Once-great companies drift due to leaders' styles

Why do so many large organizations lose steam and collapse under their own weight? John M McKee says it all starts with the boss.

 "I wonder if they're a one-trick pony? I mean, despite spending a huge amount of money on each of their many new product launches, they seem unable to make any significant headway in anything beyond their founding idea."

The person talking was Jim Ramo, former head of Movielink and before that one of the founders of DIRECTV.  Over lunch near his Malibu home, we were contemplating the state of several top organizations in the tech and entertainment sectors. He was commenting on the biggest.

In the tech manufacturing/development sectors, there are only a few companies that everyone knows. And when I say everyone, I don't just mean insiders, pundits, media types, or bankers. I'm talking about consumers and even people who have no interest in the products or services the companies provide.

This list isn't long: Google, Apple, Microsoft, Sony, Amazon. Perhaps it could also include Nintendo, Priceline, Samsung, Intel, or Blackberry (RIMM). But my point is this: Despite their size, most tech organizations are not brands that are commonly known by a wide spectrum of the population.

So it's worth looking at why a couple of once-great organizations are no longer great. I believe it has everything to do with leadership. Consider the following: 1. Microsoft — Once was the unquestionable king of the industry. When Bill Gates was the boss, everyone knew everything about what it was doing. Print news and TV articles heralded each new development and product. People across a wide swath of industries waited for Gates's pronouncements with bated breath.  Competitors seemed to be destined to follow companies like Wang computer and Lotus software in Microsoft's wake. Then Gates stepped back and Steve Ballmer took the lead in January 2000. Ever since, Microsoft has seemed incapable of creating the kind of great, exciting, newsworthy products it was known for. I mean the kind that helps an organization to grow more quickly — or gain the hearts and minds of new consumers. 2. Sony — For different reasons it, too, was once the most exciting organization to watch. When new products were launched, everyone from insider pundits to the chronically hip wanted them. It was the "Apple" of its time. Music devices, televisions, and many other electronic products made by Sony were always leading edge and premium quality. Then, in 2005, after a tough period of missed opportunities, Howard Stringer became the head honcho. Although the company is now in more business segments (such as movies and games) than in was during its heyday, it's clearly no longer the one to watch for newness, style leadership, or even leading-edge technology.

Leadership, at its best, elicits emotion. Great leaders inspire people to be great and do more. At its worst, leadership can be bureaucratic, pedantic, and selfish.

During demanding times, organizations look to the boss to help them get ahead of the curve. Bosses can do this in many ways of course; but one of the best ways is to focus everyone on those things that the company does best. And then do more of the same. This helps rebuild a company's reputation. It recreates the team's sense of pride; kind of, "We're going to show everyone that we can fix this situation and be great again." Pride, combined with some challenge, encourages everyone involved to go a little further each day.

But, for some leaders this can be hard. It can take time to show results.

Consequently many bosses take different approaches. Some will fix their eyes firmly on the stock market, planning to show investors "progress" by resorting to acquisitions or mergers. And, while this tactic may make the company bigger, it rarely makes their company as relevant or important again. Others go "internal." These CEOs spend their time trying to reduce costs, perhaps encouraging their engineers or developers to piggyback onto older products and push new efficiencies. These are the ones we see frequently on all the financial networks talking up efficiency.

But ultimately both approaches will do little to return the company to the top. It will be interesting to watch how the current leader, Google, now managed by Eric Schmidt more than the founders, will move into the future.


Leadership Coach


John M. McKee is the founder and CEO of, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

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