> Flat disagree with this. Small org CEOs are close to their customers and employees and if they behave like dicks then they get punished quickly. Obviously some still do, because people, but it's harder for a small company CEO to continue being a dick.
I'm thinking it might be both - depending on who the real customers are.
I've seen plenty of what I described in "boring" B2C like... grocery stores. But thinking about it, for a grocery store chain, customers are as much a commodity as the products they buy. Suppliers are where relationships (and power plays) matter.
(This might be fundamentally the same problem as the infamous case of "enterprise software procurement" - people using the software aren't the ones paying for it. For a grocery store chain, customers come and go all the time for many reasons, so it averages out anyway - but your suppliers and partners are what makes a difference in your bottom line.)
> And all commercial airplanes, MRIs, anything, were built first by small organisations, and only later by large orgs. Large orgs just can't invent new things unless they form specialist small orgs to do it (skunkworks, or Palo Alto, or similar). Large orgs just don't work like that.
Which is why I tried to point out the category error. "Large org with skunkworks" vs. "Bunch of smaller orgs forming an alliance and acquiring more smaller orgs to productionize a new technology" vs. "government megaproject" - they're all similar, arguably for a given invention they may very well be the same thing. Names and legal groupings are different, but the dynamics is (by anthropic principle) specific to what's needed for a given type of invention.
E.g. for stuff like airplanes or MRIs, you need individuals and small teams with lots of freedom (and a "hold my beer and watch this" culture often helps), but that gives you a prototype at best - scaling this so it works reliably, and then optimizing so it can be economical, both require throwing money at people doing boring work that mostly increments things on margin. And then the money has to come from someone, and someone must be willing to spend it to fund it all.
The actual org charts and legal charters don't matter - what matters is the incentives inside. I somewhat tentatively put forth a hypothesis: large orgs form to solve problems that the regular free market dynamics can't handle, by creating areas governed by different rule sets, within which that work can be done. Whether that's by fiat or corporate charter or a bunch of friends aligning their small businesses for the same goal, is window dressing.
yeah I see where you're going. But it doesn't address the politics/management problem - large orgs invariably generate internal politics as their incentives get misaligned with their objectives (the root cause of the 5-layer "pure manager" situation becomes a problem). Large orgs have to actually split off a smaller org (that doesn't have this problem) to actually do anything new.
The Innovator's Dilemma is a symptom of the same problem: a large org with an existing market cannot innovate because the incentives for management do not allow cannibalising the existing product sales to launch the new product.
I'm thinking it might be both - depending on who the real customers are.
I've seen plenty of what I described in "boring" B2C like... grocery stores. But thinking about it, for a grocery store chain, customers are as much a commodity as the products they buy. Suppliers are where relationships (and power plays) matter.
(This might be fundamentally the same problem as the infamous case of "enterprise software procurement" - people using the software aren't the ones paying for it. For a grocery store chain, customers come and go all the time for many reasons, so it averages out anyway - but your suppliers and partners are what makes a difference in your bottom line.)
> And all commercial airplanes, MRIs, anything, were built first by small organisations, and only later by large orgs. Large orgs just can't invent new things unless they form specialist small orgs to do it (skunkworks, or Palo Alto, or similar). Large orgs just don't work like that.
Which is why I tried to point out the category error. "Large org with skunkworks" vs. "Bunch of smaller orgs forming an alliance and acquiring more smaller orgs to productionize a new technology" vs. "government megaproject" - they're all similar, arguably for a given invention they may very well be the same thing. Names and legal groupings are different, but the dynamics is (by anthropic principle) specific to what's needed for a given type of invention.
E.g. for stuff like airplanes or MRIs, you need individuals and small teams with lots of freedom (and a "hold my beer and watch this" culture often helps), but that gives you a prototype at best - scaling this so it works reliably, and then optimizing so it can be economical, both require throwing money at people doing boring work that mostly increments things on margin. And then the money has to come from someone, and someone must be willing to spend it to fund it all.
The actual org charts and legal charters don't matter - what matters is the incentives inside. I somewhat tentatively put forth a hypothesis: large orgs form to solve problems that the regular free market dynamics can't handle, by creating areas governed by different rule sets, within which that work can be done. Whether that's by fiat or corporate charter or a bunch of friends aligning their small businesses for the same goal, is window dressing.