Why admired companies shouldn't rest on their laurels

When you're at the pinnacle, the only way is down - so watch out Apple and Facebook, says Stephen Bayley.

by Stephen Bayley
Last Updated: 27 Jan 2016

Edward Gibbon was inspired by the sight of a ruined column. I have in mind a documentary which begins by reprising Gibbon's opening lines from The Decline and Fall of the Roman Empire, but, instead of being set in the historian's desolated Roman Forum, the scene is the Detroit shopping mall that has recently been turned into a fly-blown urban farm. It begins in orotund cadences: 'In the 20th century of the Christian era, the Empire of the United States comprehended the fairest part of the earth, and the most civilised portion of mankind.'

Drum roll. And then, like the Roman Empire, America quite soon became undone. How is it that nations which once were admired become corrupt, or, in the case of companies, are gobbled up by rivals or go bust? Admiration is no more tangible than fog and has a similar cash value. Success is a volatile, fugitive thing. Ask José Mourinho. In Formula One, Cooper and Lotus were in their day invincible, now either gone or hopeless. Soon we will be saying the same, while nodding gravely, about McLaren. Ripple, fade-to-black.

Or consider Motorola. In 1973 Motorola, inspired by the hand-held 'communicator' Captain Kirk used on Star Trek, launched the first mobile phone. Motorola was intelligent and sophisticated. It shifted the coordinates of the world. In the 80s we were all told to study Motorola and worship at the shrine of its weird Six Sigma voodoo. And by early 2011 this most admired company was no more. 

A comparison of Britain's Most Admired Companies in 1990 and the same list for 2015 is, like a 17th-century Dutch vanitas portrait with a weevil crawling through the eye-holes of a skull, disconcerting to anyone who believes that permanence is a given in life or business. Only two companies make the transition over 25 years - Shell and Unilever. Carlton Communications, ICI, Greycoat, anyone?

One factor here is that the loop between success and decline is getting ever shorter. The Roman Catholic Church was a viable entity for one and a half millennia, while the British Empire lasted only 250 years. The Soviet Union was dead at 82. IBM was on top of its game for, say, 60 years. Sony for 45. Where does a company occupying the highest pinnacle - Apple - go except, like Newton's original, inexorably back to earth? Already the signs of decline are apparent at Cupertino: it has started doing catch-up, market-led products and management lacks a clear vision, or any vision at all.

Daily, people admire Apple less. I doubt that it will make 50 years. Facebook? There may, you have to infer, be something that is actually destructive about admiration.

Perhaps its warm glow corrodes instead of encouraging. Perhaps it stimulates a smugness that leads to mediocrity. In this context, a reputation for design excellence, something we expect to admire, is, so far from being a valuable asset, a terrible poisoned chalice. Certainly, in terms of corporate vitality, the list of companies admired for design makes melancholy reading, like a long obituary notice. Besides Sony and Sinclair, there is Braun, Olivetti, Wedgwood, de Havilland and SAAB. All dead or dying. You'd have to assume that design is bad for business.

Any scrutiny of the old Design Council awards would confirm this. To win the admiration of the design community is to be damned to corporate oblivion. Does anyone - apart from me and its designer, Ken Grange - remember the multiply plaudited Milward Courier electric razor? The BMAC top 20 2015  includes only three companies whose output is influenced to any degree by design: Next, Rotork and John Lewis.

In all of business history, Volkswagen's fall from grace is unrivalled in severity or hubris or suddenness. Sixty years of patient exporting and building a reputation for engineering integrity, corporate responsibility and environmental concern made Volkswagen both successful and admired. It is now reviled. Admiration has disappeared in a puff of NOx. M&S may not be far behind. Despite brightly optimistic repetitive relaunches and rebranding, M&S is a failing business. Once admired for its reliable knickers, it is now pitied for its ever more desperate attempts to win back our admiration.

Business is life and life is precarious. Admiration, it seems, cannot be monetised nor turned into a corporate Philosopher's Stone, which the alchemists thought would guarantee wealth and immortality. And an organisation like Ryanair showed for years that it could do more than get by when admiration for its way of doing things was as unknown as on-board frills.

Still, no one would want to run a business that was actively reviled. Now, under pressure from customers dazed by its awfulness, even the rebarbative O'Leary is softening Ryanair's harsh features. It's only natural to seek admiration and you only win it by cultivating positive attributes. But the problem with all natural processes is that they lead to decay. Admiration has only a very short season and it's better to risk planting new flowers than cultivate the old ones everyone liked back then. As Shakespeare knew: 'Lilies that fester smell far worse than weeds.' Ask the man in Wolfsburg.

Stephen Bayley is an author and consultant and is a contributing editor to MT

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