Archive for February, 2011|Monthly archive page

Why do some large organizations fail?

In Uncategorized on February 1, 2011 at 6:50 am

There are some lessons to be learned from successes. There are far more lessons to be learned from failures. A group of ambitious people start a company with a great product idea. The company is successful and expands. As the company grows, there is turf war. The focus shifts. Instead of taking risk and launching great products, the focus is on job security. In some situations, this behavior is so pronounced that any risk takers are managed out of the company. This sends a clear message to the rest of the team. They just do what they are told to do. Besides, why would people take risks when there is no associated reward (promotion, bonus, etc) and when they have a chance of getting fired?

In an open environment that nourishes innovation, the employees are happy. They don’t have to fear for their jobs or go through a ton of red-tape to develop their ideas. The team produces great products that helps the company overcome competitive pressure. The company does well and stays profitable. However, in many large organizations, this has just become a day dream. Consequently, there is layoffs and job insecurity. This triggers a downward spiral. In an insecure environment, people avoid risks. This impacts innovation and the company eventually becomes less profitable, triggering more layoffs.

Unfortunately, many leaders in large organizations are biased and like to think that they would NEVER turn down a good idea or NEVER build territories. If they have open and honest conversations with their employees, they will be surprised and shocked. Hope this blog makes at least a small difference in some of your thoughts and actions.

Have you ever had your valuable idea rejected? Have you spent more time on red-tape than it would take to develop the product? Have you thought that the risk is not worth the reward? I’d like to hear your experiences and thoughts in the comments sections below…