Zombie companies are everywhere! But there’s a cure

It’s zombie season again! Not only was The Walking Dead back with new episodes this month, but neighborhoods around the country are about to be crawling with zombies (most can be staved off with a little chocolate).

In business, unfortunately, zombie season has been in full swing for some time. This is an era of digital disruption, and it’s completely changed the way business is done, but not everyone has gotten on board. Companies are persisting with outdated business models, investing in outdated products, and committed to outdated delivery methods. To me, these companies are zombies, dead without knowing it. They may be moving forward, but don’t let the motion fool you, they’re only moving toward obsolescence.

But there is a cure. Unlike TV zombies, companies can come back to life and take themselves off the path to oblivion. Many, in fact, have already done it by innovating and getting ahead of trends. Think of IBM’s evolution: The inventor of the mainframe invents the PC, and is now inventing cognitive thinking in robots. But for every IBM, there’s more than a few Wang Laboratories. To me, companies today can avoid Wang’s fate by opening their eyes wide to the realities of a cloud-first world, and then embracing the interconnection that powers it.

What makes a zombie?

The term “zombie company” was born in Japan in the 1990s to describe businesses that were still generating cash, but only enough to service the interest on their debts. They were alive, but not really. The same holds true for companies over-invested in business models and technologies that today’s trends and innovations are quickly superseding. An example would be a hardware company that builds physical appliances critical to an on-premises corporate data center, maybe network load balancers or routers. Yes, there are still plenty of companies relying heavily on that hardware supplier, because most companies (an estimated 60 percent of them) still run their own data centers. But how long can that last?

Leave a Reply

Your email address will not be published. Required fields are marked *