All that is born must die
“No one and nothing, remains the same
Everyone has to learn to say goodbye
Everything changes in fact and in time
All that is born must die
They Wonder What Changed
- David Whalen
Corporations
and Organizations are no different than biological organisms. There are three
distinct sets. The first lot is impatient and restless. They keep exploring the
unknown frontiers, discover the new territories, unearth hidden treasures. They
are brave but brittle. They are path breakers but probably lack tenacity. Sabre Toothed Cat and Wooly Mammoth. The
second lot may not be glory seekers but they are adept at adapting to the
changing times. They are malleable and hence survivors. Rats and Cockroaches as
species have actually done well for themselves. And the third lot? They wonder what changed.
They refuse to acknowledge that the winds are changing. They set their sails in
the wrong direction or don’t set the sails at all. They are slow and stubborn.
They eventually perish too. The
dinosaurs.
Many an organisation is formed with a burning ambition,
grand vision and unmatched passion of their founders. Then any of the three
things happens.
One, Turbulence
Unfortunately for an organization, somewhere along this
adventurous voyage, the corporations enter the choppy waters. Several things
change. Customer preferences, technology, government rules, international
treaties, wars, frauds, maverick competitors, copyright violators, inflation,
recession. All or any of this can simply knock the wind out of the sail. History
is replete with examples of such companies. From Eastman Kodak to Enron to Lehman
Brothers.
Two, Hubris
More often than not the initial success gives the incumbent
management disproportionate confidence into its own abilities or actual size of
the opportunities or both. What follows is inexplicable diversifications, random
and ambitious take overs and wild punts. RJR Nabisco is a classic example where a maverick
CEO bets so big that it just pulls the plug on his large and successful
corporation.
Three, Morass
Sometimes it’s just the opposite. Nothing of
significance really happens externally in the environment or internally within
the organization. And the corporation just trudges along. No fresh ideas, no rigor and completely out
of touch with the external environment. This kills the excitement. It is akin
to the Second Law of Thermodynamics. This Law says that the total entropy of an
isolated system always increases over a period of time. Meriam Webster
Dictionary defines entropy as a “measure of unavailable energy in a closed
system or degradation of matter. Synonyms of entropy are ‘chaos’,
disorganization’ and ‘randomness’. I
always thought this definition fits so well to several corporations where
complete isolation from the reality leads to complete morass. They are ready to decay and die. Nokia and
Research in Motion (makers of Blackberry) turned into such isolated systems
which never really grasped the changing times. The degradation eventually
swallowed both the organizations.
Magic potion for immortality? At least give me one for longevity
MAN has not yet
succeeded in two of his insatiable desires. Alchemy, to turn any metal into gold and Magic Potion, to get a ticket to immortality. There is really no
such thing as immortality. Neither for a species nor for corporations. But what
is not impossible is longevity. If we accept that anything that is created will
cease to exist one day then the question is how long can one delay the
inevitable? It appears that there are
only a handful of commercial institutions who have survived vagaries of time.
Baretta, gun maker, incorporated 1526;
Grolsch, brewer, incorporated 1615; Haig, distillery of scotch Whisky,
incorporated 1627; London Gazette, Newspaper, incorporated 1665; Lloyds,
insurance, incorporated 1688; Twinings, tea, incorporated 1706; Sothby’s,
bookseller, incorporated, 1744. Amongst the latest Fortune 500 list there are
only 13 corporations which are over 150 years old. Some of the notable names
are Citigroup, Colgate-Palmolive, DuPont, J P Morgan Chase, Bank of New York
Melon.
Fortune 500,
Not So Fortunate After All
Contrast this with the fact that only 61 or barely 12% of the
Fortune 500 companies in 1955 still existed in the list in 2014. The website
aei.org reports that the average age of a publicly listed corporation has come
down from 75 years to less than 15 years in the last 50 years.
Deathwish of a Moth
So is there a
secret recipe or a magic potion for longevity? If there is, I have no idea. I
also don’t know if there exists a survivor’s guide book with a step by step
prescription for a long life of an organisation. Corporations, after a few decades of their
inception either go bust or get gobbled up by larger corporates which in turn
go bust eventually.
Though we have
no secret recipe for longevity let alone immortality, I can certainly think of
a tool kit which hastens the process of decay. This is an attempt to decode the fatal
attraction which organisations so often exhibit to embrace their own mortality.
