Why big companies matter not

Just about every person who has read anything related to business in the past five or so years will not have been able to miss Clayton Christensen, the guy behind the concept of disruptions and disruptive technologies. His idea is that good companies fail because they are too good at serving their best customers and are not able to give proper value to underlying disruptions, which eventually dethrone said company.

He may have an idea, possibly because he's from Harvard but also possibly because it seems true in quite many cases. Now, I'll extend the trail of thought on why big companies fail. Or not necessarily why they fail but why they become uninteresting. It's related to physical attributes, namely the fact that by definition, big companies are BIG. That is, big as in fat. And fatness is not a good thing, since it makes moving difficult and all so slow and you break a sweat just by thinking of any type of action. Fat also attracts parasites. Parasites are especially annoying in big companies because they dig in and fortify themselves. They have their own nice sandbox via which they can suck wealth from the company and justify their existence.

Big companies also require tons of administrative positions. Management. The issue here is that when professional managers step in, they lose all touch with reality. Who the hell even knows what the customer wants. In some cases, entities from within the company start living a life of their own, doing things for the sake of doing things. Not because it increases customer value or because it increases shareholder value. But perhaps because when idle people are idle long enough, they get an urge to actually do something. And if they can't do anything intelligent, then they do the next best thing: type up Powerpoint slides and manage technologies. People start attending more and more meetings and becoming more busy and all the while, reality turns upside down and becomes distorted. This doesn't matter in a big company because the cash cows from yesteryear are still bringing in the cash and papers can be shuffled around at ever increasing speeds.

A total farce are the meetings which are attended by fortysomething people who are all management and who start making decisions. At some point they figure out that making technical decisions might require some understanding, and that it might just be better to make a rule saying that the meeting will not discuss any sorts of technical details. Only high-level stuff. Not that it would matter, since technology is now created in a vacuum, again not for the sake of the user or the customer but for the sake of doing things.

So, the big company starts living a life of its own. It does the same thing that it has always done, but it will not renew itself without massive layoffs and a strict diet and exercise routine. But it doesn't matter, because money keeps coming in and people can feel secure by pushing papers around. It may be that the company won't be able to understand or identify the disruptions. But it may also be that even though upper management says that it is committed to change, nobody really gives a damn. Hell, you might actually have to do something tangible if the status quo rocks.

But fear not, big companies are useful because while they once were cutting edge companies and on the edge of cool, they are now still able to provide commodity platforms. Somebody has to provide the base on which small companies can create the new cool. And the new cool is where there is no fat, because fat is not tolerated and extreme pragmatism is king. You solve a concrete problem with a tangible solution and demonstrate end-user value or you die. No safety nets, no Powerpoints, only solutions, services, and products. Responses are sharp and the small company can rapidly realign itself and reinvent itself without too much drama. And it is this reason why mid-management in established companies is afraid of the lean and mean approach. To cite Gordon Gekko, the norm in large corporations seems not to be survival of the fittest, but instead survival of the unfittest. Since the fit ones have already left to exploit the potential provided by the fat companies.

It is very simple: when the fat guy gets stuck in the door, you merely remove his wallet and go in through the window, leaving him to ponder about the greater things in life. But at least he won't die since he has plenty of nutrition around his stomach region...