How could smart people get so stupid so fast

Whenever you read explanations about why a company is so successful, inevitably its success was attributed to the sheer brilliance of its management's team. Then in few years, the company fell off the cliff and began to unravel very quickly. When you read the explanations about why it had stumbled so badly, it was always attributed to the same management team; the folks running the company who had earned unfettered praise for so long. (1) This disturbed Clayton Christensen for a long years. 

Clayton framed the question 'Gee, how could smart people get so stupid so fast?' Its because of bad management and doing dumb things. 

Bryan Eisenberg, in his book, Be like Amazon explains about dumb things succinctly as it goes below. 

Why do smart people do dumb things? Because dumb things produce immediate results.

So immediate results are that bad?

No. Immediate results aren’t always bad. They’re only bad when the actions you take to generate those results aren’t sustainable. When you’re doing the wrong thing, it will produce big results immediately, but it will work less and less well the longer you keep doing it. When you’re doing the right thing, it usually hurts a little at first. But it works better and better the longer you keep doing it. (2)

In order to be right and relevant always, create unifying principles. 

Unifying principles are an operating system. A mission statement is a propaganda. 

Unifying principles of Eastman Kodak. George Eastman organized the Eastman Dry Plate Company in 1881 under four unifying principles:

1/ Keep the price of the product low so the customer will find more uses for it
2/ Always sell by demonstration
3/ Be the first to embrace new technologies
4/ Listen to what the customer tells you

Unifying principles of Amazon.

1. Customer Centricity
2. Continuous Optimization
3. Culture of Innovation
4. Corporate Agility

To end on an optimistic note....Companies do survive and thrive over a very long period of time. Here are 13 companies in the Fortune 500 list that are all over 150 years old. To give you some sense of how long that is... It was on 17th of December 1903 that Orville Wright became the first human to fly - for 120 feet. (3)

1. Bank of New York Mellon (1784!) 

2. Cigna (A piece Insurance Co of North America, 1792) 

3. J.P. Morgan Chase 

4. DuPont (Irenee DuPont with Thomas Jefferson!)

5. Colgate Palmolive 

6. Hartford Financial Services Group 

7. Citigroup 

8. Consolidated Edison 

9. CSX 

10. Macy's (1830, and now sadly in a lot of trouble) 

11. State Street 

12. McKesson 

13. Cameron International

All these companies are surviving and thriving, because their unifying principles are in actions more than words.

Courtesy & Inspiration

(1). Competing against luck - Chapter 1 - Clayton Christenson 

(2). Be like Amazon - Chapter 5 - Bryan Eisenberg
(3). The Marketing Analytics & Intersect newsletter - TMAI 70 - Life & Death in the Business World - Avinash Kaushik