The Death And Life Of Companies - InformationWeek

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7/25/2013
09:43 AM
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The Death And Life Of Companies

Why the aging effects of Big should compel companies to have kids.

There's an old parable about a poor husband and wife who have a baby girl, Yantra. They raise her with more love than money. So by the time she's a young woman, Yantra has real character -- forged in hardship and shaped by values.

A prince falls in love with Yantra, and on their wedding day he gives her parents a tiny fortune.

The parents decide to have another child, another Yantra. And they raise their second daughter from day one to prepare her for the next prince. She too is given abundant love and care, but now she is pampered because of their newfound wealth. And she's treated as an exception because of her ties to the future queen.

Other princes, especially those who have met Yantra, do come looking for a bride, but none of them wants to marry a princess.

OK, quick confession: I made that up. It might be a parable, but it's not old.

A friend who works at Infosys told me about how, back in 1995, it had joyfully spun off Yantra, a software company that was eventually acquired by Sterling Commerce, an IBM company.

When it was originally spun off, there was a ton of excitement and energy throughout Infosys. And the birth of that daughter began a decades-long transformation of the Infosys management team into the parents in my parable. It became regular practice to cordon off the internal teams doing the most interesting work, pampering them with the best of intent but unintentionally removing all the hardship that builds character.

Once you recognize that all meaningful growth -- whether for your child, employee or business -- comes from the right mix of support and challenge, your perspective changes. You start to see Infosys (as a metaphor for any company), and the fact that it's sitting on almost $4 billion in cash, not as a boon but as a disadvantage.

When your best and brightest live a luxurious, princely life, the balance between support and challenge is lost. That's the problem with incubation as a metaphor: It's about 100% support. No challenge.

And that probably contributes to why Infosys, with its well intentioned policies of business incubation and its white-glove treatment of its most innovative teams, is struggling; why there haven't been any Yantras of late.

The whole thing reminds me of an Internet meme attributed to fantasy/science fiction author Ursula K. Le Guin: "The creative adult is the child who survived."

The Next Evolutionary Step

The economic downturn after the financial crisis slowed the aggressive acquisition strategies of the prior two decades. But there are rumblings that the markets are preparing for another wave of mergers and acquisitions.

If you're a part of the Occupy Wall Street crowd, you finally have a reason to look up the word schadenfreude. All those big bad companies are unwittingly digging their own graves.

If you help manage Big, recognize that the corporation as a complex social organism still has some growing up to do. Take to heart Peter Senge's definition of leadership: the capacity of a community to shape its future. And then tap everyone, from the C-suite to the mailroom, to do everything you can collectively to drive your company to that next evolutionary step. Help it develop and refine its parental instincts and habits.

And then dim the lights, and put on some Barry White. Metaphorically.

Items from pills to power plants will soon generate billions of data points. How will this movement change your industry? Also in the new, all-digital Here Comes The Internet Of Things issue of InformationWeek: How IT can capitalize on the NSA's big data prowess. (Free registration required.)

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D. Henschen
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D. Henschen,
User Rank: Author
7/31/2013 | 2:01:26 PM
re: The Death And Life Of Companies
InformationWeek has timely, deep analysis on all of these companies with analysis of their recent results. They're all moving into fast-growing new markets (like big data and cloud) and they're doing what they can to make the most of markets that aren't growing. I have published many recent articles on IBM, SAP, HP and Oracle, but a comment window is not the place to post an article.
D. Henschen
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D. Henschen,
User Rank: Author
7/29/2013 | 3:43:59 PM
re: The Death And Life Of Companies
These are timely thoughts, indeed, as IT giants IBM, HP, Microsoft, Oracle and SAP are all struggling, in one way or another, with their next phase of growth and ways to transform their businesses for a new era.
Lorna Garey
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Lorna Garey,
User Rank: Author
7/29/2013 | 2:23:45 PM
re: The Death And Life Of Companies
So pampering your smart people/incubators is a bad idea. What kind of challenges do you recommend throwing at them? Limiting budget, making them deal with administrative BS?

Oh, and if you're smart enough to know OWS is a good idea, you know what schadenfreude means :-D
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