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Tuesday, November 10, 2009

A death spiral in evolution

It is truly fascinating to witness a corporate death spiral firsthand.  Here's how one just unfolded in my presence.

  • Company A, a software as a service (SAS) solution lands big client, Company B, an EMR company.
  • The arrangement flourishes.
In business--and life--the only constant is change.  In this case change produced:
  • Increase in demand for company B's SAS solution
  • Company A needs to invest in infrastructure to support Company B's plans.
Credit Crunch or bad Management?
  • Company A unable or unwilling to accomodate Company B's plans
  • Company B finds SAS vendor that will
The death spiral begins.
  • Company B signs with Company C, the new SAS provider
  • Company A makes lay offs of technical employees
  • Service declines at Company A
  • Company B gets tons of complaints
  • Company B pulls remaining clients from Company A
  • Company A has problems.
Wow!

Could this have been avoided by Company A.  In this economy, who knows?  Probably not.  I wish them luck.

Dr Schoor