4 ms·

This article is fairly tendentious, but the story itself is interesting and was well-covered in a Bloomberg Businessweek article here: http://www.businessweek.c

This article is fairly tendentious, but the story itself is interesting and was well-covered in a Bloomberg Businessweek article here: http://www.businessweek.com/articles/2013-07-11/at-sears-eddie-lamperts-warring-divisions-model-adds-to-the-trouble http://www.businessweek.com/articles/2013-07-11/at-sears-edd... I'm not a Rand disciple, but organizational experimentation like what Eddie Lampert did is a good thing, even though it's been a failure in this case. We know so little about human organizations generally, and so few have been tried, that it borders on insanity to argue that the large business corporation, a form that has existed for only a couple centuries, has been perfected. Specifically, they nearly always have a CEO on top who has the power and trappings of an absolute monarch issuing orders to courtesans, who do the work or delegate the work to lieutenants, who do the work or delegate to lieutenants, etc. Are we so unimaginative that we think this is the SOLE way of doing things? Consider, for example, Valve's success with their novel organizational structure, what Michael Church calls "open allocation."

r00fus 13y ago
> We know so little about human organizations generally, and so few have been tried, that it borders on insanity to argue that the large business corporation, a form that has existed for only a couple centuries, has been perfected. This is hardly a valid rationale for saying that what Lampert did was a good thing. Unless you're going by the "fail upwards" strategy. The embodiment of an ideal is only as good as it's execution. Lampert's was clearly a failure. How can you call what he did as "good"? At best he was attempting a Sisyphean task (Merging Kmart and Sears), but then again, that was his idea as well. Ultimately, I fail to even see that Lampert was punished for his failure - nothing in the article says that this corporate raider didn't do exactly what he intended - i.e., to profit by the destruction of companies.
- thucydides 13y ago
  Unless we have good reason to believe the standard CEO-as-monarch structure is perfect, experimentation is a good thing. Moreover, his basis for suspecting his particular experiment might work was reasonable, since he was basically applying by analogy a standard neoclassical model of how a market at large works to his individual business. Before he implemented the structure, would I have expected it to fail? Yes, but I expect most start-up ideas to fail, too. You never know. We can't forget that we learn as well from negative results as from positive results. Solid analysis of Lampert's failure here helps all of us, because we can see a little bit better what pitfalls to avoid in our own organizational structures. Admittedly, however, it is probably unwise to play radical, untested games with the fundamental structure of a large and mature business, only because the losses can be so much larger and more catastrophic. Better to test the idea in a small or medium-sized business first. But it's a good thing for people to experiment generally, and we learned here nonetheless. It would be unfortunate if the only lesson future business leaders took from this episode is never to deviate from the monarchical model of corporate governance.

r00fus 13y ago

> We know so little about human organizations generally, and so few have been tried, that it borders on insanity to argue that the large business corporation, a form that has existed for only a couple centuries, has been perfected. This is hardly a valid rationale for saying that what Lampert did was a good thing. Unless you're going by the "fail upwards" strategy. The embodiment of an ideal is only as good as it's execution. Lampert's was clearly a failure. How can you call what he did as "good"? At best he was attempting a Sisyphean task (Merging Kmart and Sears), but then again, that was his idea as well. Ultimately, I fail to even see that Lampert was punished for his failure - nothing in the article says that this corporate raider didn't do exactly what he intended - i.e., to profit by the destruction of companies.

thucydides 13y ago
Unless we have good reason to believe the standard CEO-as-monarch structure is perfect, experimentation is a good thing. Moreover, his basis for suspecting his particular experiment might work was reasonable, since he was basically applying by analogy a standard neoclassical model of how a market at large works to his individual business. Before he implemented the structure, would I have expected it to fail? Yes, but I expect most start-up ideas to fail, too. You never know. We can't forget that we learn as well from negative results as from positive results. Solid analysis of Lampert's failure here helps all of us, because we can see a little bit better what pitfalls to avoid in our own organizational structures. Admittedly, however, it is probably unwise to play radical, untested games with the fundamental structure of a large and mature business, only because the losses can be so much larger and more catastrophic. Better to test the idea in a small or medium-sized business first. But it's a good thing for people to experiment generally, and we learned here nonetheless. It would be unfortunate if the only lesson future business leaders took from this episode is never to deviate from the monarchical model of corporate governance.