'Natural life cycle of a tech company is less than 10 years'

Gartner says business leaders must "destroy and rebuild" the firms they helped create to survive
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Gartner says business leaders must "destroy and rebuild" the firms they helped create to survive

Analyst firm Gartner says the natural life cycle of a technology-driven company is less than 10 years.

Speaking at the Gartner Symposium/ITxpo 2013, VP and Gartner Fellow Steve Prentice said that history indicates that leaders in one wave rarely survive to dominate the next, citing IBM, Nokia, MySpace, Kodak, Borders and HMV as examples.

“Long-term expansion cycles that influence all businesses, and your major competitor in 10 years - if you survive that long - probably do not exist today,” said Steve Prentice, vice president and Gartner Fellow.

“To compete in this environment business leaders must destroy and rebuild the very businesses they helped create.

"Nokia’s metamorphosis is an example of embracing the concept of destruction and reinvention, while the current business model still remains successful. The divestiture of IBM Personal Systems Group to Lenovo and subsequent changes of company’s focus is another example.

"Apple is another company which almost came to extinction several times over its life, and then dominated the next technology wave through significant changes to its operations.”

To survive and even prosper beyond the first decade requires continual reinvention, added Prentice, who said that the challenge with reinvention is timing.

“The idea to ‘quit while at the top’ or to regenerate, may seem counterintuitive, but may be the only winning strategy,” he commented.

“It requires total commitment from the board of directors and other stakeholders, ongoing support from the workforce, but above all, the conviction in the correctness of the course of action being taken. The most challenging aspect is the need to destroy or walk away from what appears to be successful, but will rapidly turn into a crippling legacy which prevents regeneration.”

Business and IT leaders need to prepare for the disruptive promise of 'smart machines', Gartner added, which include autonomous vehicles, intelligent personal assistants, smart advisors and advanced global industrial control systems. “

Over the coming years, we expect to see dramatic growth in the availability, sale and use of smart machines. We predict that smart machines will be the most disruptive change ever brought about by IT,” said Prentice.

Image source: Shutterstock (sign of the times)