Few firms are good at recognising their own flaws (which helps to explain why only one company from the original Dow Jones Industrial Average of 1896 is still on that list: General Electric).
Henry Ford was so allergic to evidence that America was falling out of love with the Model T that he dismissed sales statistics as fakes and fired an executive who warned him of disaster.
Sears started to build its giant headquarters—the 110-storey Sears tower—at exactly the moment, in 1970, when its fortunes began to go south.
IBM allowed Microsoft to take over the PC operating-software business because it thought that the money was in hardware.
Nokia allowed a substandard boss, Olli-Pekka Kallasvuo, to run the company for four years before finally getting rid of him.
In “The Innovator’s Dilemma”, Clayton Christensen of Harvard Business School argues that companies are often doomed not by their failures but by their triumphs. They may realise that the world is changing. But they are so good at doing what they have always done—making mainframe computers in IBM’s case—that they make a hash of embracing the new.
Schumpeter, The Economist