December 16, 2010 By Andy Blumenthal
“We are living in a material world, and I am a material girl.” — Madonna
For some people, like Madonna, the “material world” represents a society where people must pay to get their way. To me it means the mortal world, where we are born, live, try to thrive and ultimately pass the baton to others.
Mortality isn’t limited to human beings, but is also a property of organizations. Several articles have appeared about it lately in mainstream and IT publications. Industry analysts are looking to Microsoft and Google and wondering how they, like other technology organizations, will master the competency of, as Computerworld puts it, “Getting to next.”
A curious irony runs throughout these conversations. Microsoft and Google are seemingly on top of their respective games, dominating the market and earning tens of billions in revenue per year. Despite being at the pinnacle of the technology industry, various industry watchers have noticed, they appear unable to see what’s the next rung on their ladder. It’s almost like they’re dumbfounded that nobody has placed it in front of them.
Consider, for example, that Microsoft dominates desktop operating systems, with approximately a 90 percent share of the market, business productivity suites at 80 percent and browser software at 60 percent. Google similarly dominates Internet search at about 64 percent.
Everyone is asking: Why can’t these companies find their next great act? Microsoft launched the Kin and dropped it after less than two months; Bing has a fraction of Google’s market share in search; and Windows Mobile never became a major player as an operating system. Further, as The Wall Street Journal pointed out, the Xbox video game system, though finally profitable, Microsoft will likely never recoup the initial investment in research and development.
Similarly Google gambled by acquiring the ad network DoubleClick in 2007 for $3.1 billion, YouTube in 2006 for $1.6 billion and the mobile ad platform AdMob in 2009 for $750 million. But so far, as Fortune noted, Google hasn’t seen significant benefit from these purchases in terms of diversifying its revenue stream. “The day is coming when … the activity known as ‘Googling’ no longer will be at the center of our online lives. Then what?” said The Wall Street Journal.
From the perspective of organizational behavior, there’s a natural law at work here that explains why these resource-rich companies, which have the brains and brawn to repeatedly reinvent themselves, are in apparent decline. All organizations, like all people and natural organisms, have a natural life cycle — birth, growth, maturity, decline and death.
To stay competitive and on top of our game, we constantly must plan our strategy and tactics to move into the future. However, organizations, like people, are mortal. Some challenges are part of life’s natural ups and downs. Others tell us we are in a decline that cannot be reversed. At that point, the organization must make decisions that are consonant with the reality of its situation, salvage what it can and return to the shareholders what it can’t.
In other words, eventually every organism will cease to exist in its current form. During its life cycle, it can reinvent itself like IBM did in the 1990s. And when reinvention is no longer an option, it goes the way of Polaroid.
This is similar to technology itself. As a new technology emerges, time and effort is spent further developing it to full capacity. We optimize and integrate it into our lives and fix it when it’s broken. But there comes a time when horses and buggies are no longer needed, and it’s time to face the facts and move on to cars — and one day, who knows, space scooters?
Going back full circle to the human analogy: People can reinvent themselves by going back to school, changing careers, perhaps remarrying and so on. But eventually we all go gray. And that’s fine; that’s the way it should be. Let’s reinvent ourselves while we can. And when we can’t, let’s accept our mortality graciously and be joyful for the great things that we have done.
Andy Blumenthal is the CTO of the Bureau of Alcohol, Tobacco, Firearms and Explosives. A regular speaker and published author, Blumenthal blogs at The Total CIO. Blumenthal’s views are his own and do not represent those of any agency. This column does not represent an assessment of Microsoft, Google or any other organization.
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