We all know huge tech companies suffering from Red Giant Syndrome: Yahoo!, Research In Motion, AOL, Nokia. Companies, once dominant in their markets, that continue to sell a huge number of products and services yet are losing consumers and customers at an alarming rate. Barring radical change, each is bound to collapse within a few years. We call this situation Red Giant Syndrome. The term, borrowed from astronomy, originally refers to when a star exhausts the supply of hydrogen that has sustained it for millions of years and begins gobble up any bits of matter it can convert into fuel to sustain its existence. Consequently, they grow to hundreds of times their original volume while dramatically dropping in density. Over time, this imbalance leads to collapse. But it doesn't have to be that way. IBM and Apple - both once "Red Giants" - successfully came back from the verge of implosion. How did they do it? We explain the 3 critical steps in this Slideshare. To read the accompanying article, head over to Forbes. http://blogs.forbes.com/jump/ Design by: Laura Polkus, http://www.laurapolkus.com

1. How to turn around a tech juggernaut
on the verge of implosion
By Peter Mortensen
Jump Associates, October 2012
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2. once mighty tech companies are speeding toward
sudden irrelevance at an unprecedented pace.
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3. nokia’s revenue is off 15%.
2011 Revenue Growth: -15.7%
2011 Net Income Growth: -64.8%
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4. Research in Motion’s
revenue is down 8%.
2011 Revenue Growth: -8.5%
2011 Net Income Growth: -66.9%
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5. And Yahoo!’s “growth” is negative 16%.
2011 Revenue Growth: -16%
2011 Net Income Growth: - 2.8%
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6. Given these numbers, and all the
negative press, you’d think
these companies’ revenues were
just 200 dollars last year.
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7. but YAHOO! HAD ALMOST $5 BILLION
IN REVENUE IN 2011.
2011 Revenue: $4.99 billion
2011 Net Income: $1.1 billion
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8. rim pulled in nearly $17.8 billion
in revenue in 2011.
2011 Revenue: $17.8 billion
2011 Net Income: $1.1 billion
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9. and NOKIA EARNED NEARLY
$50 BILLION IN REVENUE IN 2011.
2011 Revenue: $48.3 billion
2011 Net Income: -$3.25 billion
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10. While the growth engines of
these massive enterprises
have run out of fuel, they
continue to survive thanks
to scale and inertia.
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11. They have become the business
equivalent of Red Giants –
stars that try to postpone
their deaths by consuming
all the planets around them.
(This will happen to Earth, eventually.)
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12. Unless something changes,
these companies will go nova –
scattering patents, people,
and profits as they go down.
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13. Unless something changes,
these companies will go nova –
scattering patents, people,
and profits as they go down.
Understanding that you’re at
risk of becoming a Red Giant
doesn’t stop it from happening.
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14. RIM treated touchscreens as a
niche market, and accordingly
just created one touch phone.
(and a terrible one, at that.)
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15. Nokia took too long to
select a next-generation OS.
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16. And Yahoo!’s acquisitions
could have worked if
it didn’t sit on them.
( flickr could have been Instagram, for example.)
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17. So what’s a CEO thrust into
the position of leading a Red
Giant to do?
Is the company doomed,
or can a new direction help?
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18. Apple successfully grew its
revenue from $9 billion in 1996
to over $100 billion in 2011.
1996 2011
Revenue: $9.8 billion Revenue: $108 billion
Net Income: -$816 million Net Income: $25.9 billion
Revenue Growth: -11% Revenue Growth: 62.8%
Net Income Growth: -92% Net Income Growth: 97.5%
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19. And IBM, with revenue at $64 Billion in 1991,
successfully turned itself around by 2011,
to rake in over $107 Billion.
1991 2011
Revenue: $64.5 billion Revenue: $107 billion
Net Income: -$5 billion Net Income: $15.9 billion
Revenue Growth: -1% Revenue Growth: 7%
Net Income Growth: -78% Net Income Growth: 7.5%
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20. How did Apple and IBM reverse
course on the edge of extinction?
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21. Here are 3 leadership imperatives to save a Red Giant
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22. Here are 3 leadership imperatives to save a Red Giant
1. Figure out what makes you
great and organize accordingly.
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23. Here are 3 leadership imperatives to save a Red Giant
1. Figure out what makes you
great and organize accordingly.
2. Buy time to reinvent the business
with incremental innovations.
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24. Here are 3 leadership imperatives to save a Red Giant
1. Figure out what makes you
great and organize accordingly.
2. Buy time to reinvent the business
with incremental innovations.
3. Place big bets on a few adjacent markets,
then double-down until you hit.
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25. 1. Figure out what makes you
great and organize accordingly.
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26. Steve Jobs shut down everything
outside of integrated hardware
and software.
IN: Beautifully integrated Out: everything else
(all businesses killed in 1997 or 1998)
hardware and software
Video Games Clones
Business and Newton Standalone
Apple’s mid-1998 product line Consumer printers Software
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27. 2. Buy time to reinvent the business
with incremental innovations.
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28. Apple released the iMac in late
1998 – it went on to become the
fastest selling Mac ever built.
It created good PR for the company
until OS X could be launched in 2001.
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29. Motorola released the RAZR in
2004 and it quickly became the
company’s hottest phone ever.
It restored Motorola as an
innovation leader.
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30. Motorola released the RAZR in
2004 and it quickly became the
company’s hottest phone ever.
It restored Motorola as an
innovation leader.
But, Motorola had no sequel,
which allowed Samsung and
others to grow until the iPhone
lowered the boom.
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31. RIM released the Blackberry
Curve in 2007. It was their
first big consumer smartphone
and actually outsold the
iPhone for the first year on
the market.
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32. RIM released the Blackberry
Curve in 2007. It was their
first big consumer smartphone
and actually outsold the
iPhone for the first year on
the market.
This bought the company
time to create and launch
a proper response to the
iPhone and Android, but
RIM never did.
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33. 3. Place big bets on a few adjacent markets,
then double-down until you hit.
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34. Over time, IBM has entered a
number of new businesses
that have become its new core.
1994 2011
Hardware & Software Hardware & Software
IT Consulting
Business Consulting
eBusiness b2b Internet
Integrated Solutions
Vertical Internet
Business Intelligence
PwC Aquisition
Smarter Planet Initiatives
Big Data
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35. 1. Figure out what makes you
great and organize accordingly.
2. Buy time to reinvent the business
with incremental innovations.
3. Place big bets on a few adjacent markets,
then double-down until you hit.
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36. Red Giants don’t have to end in death and destruction,
they can also lead to reinvention.
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37. w jumpassociates.com
T @JumpAssociates
F JumpAssociates
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