When a company has been around for long enough the focus hopefully shifts from creating new products and services to refining operations. That’s absolutely reasonable because the hard part is finding product-market fit, otherwise known as actually having money and opportunity for once. So when you have it, all you want to do is scale that success. Scale means more revenue but it also means fulfilling larger demands from customers and a slight logistical nightmare. Employees move from wearing multiple hats to specializing & becoming ridiculously good in one specific area. What was once a motley crew of a few individuals easily trading information now becomes a complex array of processes, systems and people that need to be managed.
Once that beast of a structure is developed hardly anyone wants to mess with it again, unless it’s to cut costs. At a certain point it’s hard to reach new customers, so to continue to increase profitability the focus shifts yet again to the other side of the equation. In a way that’s easier because an organization has more control over how it functions than the decisions of consumers.
The problem with this is you can only cut costs to an extent. Worse yet, now you’ve got this super rigid way of working that is devoid of creativity. You’ve hired people who are hard-working and amazingly good at one thing and do only that one thing day in and day out. They might even lack interaction with other departments or understanding of how the business functions as a whole. Their entire world is this bubble that was intentionally created for them.
That’s how silos emerge. Strangely silos have a weird way of creating duplication. Since communication has started breaking down it takes a whole chain of hierarchy for one department to talk to another at that regularly scheduled update meeting. Decisions need to be made faster, so different areas of the business take it upon themselves to build their own versions of the same functionality. Hopefully someone overseeing the organization as a whole gets wind of this and institutes more of a shared services mindset.
However, there are problems with shared services too. Now they’re competing with the varying priorities of each business line which means time frames to process even simple tasks extend to weeks, maybe even months. There’s simply too much work coming in and it’s hard to know what should be pushed out first. In some organizations each request is treated exactly the same. That’s when the organization stops being nimble. When agility is lost, shifting customer needs are most likely not being served and collaboration with startups seems daunting at best and impossible at worst.
Over time, what was a growth mindset becomes fixed and permeates company culture. Now employees believe they are only allowed to do their specific role. They fear being chastised for stepping out of bounds, whether that fear is real or imagined. Stay in your lane. Don’t color outside the lines. Peeking outside your box is not permitted, let alone thinking.
Territory battles might even begin to ensue because those silos we talked about are ruled by mini corporate deities who struggle to maintain their power. It’s like an episode of Game of Thrones in designer suits where the tools of warfare consist of strategic plans and business cases. When costs need to be cut they’re duking it out among themselves like frenemies, instead of colleagues. This spills over from leadership into the trenches of the doers. After all, quality of life at work – bonuses, promotions, who gets what cubical – is determined by your boss. Please the boss, fit into that mold, and life will be better, or at least not unbearable, hopefully.
Now we’ve got a company full of drones trying to climb their way up the ladder. Each striving for titles, power, and money instead of communal goals. That’s the promised-land, right? The corner office, calling the shots. But even the big fish have problems. Being Cersei Lannister is no picnic. Nobody dreams of being villainized, unable to have a moments joy because that amounts to weakness. It’s even worse if the company is publicly traded because leadership is so focused on proving to shareholders that past performance was good that they’re not able to spend as much time on what they used to, opportunities for growth.
This is where the “disruption” comes in. Now the organization, with all its resources, cannot create new things. It might be okay at minor improvements, especially if they’ve hired a consultant to “fix” their problems. However bigger changes require real leaders on the inside.
This was all well and good prior to the internet revolution. Technology wasn’t drastically changing expectations. People were used to the status quo taking a long time to evolve. Hence, saying the organization has operated in the same way for 100 years was a point of pride steeped in tradition. The older the organization, the more likely it was to be secure in its status as a market leader and reliably wield power. Leaders of established companies, like Blockbuster, foolishly believed that past performance was a good predictor of future performance.
Nowadays a large organization needs to move just as fast as a small one and we’ve finally figured out how. So if this scenario sounds familiar, don’t worry, there is hope. You can still #valorup