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Is this a classic middle management malaise where everyone gets paid so well they don’t want to stir the pot? The bureaucracy and protection of today’s money co

by dmix 4y ago

Is this a classic middle management malaise where everyone gets paid so well they don’t want to stir the pot? The bureaucracy and protection of today’s money cows which only clouds them from seeing tomorrow’s cows that will rescue them from certain obscurity? The Clayton M Christensen solution to big companies ignoring obvious problems is to have isolated small teams “infrapreneurship” who aren’t under the pressures of the larger org. With Meta’s push towards VR it’s obvious Oculus’s purpose is now Meta’s purpose. And all the downside that comes with such a thing.

dinvlad 4y ago
Sadly, there're very few modern examples of big companies following this solution.
- blululu 4y ago
  There are lots of companies that entertain this solution. There are just very few examples of it working for the simple reason that this advice generally doesn't work. We look at the one company that succeeds and "say why didn't we just do that?" without remembering that there were 10 other startups that failed. The more reliable solution is to use the same wisdom of hindsight to pick winners and just buy out the one that succeeds. Facebook bought instagram, but none of their internal efforts have produced anything so useful.
  - dinvlad 4y ago
    Hmm, could you give a few famous examples that “failed”?
- nrp 4y ago
  Cisco tried a fairly extreme version of this, but a new CEO put an end to it due in part to morale damage in the bulk of the company not working on those projects: https://www.ft.com/content/a81c934c-cb31-11e9-af46-b09e8bfe60c0 https://www.ft.com/content/a81c934c-cb31-11e9-af46-b09e8bfe6...
mnky9800n 4y ago
How does this solution work? Does every team work this way? Is there no HR but only local administration? Or is it only a few teams who get this privilege? How do you avoid us vs. Them mentality in that situation?
- dmix 4y ago
  Well most of the company still needs to keep the cash cow running. So it’s only 10% of the company at most typically. You just have to have your future bets simultaneously be taken serious and isolated from the middle management and cyclical swings of the parent company. Often companies get excited about a new idea, staff and finance them well… then after a year or two they get thrown into the wider system and expected to survive. Eventually they are absorbed and managed as if they are the old cash cow, needing layers of management, risk adversion, accelerated timelines, and new ‘processes’ to fix every small problem instead of focusing on the bigger picture.
  - urthor 4y ago
    Sound like the solution is incredibly straightforward. Spin "the other bets" out as a separate company. Capitalize it separately. Literally just don't have it as part of the parent company. The only advantage of having the company inside the "parent" increasingly becomes accounting tricks. Concealing excess profits via shuffling them to the "other bet" is the biggest trick of them all. All publicly listed companies actively hide profits from shareholders. Who might want the capital as a dividend.
    - blippage 4y ago
      > Spin "the other bets" out as a separate company. Aha, glad somebody is seeing the same thing I'm seeing. The problem with Google is that it is too large, and too successful. Their idea of having experimental projects is a good one, the problem is that Google makes so much money that they don't commit to them. They become too dilettante about them. The fix is to do spin-offs, say keeping a minority stake at less than 20%. This generates capital for Google, gives them a share of the upside, but they don't have too much influence on the spin-off. So it's Death or Glory for the spin-off. They are forced to make whatever it is they invented work, or face extinction. There is a smaller management team, focussed on success. This strikes me as a much better proposition than what we see at the moment, with Google just dabbling around pouring money into something they'll eventually get bored with. You'd think that what with all the big brains at Google, someone would have thought of this. Maybe someone at Goldmans should make a pitch.
solardev 4y ago
Is that how Google ended up with eight chat apps while Search gets worse and worse every year?
- canadianfella 4y ago
- dmix 4y ago
  Monopolies tend to stick around much longer than other industries despite their lack of competence. Clayton’s book was mostly about Intel which operated in a competitive market with AMD and others. DuckDuckGo is great but it’s not nipping at their heels meaningfully.
  - bobthepanda 4y ago
    It takes a long time for any company to die, period. WeWork (or I guess now Twitter) style rapid flameouts are very rare. Most corporate deaths look like Sears. The writing on the wall was there for over two decades.
    - master_crab 4y ago
      On the wall for two decades?! Hell it was there for four decades, double that time. Walmart was running circles around Sears by the 70s.
      - lumost 4y ago
        I kinda wonder if there is a type of employee who likes working at dying firms. Every year their job gets easier with fewer demands. Failure becomes kinda expected.
        doktorhladnjak 4y ago
        I’m reminded of someone I met at a party who actually worked for Sears. They’d spent many years at Amazon on the retail side of the business, in the earlier days of Amazon. Sears hired several people with this background in Seattle to turn their business around. Pretty quickly, they figured out upper management had no interest in their ideas to make Sears into a viable online retailer. Everybody left or started coasting. They all knew the company was doomed but cashed their paychecks. After all, that’s literally what they were being paid to do.
mathgladiator 4y ago
This is it. No one is restless, and ruthless pragmatism runs things. I was fortunate as I joined a team that was growing and had heat under them which gave me opportunities to go ham in a space I care about.
- osigurdson 4y ago
  >> ruthless pragmatism I hadn't heard this this term before but I think it is pretty accurate in many organizations. Nothing is worth doing as its impossible to prove ROI conclusively - just do what the boss says instead.
jauer 4y ago
Part of the problem is that Oculus has all the overhead from Meta’s regulatory compliance burden, so they can’t escape some of the most frustrating pressures.
- rightbyte 4y ago
  Regulatory compliance would be quite easy by just not doing spywares.
  - jauer 4y ago
    Meta could have a subsidiary that does nothing but stamp out manhole covers. That subsidiary would have a far higher compliance burden than any other manhole cover manufacturer. Their past choices have consequences. It’s too late for them to “just not” do anything to reduce that burden.
dmix 4y ago
Intrapreneurship*
nunez 4y ago
The only experiences I've seen of intrapreneurship didn't solve these problems, since funding was guaranteed and their leadership basically worked for the "parent" company.
- deleted 4y ago
  [deleted]
berniedurfee 4y ago
This sounds like “Success Theater,” where everyone always reports green lights up the chain of command, until it’s too late and the show ends abruptly and poorly. It’s a poison that seems to seep into organizations as they get larger. I once gave a talk about “Enterprise Entrepreneurs” after being labeled as one. It can be a good approach to prevent stagnation as grass-roots initiatives often generate great ideas in large companies. Unfortunately the practice requires executive sponsorship, which can be hard to attain if executives feel *their position and stature is being undermined by subordinates.
- pharmakom 4y ago
  I’ve never understood “enterprise entrepreneurs” or “intrapreneurship” from the perspective of the employee. The massive potential upside for a success just isn’t there compared to founding your own start-up, so why do it?
  - dmix 4y ago
    The best answer I could come up with: it's not your typical employees who are going to be doing that. Employees are employees. Typically you want someone who is about to leave the company because they are bored and want to do something interesting...and they have an idea (or you give them an idea) that excites them. So instead of VCs you invest company capital into them. Obviously 99% of the time employees just leave and startups win the day. Which is fine. But that's basically just how it is. So you either adapt or die until the monopoly/cash cow runs its course. Facebook turning into Meta making the 'startup' be the whole companies mission is a bold new idea, which I'm skeptical can work. But it's interesting.
  - rahoulb 4y ago
    Risk. The company takes the risk rather than you personally. If it fails but you maintain good relations with the rest of the company you lose nothing and just transfer elsewhere (I guess, I’ve never worked at a big company preferring to go it alone)
    - 4y ago

