Every empire eventually falls

Boy, what a mess Toyota is in. But history teaches us that being No. 1 often leads to disastrous results. Empires don't last forever.

In business, there are countless examples of how companies reach the top then fall from grace, often because of self-inflicted wounds. In certain cases, a top company can recover from turning out a bad product. Look at Microsoft. The Windows Vista operating system was a horrible product. It appears Windows 7 has fixed many of the glitches that Vista harbored, but how the heck did the faulty Vista ever make it to market? And don't people who bought Vista deserve a price break when purchasing Windows 7? Apparently not, according to Microsoft.

I worked for USA Today back in the glory days, when we worked ourselves into the No. 1 slot in terms of daily-newspaper circulation. But as soon as we got to be No. 1, things began to splinter. I first noticed it in the hiring. We weren't going after the best of the best anymore. As a result, the journalism got sloppy. Weak links began breaking. Some well-publicized scandals arose. Eventually, when the recession hit, the page-count went down. Then buyouts forced some of the best talent to leave. The company was further gutted by two rounds of layoffs. I was included in one of those rounds. The parent company, Gannett, got itself into deep debt by making some questionable decisions. When that happens, heads will roll and quality control will fall. Unfortunately, those heads are usually in the lower and middle ranks.

Now when I pick up USA Today, it doesn't resemble the product of 10 years ago. It's thinner. There are mistakes. It's also more expensive. It essentially has become the Toyota of newspapers. Not bad, but there are problems. And the reasons behind that can't all be attributed to the changing industry or the economic downturn. Like Toyota, it might be big enough to survive, but will it ever return to what it was in newsprint, online or some other form?

Read this article by Reuters if you want to learn more about the Toyota situation. It speaks of something called "big-company disease." I believe certain companies that make it to No. 1 begin doing things counter to what got them to the top. Maybe it's human nature to rest on one's laurels or to become corrupt with power. Look at the fall of the Roman Empire. History certainly raises enough red flags. Yet, businesses continue to falter soon after making it to the mountain top. Some fallen companies blame failure on the recession. But when you examine their businesses practices leading up to the recession, you begin to see a pattern of greed and self-destructive behaviors.

The big three automakers in Detroit were on top of the world, producing the best cars, feeding the local economy and wowing people at annual auto shows. Then they got complacent. Bonuses to executives were being handed out like candy. Leaner, more innovative companies came along, ones that placed a higher priority on reliability and fuel efficiency. Meanwhile, customer satisfaction with Detroit was hitting new lows. And to some degree, that continues today. If you go back and read my post from December about Chrysler/Jeep, well, that situation has still not been resolved despite receiving promises from the automaker. It's this type of thing that will steer me, and probably thousands of others, away from Chrysler for the rest of my life.

Then there are the AIGs and Enrons of the world. They take arrogance to a whole other level. Once on top, and nearing monopoly status, these companies not only bring themselves down, but they wreck entire economies, not to mention the financial lives of innocent people. The sense of entitlement at the the top in these types of companies should be, and in some cases is, criminal. Without strict oversight, these abuses will continue.

AOL was one of the most successful start-ups in Internet history. Many people got rich at AOL back in the day. It was a relatively small company that got the lion's share of the Internet-provider market. Then AOL decided to merge with Time-Warner, a media giant. From that day on, AOL started on a path of being a nominal player. They fell behind on broadband and other technologies. Once an innovator, they soon became stuck in a corporate muck. They went from being nimble to being trapped in bureaucracy. Now that they've recently freed themselves up from the corporate beast, it will be interesting to see if they can have a resurgence.

NASA, the premier space agency in the world, put men on the moon. But when pressured to push the envelope and produce more frequent space shuttle missions, the agency literally crashed and burned -- twice. The fault for the first space shuttle disaster was mechanically blamed on bad o-rings. But the real culprit for the disaster was the unreasonably ambitious pressure from above and the agency's desire to keep those who were trying to raise concerns from speaking out. The quest to silence those who were perceived to be obstructionists proved to be a fatal mistake that NASA has never truly recovered from.

If you've ever worked for a big company you might know what it's like to go against the grain. Just because you're in the right doesn't mean you'll be heard. In many places, in fact, you'll be punished for raising red flags. That's another strain of "big-company disease" and it too has a tangible cost.

If your company is No. 2 or 3, or maybe not even a major competitor yet, don't feel bad. It's likely that the work you're doing will be more appreciated. There probably will be more pride in your office and less bashing of those who refuse to stick their heads in the sand. Your company will probably be better situated to recover from this awful recession if it avoided the debt trap.

Avis car rentals had a slogan when they were No. 2. "We try harder," was catchy. I think I rather do business with folks trying harder and doing things correctly than companies who are living off their own fat or who act like they don't need my business.

Sorry, Toyota. You got too drunk on your successes and future ambitions. You cut corners to get to a place where there are no shortcuts. And then you didn't easily fess up to problems that cost lives. You aren't alone in acting badly, but you sure have a lot of work to do to restore your image.

Click here to read more about Toyota, Starbucks and other companies that go astray after reaching the top.