Silicon Insider: Death by Culture

B U R L I N G A M E,  Calif.,  July 18 -- It is always sad to see a great company die.

Thousands of companies disappear every day, of course. But great companies are different. Even in their dying falls, they still carry with them all of myths and legends, the immense promise, and the glory of the days when they were at the top of the world. The end is often ugly, but they still carry the dim glow of what was.

The latest such company to face oblivion, it is rumored, is Silicon Graphics Inc. In the last few years it has gone through a succession of CEOs, much of the employee ranks have bled away, and the stock price has shrunk to pocket change.

If SGI goes under, there will be the usual press post-mortems. The decline will be blamed on poor management, or failed products or superior competitition.

All of that will be true, of course, but it always is. The real reason will remain unsaid: that the company’s culture went toxic and died.

Corporate Culture Can Save …

After 20 years covering Silicon Valley, I’m convinced that very few companies, especially superstars like SGI was, ever get into trouble by screwing up. As long as the culture, that complex combination of corporate myth, morale and enthusiasm, is strong and vital, a healthy company can recover from almost any setback.

In the mid-70s Intel was under withering attack from Motorola, but regrouped, fought back by revolutionizing high-tech marketing, and went on to become the most valuable company on Earth.

By sheer will, Steve Jobs took a shell-shocked Apple and made it fight back against Big Blue with the Macintosh … then did it again 15 years later with the iMac.

In what, to my mind, is the greatest management story of the century, the aged and retired David Packard and Bill Hewlett returned to a moribund Hewlett-Packard, re-energized the legendary HP Way and restored the company to its lost glory.

… Or Corporate Culture Can Kill

For every story of a company saved by its culture, there are a hundred dead companies killed by poisonous or dead corporate culture.