by dmix 4y ago

dinvlad 4y ago

Sadly, there're very few modern examples of big companies following this solution.

blululu 4y ago
There are lots of companies that entertain this solution. There are just very few examples of it working for the simple reason that this advice generally doesn't work. We look at the one company that succeeds and "say why didn't we just do that?" without remembering that there were 10 other startups that failed. The more reliable solution is to use the same wisdom of hindsight to pick winners and just buy out the one that succeeds. Facebook bought instagram, but none of their internal efforts have produced anything so useful.
- dinvlad 4y ago
  Hmm, could you give a few famous examples that “failed”?
nrp 4y ago
Cisco tried a fairly extreme version of this, but a new CEO put an end to it due in part to morale damage in the bulk of the company not working on those projects: https://www.ft.com/content/a81c934c-cb31-11e9-af46-b09e8bfe60c0 https://www.ft.com/content/a81c934c-cb31-11e9-af46-b09e8bfe6...

mnky9800n 4y ago

How does this solution work? Does every team work this way? Is there no HR but only local administration? Or is it only a few teams who get this privilege? How do you avoid us vs. Them mentality in that situation?

dmix 4y ago
Well most of the company still needs to keep the cash cow running. So it’s only 10% of the company at most typically. You just have to have your future bets simultaneously be taken serious and isolated from the middle management and cyclical swings of the parent company. Often companies get excited about a new idea, staff and finance them well… then after a year or two they get thrown into the wider system and expected to survive. Eventually they are absorbed and managed as if they are the old cash cow, needing layers of management, risk adversion, accelerated timelines, and new ‘processes’ to fix every small problem instead of focusing on the bigger picture.
- urthor 4y ago
  Sound like the solution is incredibly straightforward. Spin "the other bets" out as a separate company. Capitalize it separately. Literally just don't have it as part of the parent company. The only advantage of having the company inside the "parent" increasingly becomes accounting tricks. Concealing excess profits via shuffling them to the "other bet" is the biggest trick of them all. All publicly listed companies actively hide profits from shareholders. Who might want the capital as a dividend.
  - blippage 4y ago
    > Spin "the other bets" out as a separate company. Aha, glad somebody is seeing the same thing I'm seeing. The problem with Google is that it is too large, and too successful. Their idea of having experimental projects is a good one, the problem is that Google makes so much money that they don't commit to them. They become too dilettante about them. The fix is to do spin-offs, say keeping a minority stake at less than 20%. This generates capital for Google, gives them a share of the upside, but they don't have too much influence on the spin-off. So it's Death or Glory for the spin-off. They are forced to make whatever it is they invented work, or face extinction. There is a smaller management team, focussed on success. This strikes me as a much better proposition than what we see at the moment, with Google just dabbling around pouring money into something they'll eventually get bored with. You'd think that what with all the big brains at Google, someone would have thought of this. Maybe someone at Goldmans should make a pitch.

