Two hundred years ago there were men working on the fringe of high technology. They were trying to develop a steam-powered engine that was small enough to be mounted on a platform on wheels, and strong enough to make that platform move. They dreamed of making such a device pull other platforms with people and goods on board. They were trying to invent a locomotive and develop a new railroad industry.
The British were having some success when a small group of Philadelphians started building these contraptions called locomotives in the United States. Interestingly, the Philadelphians had a common back ground as watchmakers.
From these efforts evolved a company called the Baldwin Locomotive Works, founded by watchmaker Matthias Baldwin. Over the next one first one hundred year history of the Baldwin Locomotive Works, they would build almost 60,000 locomotives. Their production would be roughly one-third of all locomotives built in the United States during that time. The Baldwin Locomotive Works was truly an example of success in the world of early locomotives and railroads.
Throughout the entire first century of the Baldwin Locomotive Works every engine was handcrafted as a single item, or part of a small batch of similar locomotives. The beginning of the second century brought a new competitor into the business of railroading. The Electro-Motive subsidiary of General Motors started building Diesel locomotives in assembly line production. If the railroad needed a bigger more powerful engine they could simply connect two, or three, diesel locomotives together. The day of the small batch of unique locomotives was coming to an end.
The Baldwin Locomotive Works failed to adapt and respond to the competition. They built their last locomotive in 1956. They were the leader in the high technology of their time. They failed to maintain that leadership, even when it meant destroying the very technology and products their success was built upon.
The Knowledge Nugget to be learned from the story of The Baldwin Locomotive Works is simple. Concentrating on defending existing technology and not developing the new technology that will ultimately destroy your dominant position and will allow someone else to develop that new technology and destroy your company.