Armed cow

I said cash cows kill courage and innovation in media. John Robb says it’s true for defense, as well:

Everything Jeff Jarvis says here applies to the US DoD. The systems that bring in the big bucks are nearly useless in our current security environment yet they suck up the majority of funding. Unfortunately, those big budget programs are also the source of power in the Pentagon.

In what other industries and segments of society is it true that the cash cow kills change?

  • David

    Hollywood and the recording industry. They just can't handle the internet and are trying to make money the old ways.

  • Dishman

    Maybe a better question is, where does it not happen? “If it ain’t broke, don’t fix it”.

    The counter to that is, “If you’re not growing, you’re dying.” Cash cows are doomed to die. Their managers tend to go into defensive mode and try to repel threats, rather than considering challenges to be opportunities. It always fails in the end, though, because any cash cow is a target for someone else.

  • The auto industry is a good example of this, specifically Detroit. First it was big gas guzzler cars, now it is SUV’s. In both cases, the companies are making so much money it has blinded them to the necessity of developing other compelling products.

    I think what you are really talking about is how a corporation or a government manages changing conditions. Mostly, they don’t.

  • Better yet, how about a potential cash cow that didn't die? GE.

  • David

    By the way, when you said media I just wanted to clearify. But while we are at it, MSM dead tree branch, broadcast branch, news branch….

    Colleges are going to have a hard time in the future if we don’t adapt.

    I realize I am being snarky, but just about everything the “progressives” have taken over (notice I AM NOT calling them liberal).

  • I know of one situation where having a cash cow led to ill considered changes. All in the quest to keep the cash cow active and producing.

    In the 1980s the now defunct TSR Inc had a cash cow. The Dungeons & Dragons roleplaying game. It sold, and sold well. Though not at initial levels after a few years. Management at TSR decided something had to be done to up sales. But instead of increasing promotion of the game to reach a wider audience they decided to add stuff. New settings, new options, to the point there was so much crap out there the core got a deplorable reputation.

    The company forgot what their purpose was, to entertain people through a game. They took a cash cow and sabotaged it, turning it into an albatross that ended up killing TSR Inc. When Wizards of the Coast (current publishers of Dungeons & Dragons) came on the scene the only choice TSR had was to either accept Wizards’ offer, or go into involuntary bankruptcy and watch as WotC got D&D for a pittance.

    If you need an example of a bad decision, consider the Spelljammer setting for D&D. Months before the scheduled release TSR decided to kill the product line. But instead of shelving it and going on management decided to produce finished product, release it to stores, and act as if they were going to support it. A move that took up resources and alienated the customer base.

    As you see, it’s not just a matter of adapting/supporting your cash cow, it’s how you adapt/support your cash cow.

  • TSR did more than their horrible product strategy – they were snotty and snippy and arrogant as hell to their customers – both retail and wholesale. At an ABA convention I watched a kid with his dad try and get someone’s attention, and finally he (about 11 years old) said “Let’s go see WOTC – they’re giving away cards”. Loss – two retail customers.

    I was a buyer for what was then the second-largest independent bookstore in the country. Macmillan VPs fell all over themselves to meet me and be friendly. TSR’s reaction? “What bookstore?” Loss – half of their product orders from us, because the attitude towards the retail customer AND one of their bigger wholesalers stunk. It was easy to see they were going to go down hard.

    If the Gates Foundation actually manages to do something big wth vaccines, Big Pharma could have a cash cow syndrome, but it’s hard to say at this point.

  • GregB,

    Fine example of corporate arrogance engendered by a perception of unassailability. Assume you’re doing well enough and can afford to alienate people, and soon you’ve alienated enough people to lose your customers.

    Defensiveness is bad enough. Combine defensiveness with arrogance and you get into serious problems.

  • GregB: Your mention of Big Pharma is very acute. They’re fighting so hard for their position right now, the disasters are accumulating: Vioxx’s is just a beginning. And Jeff, blindness is now well established for what your parents warned you of.

    Try schools. American education lags the rest of the industrial world, is it any wonder that jobs are following it offshore?

  • Jeff,

    you have independently rediscovered Clayton M Christensen’s work on Discontinuous innovation – for more info just google on his name.

  • Jaybird

    The biggest example I can think of:

    The Space Shuttle.

  • chuck

    If Robb mentioned any specific programs, I must have missed them. All he writes down is a bunch of buzzwords. Cheap substitute for thought, IMHO.

  •       Unions.  They succeeded big in the recession, then kept the same policies when the country returned to prosperity.