The Self-Destructive Habits of Good Companies : And How to Break Them

Why Even Great Companies Fail: Diagnose the Symptoms and Cure Them!

• Conquer―or prevent―the seven disastrous “addictions” that can destroy your company
• Overcome corporate denial, arrogance, complacency, “competency dependence,” turf wars, and more
• For every executive, strategist, entrepreneur, and manager who wants to sustain success

GM. Ford. AT&T. Sears. Firestone. Krispy Kreme. Digital. Kodak. Once, they were riding high, the exemplars of business excellence. Then, disaster. Is your company headed for the same fate? How do you know? How do you change course? Find out. Shine a light on the dark places in your business. Uncover your self-destructive habits before they destroy you. The blinders, culture confl icts, and corporate denial. The competitive myopia. The focus on volume, not profits. Root them out―all of them. Then, instill the good habits your business needs: the habits of sustainable profitability and market leadership. This book shows you how―in detail, from start to finish.

Why do so many good companies engage in self-destructive behavior? This book identifies seven dangerous habits even well-run companies fall victim to–and helps you diagnose and break these habits before they destroy you. Through case studies from some of yesterday’s most widely praised corporate icons, you’ll learn how companies slip into “addiction” and slide off the rails...why some never turn around...and how others achieve powerful turnarounds, moving on to unprecedented levels of success. You’ll learn how an obsession with volume leads inexorably to rising costs and falling margins...how companies fall victim to denial, myth, ritual, and orthodoxy... how they start wasting vital energy on culture confl ict and turf wars...how they blind themselves to emerging competition...how they become arrogant, complacent, and far too dependent on their traditional competences. Most important, you’ll find specific, detailed techniques for “curing”–or, better yet, preventing–every one of these self-destructive habits.

• The “cocoon” of denial
  

• Find it, admit it, assess it, and escape it
• The stigma of arrogance
  Escape this fault that “breeds in a dark, closed room”
• The virus of complacency
  Six warning signs and five solutions
• The curse of incumbency
  Stop your core competencies from blinding you to new opportunities
• The threat of myopia
  Widen your view of your competitors–and the dangers they pose
• The obsession of volume
  Get beyond “rising volumes and shrinking margins”
• The territorial impulse
  Break down the silos, factions, fiefdoms, and ivory towers

Preface xxi

Foreword    xxiii                                                                            

1          Why Do Good Companies Go Bad?   1                           

2          Denial: The Cocoon of Myth, Ritual, and Orthodoxy      19  

3          Arrogance: Pride before the Fall    45

4          Complacency: Success Breeds Failure    75                        

5          Competency Dependence: The Curse of Incumbency    105      

6          Competitive Myopia: A Nearsighted View of Competition    133

7          Volume Obsession: Rising Costs and Falling Margins    165    

8          The Territorial Impulse: Culture Conflicts and Turf Wars    199   

9          The Best Cure is No Cure at All    231                                    

10        Endnotes    249                                                                    

Index    263

Dr. Jagdish N. Sheth is a world-recognized authority on global competition, strategic thinking, and customer relationship management. Dr. Sheth is Charles H. Kellstadt Chair of Marketing Strategy in the Goizueta Business School at Emory University. He has served as a distinguished faculty member at the University of Southern California, the University of Illinois, Columbia University, and the Massachusetts Institute of Technology. Dr. Sheth has published more than two dozen books and hundreds of research papers in different areas of marketing and business strategy; many are considered classics in their fields. His books include The Rule of Three: Surviving and Thriving in Competitive Markets and Tectonic Shift: The  Geoeconomic Realignment of Globalizing Markets (both co-authored with Rajendra S. Sisodia). With Banwari Mittal, he co-authored ValueSpace: Winning the Battle for Market Leadership. He also co-authored Clients for Life with Andrew Sobel. His latest book, Firms of Endearment: How World-Class Companies Profit from Passion and Purpose (Wharton School Publishing),  was co-authored with Rajendra Sisodia and David Wolfe.