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What I wonder is, how much of this is simply inevitable? As a company grows larger it is bound to have more bureaucracy and become more sluggish. The best and b
by jakarta 16y ago
What I wonder is, how much of this is simply inevitable? As a company grows larger it is bound to have more bureaucracy and become more sluggish. The best and brightest, especially those looking to work somewhere that is more agile will inevitably leave which causes a slow and painful brain drain in the company.
I have to think this has happened at most other tech companies in the past. I am sure at one time, Microsoft was looked at as a great place to work. Apple may have experienced a similar brain drain, especially in the 90s when Steve Jobs was out.
Then I have to wonder how you can counteract it. The only thing I can really think of is maybe if you ran the company like a decentralized flat organization where teams/products are virtually autonomous. I can only think of maybe one case where this has worked out, but its outside of tech.
- ashot 16y agowhat case are you referring to?
- jakarta 16y agoBerkshire Hathaway. Almost all of the business units are run by hungry entrepreneurs that live and breathe the business. They sold to Berkshire as a means of cashing out but most of the managers love to compete and stay on. As a result, they get to operate with an unusually high level of autonomy, I believe some of the managers only communicate with the home office once a year. I think though the only reason that works is because Berkshire is buying great businesses with great managers at the helm. When you get into turnarounds/distressed businesses you end up having to roll up your sleeves and get involved much more frequently.
- nostrademons 16y agoIf you want to run a decentralized conglomerate, you have to look at what service you're providing the managers who actually run the business units. Otherwise, they're better off remaining independent, and you'll end up with a portfolio of mediocre businesses that consume more than they produce. For Berkshire Hathaway, that service is liquidity. Buffett provides businesses with a large lump sum of cash, enough to ensure that they and their heirs will never have to work again unless they choose to. In return, they can continue running the business exactly as they did before. For many entrepreneurs, that's a very useful service.
- Charuru 16y agoThe solution is to spin off sections of the company, so that the parent works more like a holding company.