The Slow Decline of Companies

In Seth Godin's latest blog he mentions how company's almost always melt, they rarely explode. It is almost always the short-term thinking of today that causes the crisis of tomorrow. 

Rarely in the moment, when business is down and your customers are no longer engaged can a corporation look back and find the reason. That's because it's multiple little reasons that were made in years past for short-term gains that lost the customers trust. 

Trust in a personal relationship is hard to regain, but trust in a consumer to business relationship is almost impossible to regain. 

11 Ways Big Companies Undermine Innovation

In centuries past, explorers searched for the legendary city of El Dorado, where everything was made of gold. Today, at large organizations, innovation is the new El Dorado.

This is exactly why Microsoft is struggling with innovating Windows.   

Running Corporations as Autonomous Business Units?

Lampert runs Sears like a hedge fund portfolio, with dozens of autonomous businesses competing for his attention and money. An outspoken advocate of free-market economics and fan of the novelist Ayn Rand, he created the model because he expected the invisible hand of the market to drive better results. If the company’s leaders were told to act selfishly, he argued, they would run their divisions in a rational manner, boosting overall performance.

It amazes me there are not more companies copying what Apple has done from an organizational structure.  Apple doesn't let each business unit run as an individual business, in fact they don't even own their own P&L.  This allows them to move resources and work more autonomously as a team, rather than infighting and creating different tribes within the organization. 

The divisions turned against each other—and Sears and Kmart, the overarching brands, suffered. Interviews with more than 40 former executives, many of whom sat at the highest levels of the company, paint a picture of a business that’s ravaged by infighting as its divisions battle over fewer resources….  [one former executive said it created a] “warring tribes” culture. “If you were in a different business unit, we were in two competing companies,” he says. “Cooperation and collaboration aren’t there.”

This doesn't surprise me at all.  I've seen it many times in my career in smaller organizations, watching all the tribes compete with each other.  The battle is outside of the organization, not within.