Wednesday, February 22, 2017

Why mature organizations lose their steering wheel and reverse gears

The "Myth" of the organization life cycle




Myths are not so much "Truth" with a capital "T" or Fantasies with a capital "F" but Meta-truths.  Meta-truths give us a common paradigm that we can use as a basis for communicating.

Who are those stakeholders?
  • Owners who want dividends
  • Management who want palatial  corporate offices and prestige perks
  • Labor who organizes and want more money, time off, benefits
  • Municipalities who want landscaping and tax base
  • Politicians who can milk employees for donations 
  • Politicians who would reward their faithful henchmen with "spoils"
  • Charities (like United Way) who want donations
  • SJW who see the organization as a vehicle (and bankroll) for their social causes
  • Suppliers
  • Distributors

Adding baggage decreases agility.

Every one of those stakeholders is highly resistant to any change of direction, much less reversal.  Life is too good.

Their biggest enemy is not the organization.

Their biggest enemy is two guys in a garage.

Steak and sizzle
Steak pays the bills.  Sizzle is pure profit.

Executives and owners are compensated based on profit.  Consequently "sizzle" garners much of their attention.

The offerings in the marketplace, however you choose to define that, become larger, fancier, with more bells-and-whistles, more high tech.  Because sizzle is profit and profit puts more money in folk's pockets.

Consider 

The domestic auto industry being eclipsed by the Japanese imports in the early 1970s.
1600 pounds and $11,000 in 2016 dollars
3300 pounds and $23,000 base price...if you can find a base vehicle.
And now the Japanese are looking over their shoulder at the Koreans as they infiltrate the base market abandoned by the Japanese.
And lined up behind the Koreans are the Indians.  $3600 takes this baby home!


Other industries

The inescapable conclusion is that mature organizations are poorly incentivized or mentally prepared to offer bare-bones products and services.

The political and business climate
I am not a huge conspiracy nut.  But I can see why major stakeholders in mature organizations would HATE new start-ups.

There are countless barriers to entry that can be thrown across the path.
  • Regulations
  • Fees
  • Mandatory approvals before being able to market (FDA, for instance) 
  • Litigation
Pulling the cork out of the bottle threatens a lot of people's rice bowls.  And that totally disadvantages those of living on limited resources.

1 comment:

  1. If, big if, the two guys in the garage stay small, fend off the 'middlemen' and stay realistic, they have jobs and income for life. Get greedy, and it goes away in four-six years as the competition ramps up, as you've indicated.

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