3. Popular press/personal example: Read the newspaper, Business Week, Inc. or think through your own experiences and find a story that relates to the week's readings.
Our most recent Live Session left me yearning for more about organizational design. My group’s presentation about MAAD MEN made me think about other well-known brand names, young and old. One division of Kodak fell from grace, but is there another company that has made a big splash in the same market and subsequently failed due to managerial flaws? Yes, the Flip Camera.
The Flip hit the market in 2007 and made more than a splash. It rose very quickly, almost to fast. As a result, its doors closed in 2011. It’s actually a sad story. It was an incredibly hip camera (I own a few for work purposes), and yet, people didn’t see the point in the device because a Smartphone possesses the same capabilities. Inspired by Daft’s Fundamentals of Organization Structure, I researched its demise to learn more about its structure.
What structure did Flip have setup? In 2009, its structure undoubtedly changed because it was acquired by Cisco for a reported $590 million. Subsequently, Flip married into the structure Cisco had developed. In the article ‘Read Cisco CEO’s Mea Culpa: ‘No Excuses’’ from The Wall Street Journal, Cisco CEO John Chambers admits to making incredibly slow decisions and “reshape the operational foundation in order to empower our teams, integrate our major functions, and allow our people to focus on inspiring and important work” (Benoit, 2011).
Cisco reshaped its structure by firing 550 of its 73,000 employees (Benoit, 2011). Due to its poor response to changes, terrible decision-making, and lack of communication, Cisco has a Functional Structure (Daft, 2007). It’s actually sad to think about the rise of a popular device and its fall all within five years of each other because an organization couldn’t decide how to market and promote it. It’s also imperative for a company of Cisco’s size to know how the environment responds to devices like the Flip. They made a big leap to acquire the Flip and couldn’t handle its properties properly. The restructuring of Cisco came too late in the game and it cost them employees and money.
Last Thursday, as I presented the challenges of MAAD MEN (Kodak), a person asked how I would restructure the organization. One response I gave included laying employees off and hiring more managers. Laying a relative few off will ultimately make the organization, as a whole, better.
Works Cited
Daft, R. (2007). Fundamentals of organizational structure. Organization Theory and
Design (9th ed.), pp. 88-125 (Chapter 3)
Benoit, D. (2011, April 5). Read Cisco CEO’s mea culpa: ‘No Excuses’. The Wall Street
Journal. Retrieved from http://blogs.wsj.com/deals/2011/04/05/read-cisco-ceos-mea-culpa-no-excuses/
Benoit, D. (2011, April 12). RIP flip camera: Cisco restructures. The Wall Street
Journal. Retrieved from http://blogs.wsj.com/deals/2011/04/12/rip-flip-camera-cisco-restructures/
Interesting example, Thomas. You mention that Flip failed due to smartphones and because of Cisco's structure/marketing. Which do you think was the main reason for its failure? Do you know what type of structure Flip had before being acquired by Cisco? You say Cisco fired employees to reshape its structure, but what structure did it change to? Would this new structure have helped Flip succeed?
ReplyDeleteHi Thomas, I thought I might try and respond to your post using FLIP video and couldn't do it here in the Comments section, so I published a new post using video (the transcript in CAPS is also there with references). I didn't want to subject you to caps here and just included the references I used in responding.
ReplyDeleteREFERENCES
McArdle, M. (2012, March). Why Companies Fail. The Atlantic. Retrieved from
http:/www.theatlantic.com
Daft, R. (2007) Fundamentals of Organizational Structure, “ Organization
Theory and Design. ( 9th Ed.), pp. 88-125
Nohria, N. (1991). Note on organizational structure. Boston, MA: Harvard
Business School Publishing
Pade, C. (Producer). (2012, February 9). CMGT 500 Week 03 Live Session https://www.fuzemeeting.com/
replay_meeting/e7ade9be/2279241 Retrieved from http://www.mcm.usc.edu
I think Flip failed due to Cisco's mishandling of the brand. Once acquired, Cisco began to make alterations to the device. Too many differing ideas for the future of the product led to its demise. After investing so much into one product, Cisco should've created a direct path for Flip's success.
ReplyDeleteUnfortunately, I don't know what kind of structure Flip had before it was acquired. I imagine it was an entrepreneurial structure, which was unstable yet dynamic as stated in Managing in an Information Age: Organizational Challenges and Opportunities.
I may have misspoke by stating that Cisco reshaped its structure after firing people. I think they let employees go so they could reevaluate their structure, but not change its model. With this reevaluated structure, I believe Flip would've excelled because they would've had more people investing time toward the product's development.
BTW Courtney, this is the company I brought up during my presentation on MAAD MEN. I stated that Kodak should've bought GoPro before it became this big. Check it out http://www.inc.com/magazine/201202/the-gopro-army.html
ReplyDeleteGreat, thanks for posting!
DeleteHi Thomas,
ReplyDeleteGood analysis of your article. Having some experience with Cisco, I am really surprised the company has not redesigned it's structure. They ARE the Internet in some ways due to the heavy dependance on their high-capacity broadband routers and switches by many technology companies. After reading your analysis, it is apparent that a tech company, which should have known the extremely dynamic environment it was working in by nature of it being one of the major players in tech, failed miserably. After reading this, I began to wonder if they are the cutting-edge technology equipment provider that they claim to be. If their functional structure is so sadly equipped in dealing with the aquisition of Flip, are they really putting out the type of advanced technology that companies require in present-day? And I wonder if there are any competitors in Cisco's core business (routing equipment) that are in a position to take advantage of their organizational weaknesses.
Very interesting read! Thanks for sharing!
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DeleteThomas, even though the brand failed, I think the concept of the small, portable camera isn't completely dead. We use a small, portable camera at employee functions we hold and community events we participate in, and I'm planning on producing videos of all of the trade shows our company attends but only sales people go to. One plus I notice vs. using my smartphone is the ability to mount it to a tripod. You can be your own writer, cameraman and editor without having someone there to hold your phone for you. So while the brand Flip failed thanks to Cisco, I don't think the idea is totally gone just yet.
ReplyDeleteLauren,
ReplyDeleteI agree with you on the continued use of that technology. It's not R.I.P. yet, though maybe on long-term bed rest until R & D finds a way to bring it back.
One way is to include a driver in that device to connnect seamlessly into a Plasma/LCD screen directly (through a USB or HDMI connection interface).
Thomas,
I did start reading the Inc article on GoPro, and they seemed focused on HD video for the active recreation user. Their customers were also tagging their exploits more comprehensively (who wouldn't tag the heck out of a video showing them riding [surfing] a 7-foot barrel at Trancas in Malibu or Rincon in Ventura and forwarding it to their entire universe?), which created a tipping point for the company.