solardev 4y ago

Is that how Google ended up with eight chat apps while Search gets worse and worse every year?

canadianfella 4y ago
dmix 4y ago
Monopolies tend to stick around much longer than other industries despite their lack of competence. Clayton’s book was mostly about Intel which operated in a competitive market with AMD and others. DuckDuckGo is great but it’s not nipping at their heels meaningfully.
- bobthepanda 4y ago
  It takes a long time for any company to die, period. WeWork (or I guess now Twitter) style rapid flameouts are very rare. Most corporate deaths look like Sears. The writing on the wall was there for over two decades.
  - master_crab 4y ago
    On the wall for two decades?! Hell it was there for four decades, double that time. Walmart was running circles around Sears by the 70s.
    - lumost 4y ago
      I kinda wonder if there is a type of employee who likes working at dying firms. Every year their job gets easier with fewer demands. Failure becomes kinda expected.
      - doktorhladnjak 4y ago
        I’m reminded of someone I met at a party who actually worked for Sears. They’d spent many years at Amazon on the retail side of the business, in the earlier days of Amazon. Sears hired several people with this background in Seattle to turn their business around. Pretty quickly, they figured out upper management had no interest in their ideas to make Sears into a viable online retailer. Everybody left or started coasting. They all knew the company was doomed but cashed their paychecks. After all, that’s literally what they were being paid to do.

mathgladiator 4y ago

This is it. No one is restless, and ruthless pragmatism runs things. I was fortunate as I joined a team that was growing and had heat under them which gave me opportunities to go ham in a space I care about.

osigurdson 4y ago
>> ruthless pragmatism I hadn't heard this this term before but I think it is pretty accurate in many organizations. Nothing is worth doing as its impossible to prove ROI conclusively - just do what the boss says instead.

jauer 4y ago

Part of the problem is that Oculus has all the overhead from Meta’s regulatory compliance burden, so they can’t escape some of the most frustrating pressures.

rightbyte 4y ago
Regulatory compliance would be quite easy by just not doing spywares.
- jauer 4y ago
  Meta could have a subsidiary that does nothing but stamp out manhole covers. That subsidiary would have a far higher compliance burden than any other manhole cover manufacturer. Their past choices have consequences. It’s too late for them to “just not” do anything to reduce that burden.

dmix 4y ago

Intrapreneurship*

nunez 4y ago

The only experiences I've seen of intrapreneurship didn't solve these problems, since funding was guaranteed and their leadership basically worked for the "parent" company.

deleted 4y ago
[deleted]

berniedurfee 4y ago

This sounds like “Success Theater,” where everyone always reports green lights up the chain of command, until it’s too late and the show ends abruptly and poorly. It’s a poison that seems to seep into organizations as they get larger. I once gave a talk about “Enterprise Entrepreneurs” after being labeled as one. It can be a good approach to prevent stagnation as grass-roots initiatives often generate great ideas in large companies. Unfortunately the practice requires executive sponsorship, which can be hard to attain if executives feel *their position and stature is being undermined by subordinates.

pharmakom 4y ago
I’ve never understood “enterprise entrepreneurs” or “intrapreneurship” from the perspective of the employee. The massive potential upside for a success just isn’t there compared to founding your own start-up, so why do it?
- dmix 4y ago
  The best answer I could come up with: it's not your typical employees who are going to be doing that. Employees are employees. Typically you want someone who is about to leave the company because they are bored and want to do something interesting...and they have an idea (or you give them an idea) that excites them. So instead of VCs you invest company capital into them. Obviously 99% of the time employees just leave and startups win the day. Which is fine. But that's basically just how it is. So you either adapt or die until the monopoly/cash cow runs its course. Facebook turning into Meta making the 'startup' be the whole companies mission is a bold new idea, which I'm skeptical can work. But it's interesting.
- rahoulb 4y ago
  Risk. The company takes the risk rather than you personally. If it fails but you maintain good relations with the rest of the company you lose nothing and just transfer elsewhere (I guess, I’ve never worked at a big company preferring to go it alone)
  - 4y ago