On disruption and why companies die

Didn’t have that much time to attend Sime Stockholm this year. However, one of the highlights that definitely made the hours spent worth it was Dr. Christian Sandström of Chalmers holding a keynote on disruption and why companies die.

How could you not attend it after having read this wonderful abstract:

“Enjoy a corporate autopsy with Dr. Christian Sandström, a PhD in why companies like Facit, Kodak (and maybe yours) were disrupted and died.”

Dr. Sandström, having done deep-dives into the old archives of Facit and its likes in the hunt for the management decision that turned them en-route straight towards the iceberg, presented five takeaways why big companies die:

  1. Big companies care about big markets – but everything new starts small
  2. Current competencies are rendered obsolete
  3. Current market control firms (making the shareholders happy short-term)
  4. Industry structure is altered (iPhone? Spotify? Uber? Airbnb? anyone?)
  5. Few incentives to transform markets – why disrupt a market you created yourself?

I do recognize battling quite a few of those over the years. What is interesting with all this is that, as Dr. Sandström also concluded, it’s not so much about the faulty decision, but rather about the lack of any decisions at all. To me meaning lack of a clear strategy.

Kodak didn’t see digital cameras coming? They actually invented the first digital camera (in 1975). But, the market was small, focus was on keeping the stock price up for the next report and thus the incentives to disrupt their own market weren’t there.

Skärmavbild 2015-11-24 kl. 00.22.03

A video recording of the speech is available here, starting about 35 mins into the stream.

Christoffer Vollmer

Leader, Consultant, Futurist & Advisor with more than 20 years experience from Strategy, Marketing, CX, Business Transformation & Tech.