Thursday, June 16, 2011

Making Money is Killing Your Business--Reprise

IBM recently reported selling a milestone-worthy $100 billion in goods and services for its centennial. The CEO claims that IBM has endured because it's not focused on quarterly results, perhaps much to Wall Street's dismay. However, when you think about it, that's probably right. Thirty years ago, IBM was in a death-match with other nimble competitors: Wang, NCR, Sperry Univac, Burroughs, Compaq, Commodore, Xerox computers, Sun, Apple, Epson computers, NEC, Tandy, Dell, Olivetti, etc.  They were all big names then. Now you probably only recognize a few, and some of those are more known for other things. A few merged with others and became something else.

"The way to succeed is to double your error rate."--Thomas J. Watson Sr, IBM president that led to its substantial growth in the first half of the 20th century.

"Every time we've moved ahead in IBM, it was because someone was willing to take a chance, put his head on the block, and try something new."--Thomas J. Watson Sr.

If you're concerned with quarterly results to please your shareholders, you will not tolerate much of an error rate, nor will you take a chance. If you're concerned with leaving a legacy--a true legacy, not just one that grants you a multi-million dollar bonus--you will be concerned about future growth. You will develop people and you will take risks. (For a guide, see Chuck Blakeman's Making Money is Killing Your Business.)

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