The causes of business demise—of a failure to endure—are well documented at a general level. They include failure to address changes in market demand or competition effectively; human failings such as hubris, exhaustion, or loss of ambition; loss of operational competitiveness; and above all an inability to deal with new, often disruptive, technological innovations. And sometimes, of course, external factors outside a company’s control, such as natural disasters, intervene.
Perhaps less commented upon is the challenge presented by legacy assets and legacy mind-sets. A failure to adapt to seismic change (whether customer or technology driven) is, I have found, rarely caused by intellectual oversights or an inability to grasp what is happening. More often, the culprit is an inability to escape from a successful past and to accept the huge financial and human costs of responding effectively. […] In this sense […] creative destruction as a managerial concept can be most effective when applied within an organization.
Author: Ian Davis
Source: McKinsey Quarterly
Subjects: Business Rules, Management, Organizational Behavior, Strategy