In a 2009 article by Julian Birkinshaw and Suzanne
Heywood they highlighted how “too big to fail, became the mantra during the
recent economic crisis. As markets and public confidence plunged, political and
financial leaders agreed to pump billions of taxpayer dollars into major
financial institutions, insurance and auto companies, keeping them on life
support until someone could figure out how to save them for the long term. But
does it make sense to bring these giants back to life if the underlying illness
isn't cured? What if, in addition to being ‘too big to fail,’ some of these
companies were also too big to manage?”
The problem with large organisations is that the
vision and standards of the CEO, however strong they may be, can be diluted and
changed as you progress down the organisation structure into politically
managed silos that have created their own ‘environment’ to work in – where some
of these environments can be highly functional and others highly dysfunctional.
In fact one of the most common phrases that you’ll
hear in many large corporates is the word ‘dysfunctional’ where as Birkinshaw
and Heywood highlight the name gives it away. “This type of complexity is
simply bad. It makes work more difficult and doesn't create value, nor does it
mitigate risks. Our research suggests that dysfunctional complexity creeps into
a company over years through the perpetuation of practices that are no longer
relevant, through the duplication of activities due to mergers or
reorganizations, and through ambiguous or conflicting responsibilities.”
As organisations expand above the 1 billion pound or
dollar mark there seems to be some tacit agreement amongst researchers that performance
actually declines at the employee level and forms of dysfunction are easily
spotted within parts of the organization as managers, especially over-promoted
managers, create their own power silos through clever posturing within their
reporting ranks.
These silos create the dysfunctional environments
that breeds demotivation, lack of innovative thought and under performance. And
these large corporates can be compared to large government structures, where
individual managers create their own ‘nests’ to look after their own
self-interest, often at the expense of the organisation’s overall strategy and
vision.
As Birkinshaw and Heywood suggest, “getting rid of
complexity can be difficult. Executives can disagree, for example, about the
root causes of dysfunction. For some companies, consensus-based decision-making
may be seen as a defining strength, and so worth the extra time and effort.
Other companies may just find the process slow and unwieldy and prefer having
fewer people involved. The time and effort involved in figuring out what is
dysfunctional and what is designed complexity also may simply outweigh the
benefits. The size of the prize has to be substantial before you put your
employees through a major restructuring.”
Another classic behavioural trait in a large
corporate (as well as other sized organisations) is that the best people want
to share their ideas and have them listened to. However, a lot of companies
have a vision/strategy which they are trying to execute against and often find
opposing voices to this strategy as an annoyance and a sign that someone’s not
a ‘team player.’ If all the best people are leaving and disagreeing with the
strategy, you’re left with a bunch of ‘yes’ people saying the same things to
each other. Leaders have got to be able to listen to others’ points of view,
always incorporating the best parts of these new suggestions.
It’s within these weird, large corporate environments
that really good potential future leaders can be found, but they turn out to be
people who never get the chance to raise their head above the parapet, as the
current leadership is all too well aware of the danger a good, passionate
leader could have on their cozy environment.
So be wary of the super large corporate structure
and be prepared to learn new behavioural skills to survive in this often toxic
political environment where ‘who you know and who you suck up too’ can be more
important than your skills, experience and day to day performance.
References
Birkinshaw, J. and Heywood, S. (2009). The Wall
Street Journal. 26th October.
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