Group items tagged

The average life expectancy of a human being in the 21st century is about 67 years. Do you know what the average life expectancy for a company is? Surprisingly short, it turns out. In a recent talk, John Hagel pointed out that the average life expectancy of a company in the S&P 500 has dropped precipitously, from 75 years (in 1937) to 15 years in a more recent study. Why is the life expectancy of a company so low? And why is it dropping? Many of these companies are collapsing under their own weight. As companies grow they invariably increase in complexity, and as things get more complex they become more difficult to control. The secret, I think, lies in understanding the nature of large, complex systems, and letting go of some of our traditional notions of how companies function.

The best managers know how to frame work as a problem that is a lot of work to complete and a small amount of work to check. Mediocre managers spend too much time checking and revising their employees' work, and begin to approach the cost of just doing it themselves. (The worst managers hire incompetent people.) Wolfram Alpha made me this cute Venn diagram of the sweet spot: Competent (C) and not Micromanaged (M). Teams led by good managers reside in the shaded area of the diagram.

It really amazes me. We are still predicting failure/success, trying to figure out exactly what Enterprise 2.0 is. Why? Not because I know the answer, but because our expectations are off. It's like trying to predict the winner of the ball game at the end of the 1st inning.