Company Lifecycle?
I've been trying to wrap up two feature articles this week, as well as make my monthly visit to my Chicago office. Saw the president and executive vp of a company called Actio (http://www.actio.net yesterday. Interesting concept. Ever heard of MSDS sheets? These documents contain all the information you need to know about chemicals. If you are in manufacturing, you need one of these things for every chemical that you bring into the plant. Usually they are bound in three-ring binders. The process is cumbersome and manual.
Actio uses an ASP model in that they work with all the chemical manufacturers to obtain information needed for the MSDS sheets and maintain them in a database. Clients have access to the database in order to determine if the chemical should be used in the plant and if so then access for usage and safety information when it does appear. They're trying to automate and integrate the process with product development and purchasing. Very interesting.
My reading this week comes from Knowledge@Emory (http://knowledge.emory.edu/), a service of Emory University Goizueta Business School. The site requires registration. This article from Professor Jagdish Sheth http://knowledge.emory.edu/index.cfm?fa=viewArticle&ID=848 discusses the lifecycles of a company. I found it fascinating to think about the lifecycle of a company. Like Sheth, I grew up believing in the immortality of companies--especially big ones. Now that AT&T is potentially disappearing, it makes you think.
Sheth's research revealed that a typical corporate life span is about 14 1/2 years and declining. He cites mergers, acquisitions and Chapter 11 as prime reasons.
Then he looks at what makes successful companies eventually fail. He cites six externalities: regulation, capital markets, competition, technology, globalization and customers. Of these, he thinks the first three are more important.
His other point comes from the entrepreneurial to corporate transition. Although most, if not all, entrepreneurs like to think that they have discovered the Holy Grail of business smarts, often successful new companies get that way partly or largely due to luck. Leaders get fixated on what they believe was the one principle of success they discovered and fail to change with the times. Oops.
9:58:13 AM 
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