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I feel like this pattern occurs in too many companies across all sectors: 1. Company is product-quality focused 2. Beats competition and creates mini-monopoly
by atleastoptimal 3y ago
I feel like this pattern occurs in too many companies across all sectors:
1. Company is product-quality focused
2. Beats competition and creates mini-monopoly
3. Sales becomes somewhat inelastic to changes in quality
4. This leads "cost-cutting" and marketing focused execs/decision making to beat out product quality execs/decision making
5. Company's product quality takes predictable linear path to the bottom
- vincent-manis 3y agoHewlett-Packard
- agumonkey 3y ago90s Apple ?
- Aeolun 3y agoI feel like this is ameliorated somewhat by having the original founder at the helm? Of course that’s not a guarantee either as they’re liable to take a few billion and run off into the sunset.
- sjfjsjdjwvwvc 3y agoEnshittification?
- rjbwork 3y agoSeems like if you do this over and over and over again under different brands - say on like a staggered Decade schedule - you optimize your profits, milking as much out of your market as possible while severely cutting cost and quality and competence.
- brazzy 3y agoCompletely different thing. The gist of the Boeing theory is that it was ruined by a finance-driven culture that resulted in cost-cutting away quality and safety. "Enshittification" is not based on cost-cutting or optimizing for profits. It's when a product that's already "perfect" and widely used, has lots of money/effort invested in it to chase further growth, and the changes end up making the product worse for its existing userbase.
- AdrianB1 3y agoIt is a bit more nuanced: 4.1 Company starts to talk about politics instead of products in their marketing campaigns 4.2 Company starts to cut cost on workforce by pushing out experienced people and hiring cheap newbies 4.3 As a result of the previous one, expertise drops rapidly and product quality starts to drop 4.4 As the product quality decreases, bleeding experienced people makes it impossible to stabilize 4.5 There is nobody left to innovate. The cafeteria manager is the best path to become an IT director (real case: 3 consecutive cafeteria managers in the same office were promoted as IT directors in one of these companies), so the best expertise the management has is to pick the right beverages for the automated vending machines in the office 4.6 Principles and values disappear, corruptions grows, while internal controls don't even bother to look into frauds less than $1 million per incident 4.7 stock price drops, even if the company continuously spends money on shares buybacks
- unethical_ban 3y ago4.1 doesn't follow from or lead to 3.x or 4.x
- AdrianB1 3y agoIt does. When you have nothing big to inovate to most products, you need to tell a story to keep the attention of the customers. This is where 4.1 comes into the picture. When 4.1 changes the direction into politics, you start doing it internally. That leads to the next points.
- astrange 3y agoDoes Boeing have marketing campaigns? They're B2B.
- hilux 3y agoBoeing, like many B2B companies, is B2B2C. They may not sell directly to the public, but they have a public brand. (Unlike Spirit AeroSystems.) And therefore, B2B companies run ads, e.g. to sway public opinion on government policies, or (now) to restore flyer confidence in their product. If US airlines get enough emails and letters from customers saying "I'll never fly a 737 MAX again!", that gives the airlines huge negotiating leverage against Boeing.
- Litost 3y agoNormalisation of Deviance? https://www.youtube.com/watch?v=Ljzj9Msli5o https://www.youtube.com/watch?v=Ljzj9Msli5o
- interroboink 3y agoPerhaps another take on this: Hard times create strong people strong people create good times good times create weak people weak people create hard times Obviously that's not some magic rule or anything, but people shape their surroundings, then the surroundings shape their people. When played out across generations (or multiple phases of ownership at a company, as in your comment), cycles often form.
- GeekyBear 3y ago> “I have my own theory about why decline happens at companies,” Jobs told me: They make some great products, but then the sales and marketing people take over the company, because they are the ones who can juice up profits. “When the sales guys run the company, the product guys don’t matter so much, and a lot of them just turn off. It happened at Apple when Sculley came in, which was my fault, and it happened when Ballmer took over at Microsoft.” https://hbr.org/2012/04/the-real-leadership-lessons-of-steve-jobs https://hbr.org/2012/04/the-real-leadership-lessons-of-steve...
- aslatter 3y agoI keep this clip open in a browser tab so I can go back to it from time-to-time: https://www.youtube.com/watch?v=X3NASGb5m8s https://www.youtube.com/watch?v=X3NASGb5m8s It's the same basic message from Jobs, but this time about Xerox.
- RVuRnvbM2e 3y agoWow. I had not seen this clip before. What an insightful couple of minutes. Thanks for sharing!
- arcfour 3y agoHow does this apply to e.g. the Bell System? From what I understand, their network was overengineered and they generally put out a very high quality product, and didn't need to do a lot of marketing.
- deleted 3y ago[deleted]
- bronson 3y agoThey put out a high quality, overengineered, extremely expensive product that, by government mandate, had no competition. After deregulation it was clear that customers wanted a little less quality for a lot less money.
- 3y ago
- lmm 3y agoReputation is an asset like anything else. It's probably economically rational to build up a reputation for good quality while you're small, and then switch to extracting as much value as you can from that reputation once you've gotten big. (I don't like it but I don't see any way to prevent it being the most profitable course)
- GeekyBear 3y agoIt's also possible to optimize for long term profitability. > There were certain things about the business where it was obvious – speaking to people who had been on that journey for 25 years before I joined – that they were not likely to change in the future because they hadn’t changed in the previous 25 years. The first thing that struck me was an absolutely rock-solid commitment to gaining the trust of the customer, the employees, the suppliers and business partners. Almost every rule or method or procedure of the company was built around ensuring that. https://inpractise.com/articles/aldi-culture-and-operations-of-a-hard-discounter https://inpractise.com/articles/aldi-culture-and-operations-...
- lmm 3y agoIf you're in a stable business like groceries where you can be confident that your market will still be around in 25 years, sure. But that doesn't apply to a lot of businesses.
- im_down_w_otp 3y agoSave for perhaps the development of transporter technology or an unending deluge of viral pandemics, making airplanes for commercial aviation seems fairly predictable as to whether or not it'll exist in 25 years.
- jethro_tell 3y agoTo some extent, but your airplane customer has quite a bit more flexibility than a grocery customer. I'm probably not going to buy French perishables but an airbus is a different story.
- hilux 3y agoI don't follow your logical jump from (3) to (4). Cost-cutting is always unpleasant, and never done just for fun. Typically companies cut costs when they're feeling squeezed, i.e. they have to. A company with a "mini monopoly" would not feel squeezed - quite the opposite.