A bird does not sing because it has an answer.  It sings because it has a song.

08 October 2012

Postscript to the story of x2

What was the point of all that, anyway?  As of 2010, according to the FCC, 6% of internet users connected via modem.  Although weirdly enough, Wikipedia reports that AOL added 200,000 dialup customers in 2011 (presumably because it's cheaper than broadband for those hit hard by the recession).    The slowest broadband connection you can get (ISDN) is double the speed of a V.92 modem, and the fastest is measured in hundreds of megabits. So I certainly didn't write down this story to brag about the technology.

Years later, 3Com spun off what was left of U.S. Robotics, and the "new" company is basically a marketing shell for foreign-built commodity hardware.  (It was a big point of pride at USR that we built every one of those modems right here in the good ol' U.S. of A. -- Skokie, Illinois, in fact.)  So it's not about the happy ending, either.

I wrote the story down for three main reasons.  Number one was catharsis.  It was a high time of my life, working in a dynamic environment with supremely cool people, and I miss that, and them, every day.  Writing it down let me relive some of those memories and perhaps preserve them for the future (see also "fandom").  I hope the people who were there with me have followed along and enjoyed a little look back at our history.

Number two was teaching.  We did some things really well, and I hope I touched on those in an instructive way.  Don't look at the details, look at the concepts and methods.  That entrepreneurial spirit, strong sense of teamwork, respect for customers, and drive to solve problems would serve any organization very well, no matter what project it was undertaking.

Number three was as a cautionary tale.  3Com and U.S. Robotics were technologically very compatible.  The merger made all kinds of sense if you just looked at the numbers.  But their cultures were fundamentally at odds with each other, and as soon as either company started telling the other one how to do its work, it was doomed to failure.  Remember that U.S. Robotics acquired Palm Computing in 1995, and that worked out pretty well for both organizations, primarily because USR left Palm alone to do what it did best.  When 3Com started meddling in Palm's business, its founders left and created a new company.  Do you see a pattern here?

Please don't make the mistake of thinking I intend to vilify 3Com.  3Com happens to be the perpetrator of this particular evil, but that doesn't mean 3Com is evil.  More importantly, it doesn't mean 3Com is unique.  Failure to understand the role of culture in a company's success lies at the core of many business failures and almost every failed merger.  If the merging companies don't share similar cultures, or at least cultures that can find common ground and adapt into a single community, the company will fail.  3Com, a company founded by the co-inventer of Ethernet and once possessing enough cash and status to buy naming rights to a major league baseball park, is now completely gone, having been absorbed into Hewlett-Packard in 2010.  U.S. Robotics, once an employer of over 7000 people, now employs about 125.  And Palm bounced around over the years, ultimately being spun into a wholly-owned subsidiary of HP called Gram.  While technological advancements and a few strategic errors are certainly at play in the ultimate demise (or serious marginalization) of each company, the massive failure to get the culture right was a significant factor; probably more significant than any executive at any of the companies ever really realized.

So let this be a lesson to would-be masterminds of M&A -- ignore culture at your peril.  It's not just about what people wear to work.  It's about every choice they make, every word that comes out of their mouths, and ultimately every action they take to ensure the success or failure of an organization.


Frank Sugino said...

Are you sure about the 125 number for USR today? I'd be very surprised if there were more than two dozen left worldwide.

Tracy Lunquist said...

From the media backgrounder on their website:

"Acquired by Platinum Equity in September 2005, USRobotics currently operates from offices in the United States and United Kingdom, as well as satellite offices in seven other countries. Today, more than 125 employees worldwide support the millions of users of USRobotics modems, routers, and security devices."

I suppose they might be exaggerating, but this is their official line.

Frank Sugino said...

Unfortunately, that sounds like a very old blurb. Maybe 125 when they got taken over by Platinum Equity, but when I left in 2007 it was far less than that (under 50). They're down to a skeleton crew... like I said, I'd be surprised if it was more than two dozen.

Tracy Lunquist said...

*shrug* Well, proves my point even better if they're down to almost nothing. Sad to see them go, though.

Karla Shelton said...

Thanks for the memories. USR will always be the best place I ever worked. I miss everyone. I was lucky enough to follow Neil and Jerry to another company post 3Com. I was there for five years and eventually opened my own boutique digital agency.

A big wave to people in the MarCom dept...Sharon, Neil, John, Steve, Fran, Ed, Brent and more.

Karla Shelton

Tracy Lunquist said...

Karla! Good to hear from you, and glad you enjoyed my story!