The New York Times just profiled Jim Collins and his soon to be published book “How the Mighty Fall”. He is no stranger to any one who is a student of management. His ground-breaking books “Built to Last” and “Good to Great“* are mandatory reads on most book lists.
The article proved to be a nice afternoon read and a reminder of some pointed weaknesses that we in management are often prone to relax toward. Namely, “organizational empire building” and “creating management complexity”. In the former, creating armies and empires is simply ‘good’ organizational politics. And it leads to “creating management complexity” or “why I have a job” processes and work activities. The latter is more subtle and dangerous to the organization. Instead of creating efficiencies, it creates bureaucratic blackholes, “consensus” decision making, and little Dilbert worlds everywhere.
It also contributes mightily to the how company’s fall down or simply fail in the long term. This is like slow corporate death by poison or asphyxiation and is something that managers and leadership simply should not tolerate – at any point. Once you’ve built up this empire, it’s hard to take it apart unless there’s an overriding external factor (like our current economic crisis) that causes the organization to finally take it’s own bitter medicine. But maybe the cancer will prove fatal.
Hence, I really liked this blurb:
This orientation — a willingness to say no and focus on what not to do as much as what to do — stems from a conversation that Mr. Collins had with one of his mentors, the late Peter F. Drucker, the pioneer in social and management theories.
“Do you want to build ideas first and foremost?” he recalls Mr. Drucker asking him, trying to capture his mentor’s Austrian accent. “Zen you must not build a big organization, because zen you will end up managing zat organization.”
Therefore, in Jim Collins’s world, small is beautiful.
Most definitely. Business is better when you can make USD100M with 10 people than USD500M with 1500 people or USD 1B with 10,000 people. Now, perhaps size matters in the corporate world and in the capital markets and hence why I’m not in an meaningful leadership position to cause great shareholder damage…nevertheless, productivity, efficiencies, can allow for excellent corporate profits and provide cubicle monkeys everywhere an enjoyable existence making OPM (Other People’s Money). At the end of the day, management is not about managing organizational complexity – you’re not in the business of creating layers of mid-level managers to manage even more mid-level managers and more organizational chaos and complicated processes to do simple things: make profits, deliver projects, create corporate and social value, provide social growth etc.
Let’s keep organizational bloat to a minimum. As Peter Drucker said in his classic “The Effective Executive“, the following corporate diseases:
Overstaffing
There is a fairly reliable symptom of overstaffing. If the senior people in the group…spend more than a small fraction of their time, maybe one tenth, on “problems of human relations,” on feuds and frictions, on jurisdictional disputes and questions of co-operation, and so on, then the work force is almost certainly too large. People get into each other’s way. People have become an impediment to performance, rather than the means thereto. In a lean organization people have room to move without colliding with one another and can do their work without having to explain it all the time.” (pp.43-44)
Malorganization
Meetings are by definition a concession to deficient organizations. For one either meets or one works. One cannot do both at the same time. In an ideally designed structure…there would be no meetings. We meet because people holding different jobs have to cooperate to get a specific task done. we meet because the knowledge and experience needed in a specific situation are not available in one head, but have to be pieced together out of the experience and knowledge of several people. (pp 44-46)
I fear that if we don’t do this then we will be fodder for Jim Collin’s “How the Mighty Fall”. Certainly there’s no shortage of exhibits in the recently 18-24 months and counting. And would avoid the unpleasant top-to-bottom reviews of current organizational structures by so many mid-level managers to make the difficult choices before, now, and in the future.
One would pay heed to this cartoon on survival and organizational effectiveness…or simply how complexity kills.
Complexity Kills
In case all this doesn’t make sense (trust me, so many people simply do not get it, let alone do it), read Eduardo Castro-Wright’s views on this – In a Word, He Wants Simplicity. Walmart isn’t such a bad example after all.
* See Good to Great’s critique by Business Pundit. I agree with many of his points and I too frankly was let down by the book – I read it as part of my corporate training. It’s just not that vigorous by way of clear thinking. Nevertheless, the book is/can be useful to frame a management’s thinking of common business problems when often management does not think enough. The criticism of Good to Great is a rather nice lead into his appropriately timed next book “How the Mighty Fall”.
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