I often start my seminars on business transformation by discussing why innovation is not an option, but rather an imperative for any company, - no matter how big, powerful and successful. Failure to innovate will invariably get a company into serious trouble, perhaps even impacting its ability to survive into the future, especially in times of rapid change and fierce competition. To bring the innovation imperative to life with a concrete example, I use the IBM near-death experience that I lived through in the early 1990s.
I illustrate IBM’s rapid decline by first showing a Fortune cover from 1985 about America’s most admired corporation based on Fortune’s yearly survey of company reputations. IBM was then at the very top. But, by the early 1990s, the picture had drastically changed. This is graphically shown in a Fortune cover and article from May 3, 1993: “Dinosaurs? They were a trio of the biggest, most fearsome companies on earth. Here's how earnest executives managed them into historic decline.” The hapless dinosaurs were IBM, Sears and . . . General Motors.
I was reminded of this 1993 article when reading about GM’s declaration of bankruptcy on June 1. Luckily for IBM, after hitting bottom the company took the necessary actions and was able to successfully reinvent itself. Not only was IBM able to survive, but it once more attained a leadership position in the IT industry. The experience was very painful, even humiliating for those of us who went through it. But at least it was relatively short and was followed a few years later by a very sweet redemption, including this 1999 Fortune article IBM: From Big Blue Dinosaur To E-Business Animal.