Steve Denning, Forbes — Cisco vs. Juniper: Delight or Die!
In the 1980s American business discovered quality and started getting into the quality business. They had learned from Toyota that the best ideas came from the bottom up. They recognized that everyone could make a difference and contribute to delighting a customer. It was all about teamwork. It was exciting. Some companies were succeeding but others were finding it difficult to implement.Then the investment bankers-Goldman Sachs, Morgan Stanley, J.P.Morgan and so on-showed up and started whispering in the CEOs’ ears.
“How do you know that what you are investing in is worth it? Why go through all that hassle? Why not just buy your competitor and let half their people go. There’s little risk. Your stock price will go up. Your company will be much bigger and more powerful. And you personally will get a huge bonus.”
And that’s basically what happened. Many companies took the easy way out. And in the short run, it worked. The acquisitions were made. The companies got bigger while many jobs were lost. The CEOs got their bonuses. In the short run, buying other firms made money, but essentially these firms were heading down a long-term death spiral.
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