We’ve all heard the warning, “The bigger they are, the harder they fall.” While this observation is generally attributed to former world heavyweight boxer Bob Fitzsimmons (1858-1917), it advances an ancient bit of wisdom. It is a cautionary bit of advice that modern companies would do well to heed.
Unfortunately, we have more than one fitting example of a large company falling hard. In the last 50 years, some of the world’s biggest companies have gone the way of the dinosaurs. We offer a few examples here in the hopes that history won’t repeat itself with your company, whether it is a budding enterprise or a blossoming global powerhouse.
Nokia and the Windows Phone
Anyone remember the Windows phone? Cue the crickets.
That’s the mistake Nokia made when it became obvious that its Symbian OS was becoming obsolete. Rather than get on board the Android OS train — fear of Samsung’s dominance was the reason given — Nokia went with Microsoft and the Windows platform for a smartphone.
Nokia’s Lumia 800 Windows phone hit the market in November 2011. By the middle of 2012, the company’s stock price fell from $40 to $2 per share. Nokia eventually fell into bankruptcy. Microsoft absorbed its devices and services business to become Microsoft Mobile in April 2014. Microsoft ended its Lumia smartphone series in December 2016.
Time Warner Merges With AOL
Fortune Magazine describes the merger of media giants AOL and Time Warner as “the worst merger of all time.” It seemed like a good idea at the time, though. Media monster Time Warner saw an opening into the online world by merging with AOL, which boasted tens of millions of subscribers.
A few months after the deal closed in 2002, AOL had to write off nearly $99 billion. That’s sure to leave a mark, regardless of the overall worth of any business.
Samsung Galaxy Note 7 Goes Up in Smoke
Samsung rolled out its dream smartphone, the Galaxy Note 7, in September 2016. And trouble started immediately. Batteries burning, phones causing fires, recalls — a nightmare for any company when a product literally crashes and burns.
Samsung took a massive hit to its brand name and its balance sheet (almost $17 billion) when the Note 7 went up in smoke. According to The New York Times, how quickly the company will emerge from this fiasco remains uncertain.
A Picture Is Worth a Thousand Words
Kodak declared bankruptcy in February 2012. The company that gave us the first automatic snapshot camera over 100 years earlier fell hard when the world changed, and they didn’t.
The world went digital and Kodak didn’t. That’s the bottom line.
When Chrysler Met Mercedes
Chrysler Corp. and Daimler-Benz AG stunned the world in 1998 with the announcement of their merger. This combined entity, named DaimlerChrysler AG, was the beginning of a new era in global industry. The cost for this remarkable joining was a mere $38 billion.
By 2007, the party was over. The merger dissolved in May of that year for an embarrassing $7.4 billion. Combining these two companies thrust together people of different languages, cultures and ideas about business with little to no courtship period before the marriage. The end result was not pretty.
The Bigger They Are
These examples aren’t meant to imply that a big business faces certain failure. The point is that everyone makes mistakes, and there are consequences when mistakes happen. The best we can do is remain focused and grounded while we move forward.
Most of these examples show that trying to do too much at one time, or refusing to do what obviously needs doing, can be the catalyst of disaster. Keep your business focused, on-task and organized; that’s how to prevent one of those hard falls.