Scale vs. Speed: Why companies slow down

If you compare a Starbucks ten years ago to the present, they are virtually the same. Compare this to the original Seattle and the difference is striking.

The same goes for a typical McDonald’s design.

Apple has launched the Mac with about a dozen full-time people working on its development. Today, they have more than a thousand engineers and they have not launched a groundbreaking product in a short time.

The same goes for Google. And slack.

It’s not just famous big brands. Almost every company hits a point where the pace of innovation slows down as the scale increases.

It happens for a number of reasons and there are two ways to deal with them.

Technical loan The result of a shortcut to work at the moment. As a result of these shortcuts, the software (or hardware) is not easily expandable for future needs.

Overhead handshake The result of simple laws of more people. n * (n – 1) / 2. It takes a handshake for two people to introduce themselves. On the other hand, 9 people need 36 handshakes. More people involved in more meetings, more approvals, more coordination.

Customer commitment An asset but a break from innovation. Your existing customers have not signed up for you to change things.

Partner choice Similar to customer promise. The partners you work with have their own motives and motives, the simplest common denominator being ‘slow.’

Fear of Wall Street Normal, but slightly faded. This instinct is that many institutional investors have to avoid the unknown. “The stock is rising, don’t blow it.”

Managerial concerns This is what happens when an operating bureaucracy comes to replace bold leadership. People get promoted because they are good at their job, and innovation is not an opportunity, it’s a threat.

So what to do now? Ignoring everything above is not going to work. Asking your people to light all the candles on both ends and change their attitude, as well as violating the laws of institutional physics is not just working. You hit the wall. Every time.

There are two useful options:

As annoying as the strategy A large number of adopted methods from Apple and famous brands. When you are crossing the aisle, most of your new customers do not want innovation. They want commitment, lack of surprises and reasonable prices and skills. Shipping your improvements on a regular schedule and predicting your offers allows you to reach more people and make a big impact. Small innovations allow an organization to avoid falling far behind innovative competitors, and this can take decades before the gap widens. And then you become Yahoo. Or Chrysler. Or Carvel.

Structural bankruptcy A bold alternative. Create a skunkworks. Your code refactor from scratch. Rotate the cash cow and get a team together to start something new from scratch. New things may not work at first, but if you do enough of them, your experience and perseverance will pay off.

I have encountered these choices many times in my career, and none are easy or obvious, but the choices themselves should not be ignored. If you hope for the best in both worlds you may be disappointed at the same time you disappoint those you work with and serve.

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