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Very interesting article, if you ignore the unnecessary jabs at Google, youngsters and the uncorroborated praise for GM. But there is an interesting point to n

Very interesting article, if you ignore the unnecessary jabs at Google, youngsters and the uncorroborated praise for GM. But there is an interesting point to note here : GM is not fundamentally the same as Google or other software companies of today. Companies which make physical goods, make more money through making more and more of the same thing. If they have done it many times, the process is well-understood and can be managed by a specialized person ( who specialises in management ) in a central way and that is probably more efficient. Software companies make money from making new and different things. To make a new copy of a software once it is written, all it takes is Ctrl + C and Ctrl + V, or make a new web request. These type of companies are probably more efficient if you simplify the communication structures enabling more collaboration. The well-understood parts ( such as Amazon warehouses, Apple's supply chain etc ) can still be managed using the old management style. The creative organizations can still use the new management style. You can see this style variation when the founders are ousted from the company and management is handed off to MBA folks ( Apple with John Sculley etc. ). Maybe by the time the founders from the new age tech companies have to pass the baton, the management schools of thought will catch up to this ( they already seems to be doing so ) and things won't be so bad as the author predicts.

Spooky23 12y ago
Google's output isn't code. Its monetized services -- search + tiny classified ads. The management people direct the output and make the deals. Engineers and programmers write the code that makes the machine work. At GM, engineers design the car and assembly people build the machines. There are more similarities than differences. GM (or any car company) uses robots to automate repetitive and error-prone human processes, just like a tech company does.
shas3 12y ago
Your analysis is too simplistic. Do you mean software companies have higher margins? Top 20 profitable companies in the US only include 3 'software' companies: http://www.bloomberg.com/visual-data/best-and-worst/most-profitable-in-technology-in-u-dot-s-companies http://www.bloomberg.com/visual-data/best-and-worst/most-pro... Scale-up is non-trivial in both software and non-software companies. Even among non-software companies, there is a ginormous amount of variability in terms of profitability and easy of scale up.
johan_larson 12y ago
Things change when an organization becomes big and established. When it get big, the people in charge can't run things directly, and have to rely on delegation and established procedures to get things done the way they want. And when a company no longer has to fight for its life every quarter, there is room for a world of distractions beyond getting things done. The question worth asking is whether this can be avoided. Is there a large, old company that manages to be vigorous and action-oriented rather than a mass of politics and process?

Spooky23 12y ago

Google's output isn't code. Its monetized services -- search + tiny classified ads. The management people direct the output and make the deals. Engineers and programmers write the code that makes the machine work. At GM, engineers design the car and assembly people build the machines. There are more similarities than differences. GM (or any car company) uses robots to automate repetitive and error-prone human processes, just like a tech company does.

shas3 12y ago

Your analysis is too simplistic. Do you mean software companies have higher margins? Top 20 profitable companies in the US only include 3 'software' companies: http://www.bloomberg.com/visual-data/best-and-worst/most-profitable-in-technology-in-u-dot-s-companies http://www.bloomberg.com/visual-data/best-and-worst/most-pro... Scale-up is non-trivial in both software and non-software companies. Even among non-software companies, there is a ginormous amount of variability in terms of profitability and easy of scale up.

johan_larson 12y ago

Things change when an organization becomes big and established. When it get big, the people in charge can't run things directly, and have to rely on delegation and established procedures to get things done the way they want. And when a company no longer has to fight for its life every quarter, there is room for a world of distractions beyond getting things done. The question worth asking is whether this can be avoided. Is there a large, old company that manages to be vigorous and action-oriented rather than a mass of politics and process?