During my first job after college, I realized that I had a fascination with systems thinking and organizational development. Since then I have worked in companies of different sizes, from a few dozen employees to many thousands, and I have formed a few opinions about company size and behavior.
As companies grow beyond the point where everyone knows everyone else (around 100 people), the amount of work between people increases dramatically. (Picture a lot of dots connected by lines, and as the # of dots grow so does the sum total length of the lines.) This phenomenon is just common sense. As you have more people, you have to spend more time organizing people and opportunities for inefficiency increase.
For a lot of employees, this is the "bloat" of big companies. The middle managers, the people that dont seem to do much, the meetings, the people that do something no one knows about, the slow reaction time, the Dilbert comparisons.
This bloat also leads to the bureaucratic behaviors that big companies are famous for, such as politics and power games. Again this is common sense. As companies grow, the leaders need to rely more and more on other people's decisions and as people no longer understand what other people are doing, they lose their personal filter for BS. One result of this is that people who are good at BS and who exude confidence have a huge opportunity to rise which ultimately damages the meritocracy.
In other words as companies grow, the nature of working in that company changes dramatically. Working on the space between people is very different from working on the actual product the company produces. This type of interpersonal or political work appeals to a different personality type and skill set. We often see this in startups when the charismatic founder is pushed out for a more managerial CEO because the founder is terrible at managing people. A lot of people hate this transition and cry to the heavens about it but I see it is rather inevitable. Companies change; the work changes.
Serious Money
I have used Microsoft products for most of my life. Now that I live in Seattle, I have been learning a lot more about Microsoft the Company which is quite different from the opinions of Microsoft the Monopoly found on Slashdot. (For starters, one is more careful about Borg jokes here.)
I mention this because I just saw an interview with Robert Herbold, the former Microsoft COO on a local TV show, Serious Money, that was taped last year.
Robert Herbold, Author, The Fiefdom Syndrome: Turf Battles That Undermine Careers and Companies-And How to Overcome Them
In his book, The Fiefdom Syndrome: Turf Battles That Undermine Careers and Companies-And How to Overcome Them, author Robert Herbold, explains the insidiousness of fiefdoms. The book details how turf wars arise and provides techniques to avoid battles before they begin. Herbold is former COO of Microsoft Corporation and recently launched Herbold Group, a consulting firm on strategy and profitability issues for CEOs. Robert Herbold joins Tom to discuss his new book and offers tips for managers to build strong organizations.
Mr Herbold has just written a book and his comments were interesting.
"The Fiefdom Syndrome : The Turf Battles That Undermine Careers and Companies - And How to Overcome Them" by Robert Herbold
Taken together with the mini-Microsoft blog, it appeas that Redmond is struggling with these same big company issues every other big company struggles with. I have gotten the impression that Microsoft seemed to think it was somehow different, but you just cannot hire 4,000 new employees every year and run (or act) like a startup.
Personally, I have begun to see Microsoft as a conglomerate like GE. Xbox is not the same as MSN or mobile operating systems. While these products all involve software, the businesses are completely different. They may all be lumped underneath the Microsoft-brand umbrella but that doesnt tell us much about the organization underneath.
I am not a big fan of conglomerates. I would argue that it is easier to be small than think small so I would prefer that Microsoft had chosen to split up into at least 3 companies. (I can understand how Office and Windows have worked together to create value but I question whether this combo is hurting customers now.) In the past 5 months Microsoft has re-org'd into 3 divisions but I am dubious that is enough. (Oh yes, constant re-orgs are another big-company symptom.)
GE seems able to succeed as a conglomerate but Im guessing that is because they really do have very different businesses which they manage quite separately. They dont have any illusions that aircraft engines and credit cards are the same business. In contrast, Microsoft continues to expand their central campus, to hire thousands of new employees every year, and continues to argue this makes sense because "its all software".
It is easy (and possibly unfair) for me to criticize from outside but it will be interesting to see what happens in Redmond as Microsoft has such an enormous impact on our lives (as well as my stock portfolio). I just dont think there is any way to have a small, nimble company without actually having a small company. Elephants can smash down walls with their power but they just dont win speed races no matter how much they train.
