Creative Destruction: Why Companies That Are Built to Last Underperform the Market--And How to Success fully Transform Them by Richard Foster & Sarah Kaplan

Author:Richard Foster & Sarah Kaplan [Foster, Richard]
Language: eng
Format: mobi, epub
ISBN: 9780307779311
Publisher: Crown Publishing Group
Published: 2011-04-19T14:00:00+00:00

CORPORATE EXAMPLES

None of the public equity firms we have examined in the McKinsey Corporate Performance Database “found the secret” of creative destruction. None has outperformed the market, or demonstrated excellence relative to the overall market over the long haul. As described previously, there are companies such as Enron and Corning that are beginning to demonstrate that they too can adopt some of the mechanisms of private equity investors for the benefit for their shareholders. And there are some diversified corporations that have done much better than most. GE and J&J are perhaps the two best examples. We discuss J&J in Chapter 11. Now we turn our attention to GE.

In a June 1999 interview in The Wall Street Journal, GE CEO Jack Welch philosophically observed:

I’ve talked about all the disadvantages of working at a big company, but there are a lot of advantages to being huge. Last year we made 108 acquisitions for $21 billion. That’s 108 swings. Every one of those acquisitions had a perfect plan, but we know 20 or 30 percent will blow up in our face. A small company can only make one or two bets or they go out of business. But we can afford to make lots more mistakes, and, in fact, we have to throw more things at the walls. The big companies that get into trouble are those that try to manage their size instead of experimenting with it.

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.