While Fortune’s famous list of 500 corporate superpowers may seem like a knighting that all but shields a business from failure, there are classic cases of this simply proving untrue. These three well-known, once-admired companies are now propped up as examples of how not to operate.

American Motors Corporation

Its name alone was so broad and all-encompassing that American Motors Corporation (AMC) seemed synonymous with the nation’s role in automotive-engineering development. Once the owner of sub-brands like Rambler, Nash, and Jeep— the latter being the only well-known brand today—AMC took strides that have influenced the automotive market long
after its closure. AMC was the first to implement four-wheel drivetrains in affordable family cars. It is also responsible for developing the Jeep Cherokee and Grand Cherokee, paving way for the modern SUV, the most popular body style in many parts of America today. Some of its vehicles, including the 1969 Rambler American, are considered highly sought-after classics.

Founded in 1954, AMC held its own against the “Big Three” manufacturers—Ford, Chrysler, and General Motors—even earning a spot on the Fortune 500 list alongside them. When the US slipped into a recession in 1958, AMC was the only automaker to report a sales increase rather than slashed revenue.

However, fortune reversed for this imperiled company, which was plagued with internal problems like poorly timed

vehicle releases, slow response to customer demand, and irresponsible financial management. Customers balked at AMC’s pitifully small lineup of vehicles and largely preferred more cutting-edge models by the Big Three.

In 1987, Chrysler swooped in to purchase an indebted, spiraling AMC. It’s rumored that Chrysler made this decision solely to get its hands on the Jeep brand, which has consequently flourished since it was taken under Chrysler’s wing. As Bob Sorokanich of the popular automotive blog Jalopnik writes, this was “a move that helped the larger automaker survive its closest scrape with death and made Jeep into the modern juggernaut it is today.” The term “modern juggernaut” certainly could not apply to AMC, an abbreviation now associated with a TV network.

MCI

In 2004, MCI Inc. ranked at number 168 on the Fortune Global 500 list, but this would be one of the last times MCI stood among titans. At the time, it was one of the largest and most diversified communications corporations in the world, contending with AT&T as a giant that connected people internationally. Anyone who remembers MCI’s famous pin-drop commercial and seemingly permanent billboard in Times Square might wonder what exactly happened to such a global communications success.
In 1963 Microwave Communications Inc. opened its doors to stand toe to toe with AT&T, one of the largest monopolies in US history. Competition fueled MCI to develop impressive long-distance phone call technology, building the nation’s second-largest fiber-optic network. By 1990, MCI served a network of over 46,000 miles and offered a whopping fifty communications services, including voice and data.

However influential MCI may have been, though, it couldn’t outlast the game of competitive buyouts and mergers that has historically plagued the communications industry. Amid suffering profits, rallying consumer demand for more advanced communications products, and legal scandals like accounting fraud, MCI spiraled and Verizon acquired the company in 2006.

It’s difficult to unpack what exactly went wrong with MCI. It came about in an environment with rapidly changing technology, and its once revolutionary developments like long-distance communications now seem all but unimpressive. Overall, MCI may have failed to keep up with competitors’ nascent technologies—and a $500 million fraud lawsuit did little to bolster consumer confidence or MCI’s bottom line.

Sears

The rise and fall of Sears is one of America’s finest examples of a seemingly untouchable business crumbling under the weight of its own legacy. Once the largest and most powerful retailer in the world, Sears is now known for the ghostly stains where its letters once hung on an empty side of the local shopping mall.

For older generations, this historic cultural staple may bring several images to mind: perhaps the Sears Tower in Chicago, where the company’s headquarters perched high above the metropolitan skyline, or the mail-order catalog that families across the nation awaited like a lost pet returning home to scratch at the front door.

Sears, Roebuck and Co. began in 1893 as a mail-order service. Founders Richard W. Sears and Alvah C. Roebuck sold
fine jewelry and clothing via intricate catalogs with hand-drawn artwork and a generous selection. Their willingness to ship fashion goods to distant rural areas that didn’t have access to Main Street clothing stores and jewelers soon projected Sears into stellar success.

Though a failure to evolve eventually led to Sears’ twenty-first-century demise, the company succeeded through
several transformations throughout its history. A series of brilliant owners and executives guided Sears past economic hardship, founded the company’s flagship department store, and expanded its product line to include appliances and mail-order modular homes. In fact, Sears expanded into subsidiary services that survive to this day, including Allstate insurance and the Discover credit card. At its peak, Sears reported billions of dollars in profits.

But in the early 2010s, various challenges plagued the company. Walmart’s unbeatable prices unseated Sears as America’s leading retailer, and burgeoning consumer preferences for online shopping challenged brick-and-mortar retail. Under CEO Eddie Lampert, underperforming stores were ordered to close, controversial staffing cuts led to internal discord,
and the dated Shop Your Way in-store rewards program was a failure—it just couldn’t keep up with online retail outlets like eBay and Amazon.

Between 2010 and 2017, Sears’s retail sales plummeted by $26 billion. Then, in 2018, Sears made headlines when it filed for Chapter 11 bankruptcy. By 2022, only about twenty stores remained open, each of which operates under independent franchisees. In the eyes of most of the world, Sears is a retailer of the past. Some may reflect fondly on its erstwhile and now-ironic slogan, “Sears has everything,” or the bygone experience of sifting through its selection at the local mall. And yet public nostalgia would be poor consolation to Sears’ final executives; they would likely prefer to hold a spot on the Fortune 500 in 2023.

Take Action: Reflect on how your organization could keep up with the latest economic challenges. How are you responding to consumer demand? Could your immediate competitors be offering new products or services to outpace you?