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Evolution of Corporations: Similarities with Governments

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It used to be, the guy who ran the tribe was the toughest of the bunch. He carried the biggest club, he was the tallest, biggest, baddest, and meanest. It also used to be that the guy who started the company was the big cheese. He hired and fired at will, he had the big ideas, he was the alpha male of the workshop.
So what's changed?

Over time, the way we run our government has evolved. Depotism, while fine for small groups in live-or-die circumstances, sucked as a way of government for larger, more successful societies. I'm not making a moral point -- despotism simply wasn't effective. The absolute ruler couldn't be everywhere at once, couldn't know everything there was to know, and couldn't be everything he had to be.
So very quickly, the illusion of the absolute monarch was just that: an illusion. Even the most primitive tribes in darkest Africa were run as oligarchies -- the tribal chief had the title, but the inner cadre was the real power to the throne.
The same is true for corporations. Sure -- we all see the guy on the cereal box. I note that Lee Iacocca is back pitching Chrysler. The American society, in particular, reveres the big concept people: Ford, Edison, Carnegie. Not only did our heroes have great ideas, they put together execution teams that were superior to the competitors. This is the real truth you're not likely to read about: teams make the difference.
In the milieu of governments, even the best teams have their disadvantages. Soon, these blind spots became apparent. Teams have a tendency to engage in "group think" where key concepts and golden cows remain sacrosanct. When teams were right, they were great. But when teams were off-base, it was hard to know what was wrong.
In 18th century France, there were certainly groups responsible for keeping the peasants happy. Marie Antoinette's "Let them eat cake" illustrated the way that leadership teams get out of touch. Likewise, the British Empire in 1776 had vast departments concerned with governing colonial territory. Surely, the thinking went, we are providing needed civility and governance to areas of the world that need it.
Teams were great. Teams built the huge governmental structures of the day, and teams continue to work wonders in world governments. But good teams and good execution is not the be-all-end-all that they were 400 years ago.
I the world of business, teams are repeating the same story. Highly-focused, high-execution teams are capable of miracles in today's marketplace. But soon enough, the intrinsic, hidden concepts of these teams turns out to be their greatest downfall. How many dot-coms got out of the starting gate, found a market and made sales, only to reach nowhere near their optimal markets? How many local mom-and-pop shops expanded to several stores, only to fall apart (or hit the wall) years later?
So what is the solution? Is the Big Picture man not part of the picture anymore? Is the execution team severely limited?
What happened in government is this: constant process feedback and internal competition for leadership. We started off with changing up leadership: it's common knowledge that every four years we elect a president. Likewise, board of directors supposedly elect and control a CEO team, although we all know the incestuous relationship common in many board rooms.
In the political world, we are always talking about how we do things: is the solution to poverty education? Support? Free money? Likewise we have an instant measurement of what is the most important thing to work on: the opinion poll.
This is what is needed desperately in the corporate world. Not market research, not branding, not strong leadership, not great execution. We excel in all of these areas.
I invented the MAT because I feel that what we need so much in modern mega-corporations is the ability to constantly poll the key stakeholders, the people doing the work, for what is the biggest thing that needs to be fixed. I'm not saying that we change corporations into direct democracies: heavens forbid! What I AM saying is that in order for our brilliant leaders, our fantastic execution teams to work, they must have direct feedback about where they are blind. This feedback can be then be used to control marketing, branding, sales, and all the other critical areas that keep the lights on.

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This page contains a single entry by DanielBMarkham published on August 7, 2005 2:21 PM.

Hydrogen Power Update was the previous entry in this blog.

AJAX: Get Your Head Outta the Can is the next entry in this blog.

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