4 ms·

You're roughly describing the Innovator's Dilemma, which is an entirely different beast (and definitely not what the author of the linked article is referencing

You're roughly describing the Innovator's Dilemma, which is an entirely different beast (and definitely not what the author of the linked article is referencing.)

xapata 10y ago
No, I'm not describing the Innovator's Dilemma. That's essentially the problem of getting stuck in a local maxima and the need to take a temporary loss to find a bigger hill, so to speak. I was instead trying to describe the troubles of maintaining an old system. They're intricate and all fixes must be hot-patched. Now, if you could just reboot... For example, suppose you're at a large enterprise that has a silly expense policy involving taping physical receipts to a standard size paper, one receipt per page, then mailing the packet to India, where the pages get scanned and sent to the accounting department, which meticulously compares the receipts against the Excel spreadsheet you filled out and submitted via VBA macros (yes, this is a true story). How easy would that be to change? Compare that experience with working at a 20-person company and asking the accountant if she doesn't mind using Expensify. Saying that a big company is hard to change isn't necessarily an accusation that the CEO is myopic. As for what McClure meant by saying public companies will be disrupted... I'm not really sure, since he also contradicted himself saying that they'll purchase their potential disruptors. Perhaps he meant that large enterprises which do not acquire new companies will be out-competed by those who do. That's somewhat of an interesting assertion, but I don't know of any large enterprise that has only an M&A team or an R&D team. They all have both.
- DelaneyM 10y ago
  Ok, to put it differently, the Innovator's Dilemma was the interpretation of your description I could most easily agree with. It's also valid, because that local maxima can also exist in a software project where maintenance has a greater short-term payoff than refactoring. In that case I'm sticking to my guns and just disagreeing with you. Many companies are horribly operationally inefficient in many ways, but they often don't care if it's not actively costing them significant market share. The moment that expense report process starts impacting the bottom line you can bet they'll be on the cutting edge of resolving it.
  - xapata 10y ago
    > Many companies are horribly operationally inefficient in many ways, but they often don't care if it's not actively costing them significant market share. My experience suggests otherwise. Big organizations are bureaucracies carved up into little fiefdoms, each little lord trying to maximize something different. The boss of the receipt scanners wants to increase headcount, not reduce costs. As a management consultant, I encountered that situation time and again -- an executive choosing an outcome worse for the company, knowing it'd be better for him or herself, or simply out of pride, laziness, or malice. There's a reason why Dilbert rings true for so many office workers. A new CEO can try to clean things up, but they can't fire all the middle management simultaneously, so the ship turns very slowly. Going back to the software metaphor, it's not the issue of short-term vs long-term thinking on patch vs refactor, but the problem that the system is live and must be highly available during maintenance.
    - dragonwriter 10y ago
      > A new CEO can try to clean things up, but they can't fire all the middle management simultaneously, so the ship turns very slowly. Firing all middle management doesn't help: humans are self-interested. What a CEO needs to do is align incentives for middle management with the interests of the firm, so that self-interested middle managers aren't microoptimizing their domains on criteria that don't serve the interests of the company.
      - xapata 10y ago
        > align incentives That's a good buzzphrase, but I've never seen anyone do it in earnest. I was once on a consulting project to help a "Director" pick appropriate KPIs as part of a company-wide effort to improve departmental performance measurement. They rejected my suggestions to measure their effect on profit. My manager, to rescue the project, told me to ask what they wanted to be measured on, write it down, and hand it back as the report. The Director loved that idea and rattled off a list of metrics that could be easily sandbagged and had no clear relationship with company profit. ... And yes, that company is very large and well-respected.

You're roughly describing the Innovator's Dilemma, which is an entirely different beast (and definitely not what the author of the linked article is referencing.)

xapata 10y ago

No, I'm not describing the Innovator's Dilemma. That's essentially the problem of getting stuck in a local maxima and the need to take a temporary loss to find a bigger hill, so to speak. I was instead trying to describe the troubles of maintaining an old system. They're intricate and all fixes must be hot-patched. Now, if you could just reboot... For example, suppose you're at a large enterprise that has a silly expense policy involving taping physical receipts to a standard size paper, one receipt per page, then mailing the packet to India, where the pages get scanned and sent to the accounting department, which meticulously compares the receipts against the Excel spreadsheet you filled out and submitted via VBA macros (yes, this is a true story). How easy would that be to change? Compare that experience with working at a 20-person company and asking the accountant if she doesn't mind using Expensify. Saying that a big company is hard to change isn't necessarily an accusation that the CEO is myopic. As for what McClure meant by saying public companies will be disrupted... I'm not really sure, since he also contradicted himself saying that they'll purchase their potential disruptors. Perhaps he meant that large enterprises which do not acquire new companies will be out-competed by those who do. That's somewhat of an interesting assertion, but I don't know of any large enterprise that has only an M&A team or an R&D team. They all have both.

DelaneyM 10y ago
Ok, to put it differently, the Innovator's Dilemma was the interpretation of your description I could most easily agree with. It's also valid, because that local maxima can also exist in a software project where maintenance has a greater short-term payoff than refactoring. In that case I'm sticking to my guns and just disagreeing with you. Many companies are horribly operationally inefficient in many ways, but they often don't care if it's not actively costing them significant market share. The moment that expense report process starts impacting the bottom line you can bet they'll be on the cutting edge of resolving it.
- xapata 10y ago
  > Many companies are horribly operationally inefficient in many ways, but they often don't care if it's not actively costing them significant market share. My experience suggests otherwise. Big organizations are bureaucracies carved up into little fiefdoms, each little lord trying to maximize something different. The boss of the receipt scanners wants to increase headcount, not reduce costs. As a management consultant, I encountered that situation time and again -- an executive choosing an outcome worse for the company, knowing it'd be better for him or herself, or simply out of pride, laziness, or malice. There's a reason why Dilbert rings true for so many office workers. A new CEO can try to clean things up, but they can't fire all the middle management simultaneously, so the ship turns very slowly. Going back to the software metaphor, it's not the issue of short-term vs long-term thinking on patch vs refactor, but the problem that the system is live and must be highly available during maintenance.
  - dragonwriter 10y ago
    > A new CEO can try to clean things up, but they can't fire all the middle management simultaneously, so the ship turns very slowly. Firing all middle management doesn't help: humans are self-interested. What a CEO needs to do is align incentives for middle management with the interests of the firm, so that self-interested middle managers aren't microoptimizing their domains on criteria that don't serve the interests of the company.
    - xapata 10y ago
      > align incentives That's a good buzzphrase, but I've never seen anyone do it in earnest. I was once on a consulting project to help a "Director" pick appropriate KPIs as part of a company-wide effort to improve departmental performance measurement. They rejected my suggestions to measure their effect on profit. My manager, to rescue the project, told me to ask what they wanted to be measured on, write it down, and hand it back as the report. The Director loved that idea and rattled off a list of metrics that could be easily sandbagged and had no clear relationship with company profit. ... And yes, that company is very large and well-respected.