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The Making It! Business Blog

from Executive Producer, Nelson Davis

"The world would be a better place if it operated on sound business principles"

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TOO BIG TO SUCCEED

Thursday, Dec. 11, 2008

Over the past couple of months, economic news headlines have frequently been punctuated by the phrase “Too Big to Fail” when referring to several giant publicly traded companies being considered for rescue by the federal government. From my small business advocacy point of view, I’ve long seen some of those behemoths as being just the opposite, which is way too big to survive and succeed.

Occasionally I enjoy picking up an old (as in pre-1950) National Geographic, Fortune, or Life magazine to look at the ads. I see the names of some of America’s once great brands and companies that didn’t survive the past sixty to eighty years and I always ask myself why. Those that disappeared seem to fall in to three basic categories; the demand for their products dried up, they were badly managed or a smart competitor came along and ate their lunch. Another “death process” is that they were absorbed in a merger and neglected until they disappeared.

Businesses, like people evolve, serve a purpose during a lifetime and pass away at various ages and for a variety of reasons. Let’s have a glimpse at what history tells us. When Charles Dow created the Dow Jones Industrial Average, first published on May 26, 1896, it consisted of a dozen stocks.

Company

What Became of It

American Cotton Oil

Distant ancestor of Bestfoods

American Sugar

Evolved into Amstar Holdings

American Tobacco

Broken up in 1911 antitrust action

Chicago Gas

Absorbed by Peoples Gas, 1897

Distilling & Cattle Feeding

Whiskey trust evolved into Millennium Chemical

General Electric

Going strong and still in the DJIA

Laclede Gas

Active, removed from DJIA in 1899

National Lead

Today's NL Industries removed from DJIA in 1916

North American

Utility combine broken up in 1940s

Tennessee Coal & Iron

Absorbed by U.S. Steel in 1907

U.S. Leather (preferred)

Dissolved in 1952

U.S. Rubber

Became Uniroyal, now part of Michelin

As you notice, all the products they made or distributed are still available in the marketplace but except for General Electric (GE) their names might as well be lost in the Bermuda Triangle.

Another of my common sense economic theories is based on what I know about the lives of dinosaurs. Nobody seems to be sure why they disappeared but perhaps the largest creature to ever walk the earth was a dinosaur in the sauropod family. Estimates were that they were larger even than Blue Whales at over 103 feet in length and topping 175 tons in weight! My country boy idea is that those giants were of a size that about all they could do eventually was eat, eliminate, sleep and defend themselves. Today America has a number of old and well recognized companies that are literally lumbering dinosaurs and who are facing a similar fate. But someone has convinced the folks on Capitol Hill that the world we’ve known and generally loved would disappear instantly if one of the big three auto companies ceased to exist. The truth is that one or more of them will likely die sooner or later regardless of rescue efforts.

Even in the world of business development, there are invisible lines on the calendar that denote eras. History has proven that in chaos there is opportunity and since small businesses are always hungry and generally nimble enough to quickly adapt to the marketplace, this crazy time could become known as the small business era. Ten years from now some large company you do business with right now will be dinosaur bones and some enterprise that is a very small dot on the horizon will offer something that you feel you can’t live without. In the Bhagavad Gita it is written “For certain is death for the born and certain is birth for the dead; Therefore over the inevitable thou should not grieve”

During the past week I’ve spoken with a number of small business owners including several at a business growth event sponsored by Entrepreneur Magazine and UPS Stores. While not blind to the challenges being presented to businesses of every size, the people I’ve spoken to have been universally upbeat and positive about their prospects. One of the speakers at yesterday’s event in Long Beach California was Barry Farber, an entrepreneur and sales trainer. He reminded us that the simple secret of success consists of only six words; you become what you think about. That wise line was coined by the late Earl Nightingale and forty-six years prior to “The Secret” was the central thought of his recording, “The Strangest Secret.” But Farber had a profound sales question of his own which is “Is there anything that I’m not doing that could serve you better?” Somewhere along the line, too many of America’s great companies stopped asking that question of their customers. They became large, arrogant, greedy and Wall Street obsessed. Too many of those companies went from an obsession about serving real customers to simply focusing on serving themselves which in the long term is a guaranteed path to the bone yard.

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