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Big and Dumb

With all the M and A activity going on we hear a lot about synergies and the strengths of being bigger.

Possibly true but I have watched a lot of firms get larger and, as a result, get dumber.


This happens when we try and centralize everything. “Makes sense” we say. Everything in one office – awesome.


But the process of doing this diminishes contact with the outside world. The home office becomes a big dumb bubble where everyone talks about how well they are doing in complete cluelessness.


Executives no longer even connect with the line workers. The home office dictates but does not get feedback from its branch offices.


Not to get too funky but this is not at all how nature works. Sure there is a central brain but we have finger tips, nose, tongue, eyes etc. All of these are appendages meant to gather data to inform our central brain. At times it is even the case that the information of our appendage overrides our ponderous thought process. For example, you touch something hot you pull back. You don’t go into a voting process on whether you should remove your hand, you just do it.


Think about any animal in nature. The way it learns – and evolves – is that it relentlessly gathers information from the outside world to change and adapt.


Very often, however, I don’t see our organizations designed this way. We focus on the consolidation of power in a central location. We talk about how this is a better type of organization but it’s really about covering our asses, keeping our jobs, and not at all about learning.


To play and old song, this is why I find big data potentially dangerous. It looks as though the organization is reaching out but it is simply trying to push sensitive qualitative data into 1s and 0s.

Rather than making an organization smarter, it could make it dumber (although it won’t think so until it fails).

Now, building the Octopus organization (as I call it) requires some effort. It’s going to necessarily be more democratic, less hierarchical, and certainly not as neat. But it will – when designed well – gather the data (both qualitative and quantitative) to make sure your company adapts and evolves to meet changing needs. Yes, you guessed it, it will be more “team” oriented.


At its worst a highly centralized organization is a big brain with now hands or senses to tell it what’s happening. Such organizations may survive for a while but eventually nature will ask it to adapt (demand that it adapt) and it won’t be able to.


If you want to build a great organization just remember how your own body works and follow along.

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