed from a small PC manufacturer into a mobile device giant. Google, founded in 1998, is also exploring new avenues to find new sources of growth outside of the search advertising market.

On the other hand, companies defeated by "creative destruction" (both good and bad) often become highly bureaucratic, overly focused on defense, and lag behind in catching up with market trends by focusing on large-scale mergers and acquisitions.

James Breyer, a partner at the US venture capital firm Accel Partners and a director of Wal-Mart and Dell, said that the top executives of successful large companies are very similar to small businesses. He believes that these executives are smart and can focus on the company's core business while introducing new business.

He said that since Accel is still a shareholder of Facebook, someone once asked him what the difference is between the boards of directors of Facebook and Wal-Mart. He replied: "I see more similarities than differences between the executives of the two companies."

HP and IBM

The contrast between HP and IBM highlights this challenge. When Louis V. Gerstner took over as CEO of IBM, he wanted to know why the company continued to miss emerging industry trends. For example, IBM developed the first commercial router, but the market was ultimately dominated by Cisco. An internal study showed that IBM's success in mature markets made it difficult to expand into new areas and lacked the appropriate organizational structure to identify and build new projects.

Therefore, Gerstner launched a new program in 2000, requiring emerging business organizations to identify and cultivate growth opportunities under the guidance of top executives. According to a research report published in the Harvard Business Review in 2010, life sciences, Linux software and ubiquitous computing have increased IBM's revenue by more than $15 billion in the following five years.

Under the leadership of former CEO Samuel J. Palmisano, who stepped down at the end of 2011, IBM made up for its internal shortcomings through an aggressive mergers and acquisitions strategy, selecting dozens of small companies as acquisition targets and expanding its lucrative software and consulting businesses.

Meanwhile, Palmisano was not afraid to make tough choices: He sold the PC business in 2004, before PCs became fully commercialized. "The reason why we can live for 100 years is because we never limit our vision to one specific product." Palmisano said in an interview with the media last year.

In contrast, HP decided to expand its PC business and spent US$25 billion to acquire rival Compaq in 2002. As threats to the PC industry became increasingly clear, the company foolishly announced last year that it might sell its PC business, only to abandon the plan under investor pressure.

HP also started late in the business software market and spent a lot of money. When HP spent $11 billion to acquire British software company Autonomy last fall, many analysts believed the high price would hurt shareholder value. Rosabeth Kanter, a professor at Harvard Business School, said: "HP has been trying what IBM did five years ago."

Apple and Google

Apple's development in recent years has provided a good example of how to escape the innovation dilemma. After former CEO Steve Jobs returned to the company in the 1990s, he updated the PC line and established a dominant position in digital music with the iPod. But a few years later, he put both businesses at risk with the help of new products.

After launching the iPhone, Jobs began to cannibalize iPod sales. But the sacrifice was worth it: iPhones and related products contributed 39% of Apple's revenue in the quarter ended last September, making it a leader in the fast-growing mobile sector. Apple then took the risk of cannibalizing the PC and notebook business through the iPad computer, which currently contributes 24% of Apple's revenue.

Google is only 13 years old and still relies heavily on search advertising, but the company has begun to dominate new markets that threaten its dominance through modest acquisitions.

YouTube and Android are Google's two most well-known new businesses, and both were built through mergers and acquisitions. After acquiring these businesses, Google allowed them to operate independently and grow under the leadership of their founders. Google also announced last year that it would acquire Motorola Mobility for $12.5 billion. The deal is currently under review by regulators.

Todd Chaffee, general partner of the American venture capital firm Institutional Venture Partners, said: "There are many benefits to good M&A projects. If a company threatens Google's business, they will acquire it and then promote its development."

Although there are some effective survival paths, there is still another undeniable factor to bear in mind, and that is luck. "We all like to overestimate our abilities. In fact, luck plays an important role in the history of any investment or company development." Breyer said