corporate euthanasia


While I’ve been working on getting the most recent episode out, I’ve been listening to and enjoying the most recent episode of @monkbent‘s podcast. It’s all about Y Kant Tori Read Why Can’t Corporations Innovate?

They go back and forth on this issue, touching a lot on Microsoft, and questioning why it’s just so darn hard for companies to live past their initial burst of innovation. Also, why should they?

But they dance around a basic question that immediately popped into my head, which is:

Why isn’t there an established framework for corporate euthanasia?

If corporations are “people” why should we expect them to be immortal?

And God knows, I don’t use that phrasing to provoke any sort of larger political debate about Supreme Court decisions or the like!

Just simply: why should we obsess over corporations reinventing themselves, staying ahead of the new, young innovators nipping at their heels?

Why is this the theoretical framework?

Aside from the arguments about corporations being institutions that communities coalesce around, isn’t there an alternate way of looking at the world where we assume IT JUST IS the natural lifespan of a corporation or company to burst into the world in a blaze of innovation, do one thing really really well, and then sort of fade into irrelevance and eventual terminal decline? Obviously, like people, some would do this more gracefully than others, and some would delay the inevitable longer than others, but the question remains the same.

In other words, yes, the Kodak plant closes after 70 years or so… but everyone knows that going in, expects it, and that’s what we all plan for.

In other, other words, at least theoretically speaking:

Can a case be made for corporate euthanasia?

A corporation innovates. A great idea is great. There probably won’t be another great idea, so we milk the most out of that one good one, and then we just peace-out, after a respectable period of time.

A bunch of of related thoughts spring from this/maybe come from the same place as this question?

  • What is the “natural” lifespan of a corporation? Why does every corporation think it will live forever?
  • What is the average lifespan of a corporation?
  • How many of the original fortune 500 are still around?
  • The only companies that really last centuries are oil companies and consumer staples like Procter and Gamble. Why should anyone else even try?
  • Heck, how was the British East India Company finally unwound?!!
  • It always bugs me with tech companies that they can’t just do what they do best. They always try to keep up with the cool kids, LCD Soundsystem style. Facebook wants to be a messaging app. Google wants to be a social network. Microsoft wanted to be Google/Apple/AOL and meanwhile they stopped being a SOFTWARE company for chrissakes!
  • Maybe it’s a generational thing. All the baby boomers, the Gates and Jobs-era folk all grew up in awe of IBM, saw what happened to them and inculcated a mortal fear of mortality. Kind of like all baby boomers, in a way. 🙂

My fundamental question is:

Isn’t it more efficient to let companies die a dignified death?

Instead of asking them to try to stay hip and just end up embarrassing themselves like some 60 year old with a sports car and a trophy wife? How much money is poured down the drain struggling for companies to remain relevant? What if there was an orderly way to wind companies down, and this was an accepted practice?

I mean, we say we believe in innovation and disruption theory and creative destruction… so why can’t we take this to a logical conclusion? It seems to me that creative destruction is embraced philosophically, but not actually in practice… not in our hearts. Somehow, every startup that creates a great corporation truly believes it can be immortal.

I’m not saying we should necessarily have a process for euthanizing companies after their innovative usefulness has ended, but just as a thought experiment, wouldn’t that be more efficient overall?