What’s Killing Our Companies?

During the DevOps Leadership Series interview with the inventors of Lean Software Development, Tom and Mary Poppendieck, Tom made the observation that something is deeply unhealthy for modern business: they are dying off at an unprecedented rate. He referenced the giants of the species here in the states, the members of the Fortune 500.


Tom said:

… in the 1930s the average lifetime of a fortune 500 company was 60 years. Today, the average lifetime of a Fortune 500 company is 10 years. By the end of the decade, the trend line shows that it will be 6 years.


I think the answer to the post title is a bit nuanced but I’m (naturally) going to focus on a businesses’ relationship with IT. First, folks need to recognize that the modern corporation is in deep trouble. It comes from understanding that business means IT. You have no choice in the matter. As I’ve said many times, every company is an IT company, regardless of what business they think they are in.


In the software business, we often talk about agility. Part of this comes from the Agile Methodology which has so rapidly overtaken the development community and is generally a Good Thing. But it is also used in place of the word “flexible” and “adaptive” and both of those terms come straight out of biological systems where they refer to response to change and new demands. “Survival is not mandatory,” Deming pointed out. And he was referring to the modern company. That’s pre-Internet.


We often mistake business stories because they have a dollop of Internet accelerant in them. So let me provide an example that doesn’t, to make the picture totally clear.  When MCI introduced “friends & family plans” in the mid-90s, they crushed the market. They took billions of revenue away from AT&T and almost overnight became the market leader.

And AT&T didn’t respond for almost 2 years. Do you think AT&T executives and staff didn’t want to respond? They didn’t want to introduce their own F&F plan? Of course they did!


The problem was their IT couldn’t support that. And then, as now, if your IT can’t support something, your company isn’t doing it. And if your IT is rigid and non-responsive, when change comes — and it will come — what happens? Murder or suicide?


You need to manage your IT systems to respond in realtime to the real-world — that sprawling heterogeneous, multi-sourced technology environment that constitutes your company’s IT operations — otherwise whatever business you think you are in 5/be doomed.







These postings are my own and do not necessarily represent BMC's position, strategies, or opinion.

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