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I think you're right, but I have a somewhat less dire view on this. I think that large companies optimize for a fundamentally different outcome than smaller co
by groestl 8y ago
I think you're right, but I have a somewhat less dire view on this.
I think that large companies optimize for a fundamentally different outcome than smaller companies, like startups. Large companies became large by applying a successful business model, something that startups are still lacking. If you have a working business model and stable cashflow, any change is potentially dangerous and can take down the company. So in contrast to whatever the marketing material says, rigidity and inability to change is actually an asset for large companies. This means the more inflexibility is added to the organization (e.g. by imposing a Book of Procedures that can never be abolished, employing people with no real power to change anything, or self-selecting a staff which is, put blatantly, incompetent to change), the longer the organization keeps existing. Until the market changes fundamentally, that is.
- zekrioca 8y agoIt is funny that one can seen this "inflexibility asset" in many, many organizations, from various industries and areas. People running those really do not like changes..
- groestl 8y agoIt's not that penguins have cold blood in their feet because otherwise they could get stuck on ice. It's that all penguins that had warm blood in their feet have died.
- Spooky23 8y agoAbsolutely. There are lots of products that are essentially exactly the same as they were years ago, which is great — change is often a bad thing for consumer products and tools. Typically the only value that innovative managers have in these companies is making the product incrementally cheaper and shittier. The value is that it makes room for quality competitors.
- nine_k 8y agoOne problem with this model is that competition exists. It requires to adjust the business model, or give away (a part of) the market. This sometimes produces waves of change (seen as painful and haphazard by the old staff), when new ways to run the company are invented to keep up with the competition. Then, with new stability, a new calcification phase comes, etc.
- ambicapter 8y agoAre you saying that as a company grows larger its business model becomes MORE precarious such that they can no longer afford experimentation or optimization of any kind?
- analog31 8y agoOne possible view is that a company grows to the point where it goes from being a recipient of investment, to a source of investment. Also, the managers get too far removed from innovation, to directly engage in or direct it. I work for a F500. The top brass of the company sincerely want us to move into new areas. So they just buy companies that are already innovating. People recognize the problem of big companies trying to innovate. One solution is to create isolated innovation teams that function more like smaller companies. I work in one of those teams.
- Lorkki 8y agoLet's not forget, that's essentially how much of the IT industry as we know it got started: companies like Western Electric, AT&T and Xerox hired people specifically to innovate.
- nostrademons 8y agoRelevant: https://www.ribbonfarm.com/2017/11/09/ceos-dont-steer/ https://www.ribbonfarm.com/2017/11/09/ceos-dont-steer/
- deleted 8y ago[deleted]
- sorokod 8y agoOversimplifying, this is analogous to simulated annealing optimization algorithm that initially tries various solutions - startup mode, and later converges to a (perhaps local) optimum - large company.
- groestl 8y agoYes, that's the image I had in mind. The cooling is provided by inflexibility, an emergent behavior of large organizations.