Everyone thinks they understand why big companies stop innovating. The usual story: success breeds complacency, bureaucracy kills creativity, marketing people replace product people. But what if we've got the causation backwards?

The weird thing about success is that it quietly changes what a company values. When companies hit their peak, something subtle shifts. Instead of measuring product breakthroughs or technical achievements, they start tracking market share retention, quarterly revenue stability, brand perception scores. The numbers look great - they're just measuring things that favor preservation over disruption.

This creates a paradox: the better a company gets at maintaining its success, the worse it gets at the kind of disruptive thinking that created that success. It's not that they get worse at building things - they get incredibly good at perfecting things that won't risk their market position. Every launch gets smoother, every marketing beat hits perfectly, every quarter meets expectations exactly.

Think about Apple's current phase. They haven't lost the ability to create - they've gained an exceptional ability to predict and deliver exactly what maintains their position. Each product launch is a masterclass in meeting expectations without disrupting them. The problem isn't that they can't build things well - it's that they're building the safest version of what already works.

TBH this isn't just organizational behavior - it might be a fundamental property of any system that gets too good at maintaining its position. The better you get at protecting what works, the harder it becomes to see what could work better. Excellence becomes its own worst enemy.

The real insight isn't that these companies got lazy or lost their edge. It's that they got too perfect at protecting what made them successful. They've refined their ability to maintain position so well that even recognizing there might be better paths becomes nearly impossible. The system isn't broken - it's working exactly as designed. That's the problem.

"The technology crashed and burned at Xerox. They used to call the—what's that? Why? I actually thought a lot about that, and, I learned more about that with John Scully later on and I think I understand it now pretty well.

"What happens is, like with John Scully, John came from PepsiCo, and they at most would change their product you know once every ten years, I mean to them a new product was like a new size bottle, right? So, if you were a product person, you couldn't change the course of that company very much. So who influenced the success of PepsiCo? The sales and marketing people. Therefore they were the ones that got promoted and they were the ones that ran the company.

"Well, for PepsiCo that might have been ok, but it turns out the same thing can happen in technology companies that get monopolies. Like IBM and Xerox. If you were a product person at IBM or Xerox, so you make a better copier or computer, so what? When you have a monopoly market share, the company's not any more successful. So the people that can make the company more successful are the sales and marketing people, and they end up running the companies, and the product people get driven out of the decision making forums.

"And the companies forget what it means to make great products. Sort of the product sensibility, and the product genius that brought them to that monopolistic position gets rotted out by people running these companies who have no conception of a good product versus a bad product. They have no conception of the craftsmanship that's required to take a good idea and turn it into a good product, and they really have no feeling in their hearts, usually, about wanting to really help the customers.

"So that's what happened at Xerox. the people at Xerox Park used to call the people that ran Xerox 'toner-heads'. These toner-heads would come out to Xerox Park and they just had no clue about what they were seeing."

— one of the greatest innovators in American history (here’s a reddit thread from 12 YAgo)

Everyone thinks they understand why big companies stop innovating. The usual story: success breeds complacency, bureaucracy kills creativity, marketing people replace product people. But what if we've got the causation backwards?

The weird thing about success is that it quietly changes what a company values. When companies hit their peak, something subtle shifts. Instead of measuring product breakthroughs or technical achievements, they start tracking market share retention, quarterly revenue stability, brand perception scores. The numbers look great - they're just measuring things that favor preservation over disruption.

This creates a paradox: the better a company gets at maintaining its success, the worse it gets at the kind of disruptive thinking that created that success. It's not that they get worse at building things - they get incredibly good at perfecting things that won't risk their market position. Every launch gets smoother, every marketing beat hits perfectly, every quarter meets expectations exactly.

Think about Apple's current phase. They haven't lost the ability to create - they've gained an exceptional ability to predict and deliver exactly what maintains their position. Each product launch is a masterclass in meeting expectations without disrupting them. The problem isn't that they can't build things well - it's that they're building the safest version of what already works.

TBH this isn't just organizational behavior - it might be a fundamental property of any system that gets too good at maintaining its position. The better you get at protecting what works, the harder it becomes to see what could work better. Excellence becomes its own worst enemy.

The real insight isn't that these companies got lazy or lost their edge. It's that they got too perfect at protecting what made them successful. They've refined their ability to maintain position so well that even recognizing there might be better paths becomes nearly impossible. The system isn't broken - it's working exactly as designed. That's the problem.

"The technology crashed and burned at Xerox. They used to call the—what's that? Why? I actually thought a lot about that, and, I learned more about that with John Scully later on and I think I understand it now pretty well.

"What happens is, like with John Scully, John came from PepsiCo, and they at most would change their product you know once every ten years, I mean to them a new product was like a new size bottle, right? So, if you were a product person, you couldn't change the course of that company very much. So who influenced the success of PepsiCo? The sales and marketing people. Therefore they were the ones that got promoted and they were the ones that ran the company.

"Well, for PepsiCo that might have been ok, but it turns out the same thing can happen in technology companies that get monopolies. Like IBM and Xerox. If you were a product person at IBM or Xerox, so you make a better copier or computer, so what? When you have a monopoly market share, the company's not any more successful. So the people that can make the company more successful are the sales and marketing people, and they end up running the companies, and the product people get driven out of the decision making forums.

"And the companies forget what it means to make great products. Sort of the product sensibility, and the product genius that brought them to that monopolistic position gets rotted out by people running these companies who have no conception of a good product versus a bad product. They have no conception of the craftsmanship that's required to take a good idea and turn it into a good product, and they really have no feeling in their hearts, usually, about wanting to really help the customers.

"So that's what happened at Xerox. the people at Xerox Park used to call the people that ran Xerox 'toner-heads'. These toner-heads would come out to Xerox Park and they just had no clue about what they were seeing."

— one of the greatest innovators in American history (here’s a reddit thread from 12 YAgo)