What I experienced was a general dissatisfaction by the 'old guard' on where the company was going. Typically they would vote with their feet and start leaving to start other companies or other lives. A few of the old guard hung on, with an increasingly solid position because they had institutional knowledge that was no where else, eventually those folks can sleep at their desk and they will still reliably pull down the 'senior person' paycheck. And the company will refill with new employees who never knew what the company was like before so this is like how it is now. The company becomes more stagnant and less nimble, more unaware of what it doesn't know and more vocal about things it believes to be true but aren't. At this point the company becomes less competitive and depending on its residual DNA either fades away into the sunset (Sun) or turns into something else entirely (NetApp).
It is a great time to plant the seeds of something new. If it is cool enough you can recruit a lot of engineers out of these fading companies.