How Companies Avoid Success | Automation.com

How Companies Avoid Success

June 082011
How Companies Avoid Success
ExperTune User Conference - May 10-12, 2011, Milwaukee, Wisconsin
 
June 2011
 
By Bill Lydon, Editor
 
Gabe Rosica gave the keynote talk at the recent ExperTune User Conference and talked about the industry. Rosica has a deep background in the automation industry having been a vice president at Foxboro, president & CEO at Modcomp computer, Chief Operating Officer at Elsag Bailey, and executive VP at Keithley Instruments. Rosica is now retired but is an advisory partner with Glengary LLC, a venture capital firm, and teaches some classes on entrepreneurship as a part-time college professor. 
 
“A bad economy takes down bad companies or sick companies; it doesn’t take down good companies.” 
 
Rosica started his keynote address by stating that he has watched the automation industry consolidate over the last 20-25 years. Now with the recent economy, he sees many companies going out of business or being acquired. “It is troubling,” says Rosica. He described the response he gets when asking why a company is in trouble, why is it going under, why is it being acquired? “Generally speaking nowadays they say it is the economy,” says Rosica. “Well you know what! It is not the economy - it is never the economy. A bad economy takes down bad companies or sick companies - it doesn’t take down good companies.”
 
Rosica described his view of what makes the difference between a company that, “hangs in there and does well” or a company that is a “one trick pony.” “I think the common denominator with companies that get into trouble is they don’t do the right things - that may sound trite,” says Rosica. He said there is a big difference between doing the right things and doing things right. “They are two completely different things,” says Rosica. Doing things right is being more efficient, effective, serving your customers, the things that make business successful. He noted that doing the right things is good as long as the company is headed in the right direction. When a company is headed in the wrong direction, doing things right will not save them.
 
“When a company is headed in the wrong direction, doing things right will not save them.”
 
He discussed how companies in conservative industries such as automation have a huge momentum driving them in the present direction. Management generally does not want to set a new direction. “They will hang on until the bitter end but won’t go forward in a positive way,” says Rosica.   He went on to explain that making changes hurts short term business results. Technology is the key issue that tends to drive these changes, making what you did yesterday no longer the right thing to do.
 
It is the engineers that tend to see where things are going. The trouble is when engineers go to management telling them that things are going to change, management is not typically receptive to change. He suggested engineers should continue to push for positive changes. The risk is that management may not be receptive. If you keep pushing for change, management gets angry and tells you to “shut up or get out.” “In the end, if the company goes down the tube, you’re probably going to be looking for another job at a time that is not convenient for you,” says Rosica.
 
Other barriers to change are experts and gurus in the company that have accumulated knowledge, knowhow, and expertise in the current technology. Their status and stature in the company is a function of being a guru. If the company goes to a new and different technology, their status goes away so they typically resist change.
 
Rosica cited a number of examples of companies that couldn’t change. He suggested that Polaroid should have been the leader in digital cameras since their business was built on instant pictures. Borders and Barnes & Nobles should have been leaders in eBooks rather than Amazon. Blockbuster has been beaten by Netflix in mail order movies and then streaming video. “The trick is to do it before it is obvious. When you do it when it is obvious it is always too little, too late,” says Rosica. “Companies get hung up on what they are doing today and how change would have a dramatic negative impact on their short term earnings. After all, the things they have been doing are what made them a hugely successful company.” This is short term vs. long term thinking.
 
He closed by suggesting, “As the technical people who follow the technology do whatever you can, whenever you can, to see what’s coming and help your company to see what’s coming so that the company will still be there for you.” “The devastation that has occurred to the lives of so many working individuals because of all these company failures is absolutely terrible. So where you can give a push?”
 
Thoughts & Observations
 
Gabe Rosica shared a number of war stories to support his views. One of the most insightful was when he was an engineer at Foxboro trying to convince management to do digital control systems. Management did not buy into this idea. Not too long after that, Honeywell introduced the TDC 2000 (1975) and changed the industry with digital control.
 
Gabe Rosica gave everyone ideas to think about. I interpreted his core message to be that engineers should be change agents in their companies, and they need to be a combination of technical visionary and diplomat.
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