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5 signs that a vendor won't make it to 2020

Rob Enderle | Nov. 27, 2014
We won’t name names, but there are some telltale signs that a vendor won’t make it to 2020. Rob Enderle identifies conditions for failure and tells you how to apply those dubious qualities to your vendors to determine if they are going to stay in the game.

4. Being a Public Company
While being public doesn't assure failure the "activist investors" are using their increased clout to drain public firms of the resources they'll need to pivot when the market moves.   Private firms are far more able to invest in anticipating the future and build reserves without massive pressure to pay them out in dividends or through stock buyback programs. Private firms, whether they are pre-public or taken private, are able to take the necessary risks without the fear of being pounded in public by traders needing a financial fix.  

5. Lack of Vision
If you can't see the future you can't anticipate it. There are a lot of firms currently being run by people who likely would be better in COO roles than in CEO roles because they are great at keeping the lights on but couldn't spell "vision" if they had the word in front of them.

We saw this in spades with Microsoft last decade and while that firm's massive resources allowed it to survive, Steve Ballmer clearly didn't and it was largely because he was the wrong kind of CEO for a firm that needed to change massively to adjust to the changing market. Operational types will run from change because they are best at managing to the status quo. But you are not only looking for someone with vision but someone that clearly is anticipating the changes that are coming.  

No One Thing Assures Failure
I'm not suggesting that if a firm has one of these problems it will fail, but if it has several its prognoses won't be that good.   This isn't as much an issue if you are buying a generic device because you can easily switch to another, but if they are offering either a unique solution you'll depend on or one that is so massive you can't easily replace it, your vendor's risk becomes your risk and you'll want to avoid that.  

So as we approach the end of the year, step back and look closely at the vendors you can't replace and if you determine they are at high risk of failure you should put in place contingency plans to replace them. If you agree with the massive amount of change I'm anticipating you may want to put in place contingency plans for every critical vendor just in case because no firm is totally assured of surviving what is coming.


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