The other day I read a quote from a Government Minister, it went along the following lines:
“This company makes a first class car, we can’t allow this business to fail.”
Rubbish!
He totally ignored the first rule of business – to be successful there must be a market for your products or services. Sure, with new things you may need to put in quite a lot of time and effort ‘educating’ and ‘creating’ the market – but, in the normal scheme of things, most products (and businesses) have a life cycle.
My question is, do we (the people) want to be shareholders in businesses that have clearly reached the end of their life cycle?
The fact is that, when businesses die, true entrepreneurs will pick over the bones and retrieve the parts that retain some value – yes, jobs will be lost in the short-run…but, in the long run, new and better businesses will arise from the ashes without the baggage of the past. These businesses will employ people and the cycle will begin again.
Surely it is this short-term thinking that is partially responsible for getting us into the mess in the first place – the politicians are, in this case, replicating the errors of the bankers…seeking short-term gain at the expense of longer-term stability.
Let’s stop giving life support to businesses that are failing – let them die – what emerges will be stronger and better adapted…
From a supply chain perspective, where I come from, all supply chains have a life cycle. On a wider prespective, the same goes for businesses. It’s just “natural”, although many old industy giants seem to fail to recognize that you cannot go on forever. As we say where I come from, there’s no point in bringing water to a dead horse.
By: Jan Husdal on June 8, 2009
at 07:39