4 Ways to Tell If Your Company Is Too Big to Manage
In recent years, we’ve heard much about “too big to fail,” but one of the nightmares of organizational life is “too big to manage.”
At a certain point, yesterday’s entrepreneurial, agile organization known for innovation and creativity can often morph into a clunky, behemoth not even Rube Goldberg could keep up with.
The trouble is, growing organizations can easily become overwhelmed by bureaucracies and torn apart by turf. As you aspire to grow your business, two critical questions you must ask yourself are: At what point does an organization become too big to manage? And what, if anything, can you do to prevent helming such a company?
For starters, it'll help to know a hulking, unmanageable company when you see one. Here are four signs that an organization is in danger of succumbing to its own weight:
1. The core mission statement has become diffuse. When an organization is vital, its mission statement is clear and provides a rallying cry not only for tactics and strategy, but also delineates everything from sales strategy to research and development. In a vibrant, growing firm, the mission statement is a touchstone that legitimizes all activities. Clunky organizations, on the other hand, either cling to an antiquated vision statement or stand behind one that is too broad or too ambiguous.
2. The main business function fades. In their early stages, most startups have a highly focused business strategy, with a specific service or product they intend on delivering. As organizations become larger, they can lose sight of these core activities. Maybe they grow by mergers and acquisitions, adding product upon product, or service upon service, and scotch-taping the pieces together under the banner of “solution-driven not product-driven.”
This ad hoc philosophy can backfire when companies fail to integrate their component products and services into an integrated solutions approach, which can give them a focused business strategy. Steer clear of growth for the sake of growth, as it can lead to sprawling and, ultimately, inefficient businesses.
3. The watchwords are "organized anarchy." Even too big to manage organizations have structure. But don't mistake structure for a solid business. After all, a house of cards has plenty of structure on its surface. Inside, it is clear that sections are flimsy and tenuous.
In companies, business segments may not be integrated, functions and processes could be duplicated, and R&D may run parallel paths in numerous sectors. Accountability is diffuse, and the organization itself resembles a corporate serfdom. And in many arenas, the organization has lost control.
4. The organizational culture is schizophrenic. Successful organizations, at their best, not only know where they are going and how to get there, but the culture of the organization is clearly defined. Culture, as a key motivator of performance, in a company that lacks proper guidance, becomes ambiguous. Individuals are often told that they are valued members of the community, but are disproportionately driven by the bottom line.
On one hand, there is a sense of collective and unity, and on the other, there is desperate drive to succeed and achieve immediately. It is unclear what is valued and what isn't, and people can become alienated from the normative community that motivated them to contribute to the common mission when the organization was at its most successful.
A clunky company is, essentially, misaligned. The vision statement is diffuse, the focal business function is lost, anarchy reigns, and the organization culture does not motivate appropriately. In these companies, the critical alignment between values, culture, structure, and behavior is lost.
With the appropriate leadership, such unwieldy companies can reemerge and be reinvigorated. They usually have the resources to succeed, but what they need is the focused pragmatic leadership to take charge before they waste away.
SAMUEL B. BACHARACH | Columnist | Director, Cornell's Institute of Workplace Studies
Samuel B. Bacharach is the McKelvey-Grant professor in the department of organizational behavior at Cornell University's ILR School, and is director of Cornell's Institute for Workplace Studies in New York City. Among his books are Get Them on Your Side and Keep Them on Your Side. His latest volume, A Good Idea Is Not Enough: Leading for Change and Innovation, will be published this November by BLG.