How companies make decisions

September 16, 2011 4:08 AM

I'm researching how the ways companies make decisions can help individuals make decisions. Can you think of examples of famous companies making a radical, transformative decision in the last 10 years?

e.g. Cisco choosing to move it's operations to China, or Coca Cola (damagingly) changing it's formula. I'm more interested in decisions with a positive outcome.
Any views on this whole issue (company decision-making vs individual decision-making) also welcome.

posted by Marzipan to society & culture (24 answers total)

Kodak.

Any other film manufacturer that survived the digital photography carnage. Am I on the right track?
posted by uncanny hengeman at 4:16 AM on September 16, 2011

I wouldn't say Kodak survived when they're barely in business.

Apple seems the most obvious positive choice.
posted by j03 at 4:37 AM on September 16, 2011

Ford is one of the few car companies that actually seem to have it together...
posted by j03 at 4:39 AM on September 16, 2011

I would think Google is a good example. They went from search only to doing everything under the sun. Apple with the phones. Sun maybe? Any of the big phone book companies. Amazon with the kindle and ebooks. Maybe any of the car companies.

A good example of a famous companies FAILING to make the decision, RIM and Borders.
posted by Blake at 4:41 AM on September 16, 2011

Here is an interesting article talking about Ford's business strategy
posted by j03 at 4:42 AM on September 16, 2011

Yes, definitely right track. I'm keen to find single points when a company changed/shifted strategy (probably against the prevailing wisdom)
posted by Marzipan at 4:59 AM on September 16, 2011

Sony.

Cashed up electronics company that started buying Hollywood.
posted by uncanny hengeman at 5:07 AM on September 16, 2011

It seems like Sprint is a good example of a company hemorrhaging customers finally deciding to take customer service seriously.
posted by 4ster at 5:22 AM on September 16, 2011

Nintendo, in introducing the Wii.
posted by Andrhia at 5:52 AM on September 16, 2011

Moneyball?
posted by cali59 at 6:00 AM on September 16, 2011

This is really a question about lessons an individual can learn by looking at how a group of individuals operating in a specific context ---wth a reasonably defined set of practices and relationdships make decisions.
posted by vitabellosi at 6:02 AM on September 16, 2011

IBM is a good example. It has shifted from a hardware business to a service/consulting-focused business. Key events were the PwC Consulting acquisition in 2002 and the sale of the PC business to Lenovo in 2005.
posted by mullacc at 6:17 AM on September 16, 2011

Yeah, I was going to say IBM. The story of Nintendo is also interesting: they started in the 19th century as a playing card company, but made a move to electronic toys and games in the 1960s. That seems pretty radical.
posted by AkzidenzGrotesk at 6:37 AM on September 16, 2011

Cashed up electronics company that started buying Hollywood.

I think that was more then 10 years ago and actually I think their obsession with DRM crippled their ability to make good hardware.
posted by delmoi at 6:50 AM on September 16, 2011

Blockbuster and their inability to handle Netflix and Redbox. In my readings they dismissed the popularity in streaming video, but once looked into creating their own cable channel. Unfortunately I am unable to find the article.
posted by BuffaloChickenWing at 6:56 AM on September 16, 2011

I second the Moneyball suggestion
posted by bfu at 7:13 AM on September 16, 2011

While Sega was originally a leader in the console wars, the Dreamcast couldn't compete in the marketplace past the Dreamcast and managed to pull themselves out of a financial nosedive by formally ceasing hardware development and concentrating strictly on software.
posted by griphus at 7:13 AM on September 16, 2011

...marketplace past the Dreamcast and Sega managed to pull...
posted by griphus at 7:14 AM on September 16, 2011

^3 for IBM. I can't think of a better decision on radical change and one that was successful at that. HP is now following suit 6 or 7 years after IBM.

Not a company, but the dumping of the Space Shuttle and heading back to rockets for manned flight could be considered radical.
posted by fluffycreature at 7:41 AM on September 16, 2011

In 2008, founding CEO Howard Schultz returned to his role as President and CEO of Starbucks after eight years off. The company was floundering and needed to be saved. One of his first actions was to close every Starbucks on the same day to retrain all the company's baristas. Whether that move was simply dramatics or actually a practical step, it did get people's attention. If you measure by stock price he has certainly been very successful.

Schultz has written about his return to Starbucks in a book, and spoken with Tavis Smiley about it. (Warning: that last link auto-plays the interview.)
posted by alms at 8:15 AM on September 16, 2011

The Art of the Long View, while rather old (published in the mid-90's), discusses scenario planning as a way to envision the future and devise business strategies that work under a variety of conditions.

Also Andy Grove, has written rather extensively of the decision to move Intel out of DRAMs into microprocessers in the book Only the Paranoid Survive which is all about what he calls "strategic inflection points" in business.

Finally, Clayton Christensen has written extensively about the failure of companies to adapt to new realities due to the fact that they have to satisfy their existing customers -- I recommend his first book, The Innovator's Dilemma.
posted by elmay at 8:38 AM on September 16, 2011

As j03 said above, Ford's decision to mortgage everything it had - including the trademark to the Blue Oval - in order to fund a complete turnaround before the credit crunch hit saved the company from bankruptcy. Not exactly sure how that helps individuals make decisions, but it's definitely a story in how singular corporate leadership - in this case, Allan Mullaly - can turn around a massive company. Also note Mullaly's focus on integrating Ford operations around the world, breaking down regional fiefdoms, and using global automotive platforms to massively reduce development cost and duplication. It's called the One Ford Strategy. We're beneficiaries of in in the 2012 Focus and again next year in the 2013 Ford Fusion - previously North America got a crappier version of the Focus while Europeans got a great one, and the Ford Mondeo and Ford Fusion were built on different platforms (which each cost hundreds of millions to develop), while next year they'll be built on a global mid-size car platform.

Again on the automotive side, there's GM's decision to build the Chevy Volt. They took a major risk by publically committing themselves to a hugely aggressive timetable and to technology that no one had ever made work before. It paid off; under the hood, it's probably the most techonogically advanced car on the road. And while the costs are high right now, the fundamental techonology gives people an ability to reduce their use of fossil fuels without giving up flexibility, something no other car has been able to do as well.
posted by Dasein at 10:32 AM on September 16, 2011

Cigarette companies are madly diversifying.

Some acquisitions and strategy changes are outside the "10 year rule" in the question, some are within. I just Wikied Philip Morris and Kraft Foods and my head is spinning. I don't know who owns what!

Delmoi is correct. Sony started buying Hollywood outside the "10 year rule" in the question. Sorry 'bout that. I can hear the ghosts of my grade 9 teachers now: READ THE QUESTION!
posted by uncanny hengeman at 8:37 PM on September 16, 2011

Wesfarmers, an absolute darling of the Australian Stock Exchange, started out about 100 years ago, buying stuff from farmers, such as wool and wheat, and pooling it for export [aka: a farmers' co-op].

Now it's Australia's largest employer, with massive retail interests such as groceries, stationery supplies, and hardware.

They also sell fossil fuels and insurance. As you do.

Plenty of acquisitions have happened within 10 years. A massive change in strategy.

Their HQ is in my home town! Even after they became PLAYAZ, they resisted the temptation to relocate to the financial hubs of Sydney or Melbourne. In fact, board members credit a lot of their recent success to staying in Dullsville.
posted by uncanny hengeman at 8:58 PM on September 16, 2011