Let’s see how these simple to follow tips can guarantee a CEO that his or her organisation
doesn’t last to see the next decade.
Carry
the Donkey on the Shoulder
The story goes that a
farmer and his son are walking a donkey home in the scorching Sun. They pass a
group of raucous villagers who laugh heartily at them and say aloud why aren’t
they riding the donkey. Hardly have the father and the son mounted the ass when
they come across another bunch of righteous villagers who took a pity at the
donkey for carrying two healthy men on its back. The father then dismounts only
to encounter elderly villagers who gesture angrily at the son and wonder why
the young man is letting his old father walk. When father rides the donkey,
ladies of the village snigger at the old man saying how the selfish old man is making the little
fellow walk in the sun. Exasperated the duo finally ties the donkey to a pole
and carry it home. So first tip, follow every
advice of everybody whoever comes along the way. Consultants, Board members,
Stock brokers and Analysts, Management Gurus. Just try to please them all.
Imitor Proximus Tuus
Imitate your neighbor. The next tip is to copy your
competitors. Copy their products, their
structures, hire their employees, learn
their “best” practices and practically anything else you can lay your hands on.
When in doubt, do what your competitor
or a bunch of them are doing and pray that the wisdom resides with the competitor.
If so many of them are doing it then it must be damn right. And what best way
to shut up the pesky analysts than to copy a worthy competitor or two. Didn’t
they all ride the Subprime bandwagon together?
Fresh Air May be Allergic
Call your one downs for infinite meetings. Set up an
army of administrative staff to set up elaborate meeting agenda, take minutes
of the meetings, circulate a list of actionable items for the next meeting.
Form committees. Ask these committees to keep elaborate documentation of their
deliberations, selection criteria of their members, evaluation of the
performance of their members in these deliberations and the works. Create an
atmosphere where employees not in the committees should feel insecure and
strive to get into one. Question the usefulness of the employees who are not
‘seen’ in those committees. This is sheer fun. See how employees plot against
each other to get into one of those committees. Develop structures and
evaluation scores to measure employee effectiveness on the basis of their
participation and performance in these committees. Give higher weightage to
employees who spend time in the committees than those who simply squander away
time with the customers, vendors, suppliers, investors et al.
Build a Tomb of
Foundation Stones
Remember the adage, ‘well begun is half done’? Well,
leave the other half to your successors or to the lowly employees. God is in
the Big Picture. You are the visionary, the pioneer. Details are for the ordinary
who enjoy the mundane. In the times of Twitter why waste time writing an epic.
Besides, who doesn’t love good sound bytes? You must fear the long treacherous
journey of execution. Because the actual time spent in execution may keep you
from the glaze of the world. You can’t afford that as you have to make the next
announcement of that big exciting idea.
Demolish the Old Structures
When in doubt you may just change the whole damn
structure of the organization. The verticals, the horizontals, the matrices,
the thick lines and the dotted lines. Everything and for everybody. This is sure fire way to cause huge anxiety
within the ranks making them look up to you for direction and for some sense.
This also keeps the organization occupied and creates an impression of a
purpose. That is most important. They will love you. Media, your Board,
Analysts et al. Practically everybody likes the (wo)man with a purpose. Best
part of this trick is you can always blame anything there is to blame on the
previous structure. And whoever has any gumption to question your logic can be
easily silenced lest he end up taking the onus for the earlier mess.
Les Dispensables
Evolution of homo
sapiens is a continuous process from the hunter gatherers some 70,000 years ago
to the modern times of world wide web. And no one individual can claim to have
been indispensable to mankind. No one can claim that but for him or her this
species would be still hunting with crude stone tools. And that’s right. So
never mind if your employees leave. Never mind even if they leave in droves. If
one is dispensable then so are many. You can always replace them with the new
hires.
Obviously this is not
an exhaustive but certainly the effective list. If a CEO so chooses (s)he can
certainly keep an eye (or both) open to ensure that the corporation (s)he
presides over, has no access to this self help guide.
Visit Digital Dimensions to know more about the author
Visit Digital Dimensions to know more about the author
References
www.fortune.com :
150 year old fortune 500 companies
www.themysteriousworld.com : oldest animal species
www.dogsofthedow.com : largest companies by market cap
www.nbcnews.com :
notable companies which have disappeared
www.businessinsider.com
: iconic brands that no longer exist
www.aei.org : average
age of fortune 500 companies
Sensex companies in 1986 – only 6 remain in 2016
wap.business-standard.com
