Like just about everything else these days, Google seems to have the answer to long-term consistent business growth. Interesting commentary in the Wall Street Journalby a Gary Hamel. Mr. Hamel is a visiting professor at London School of Business. He makes the point that it is very difficult for any company to avoid declining even with a great business model and tremendous success. Dell Computer being a case in point, but there are countless other examples of decline. Why? In Mr. Hamel's words:
What the laggards have failed to grasp is that what matters most today is not a company's competitive advantage at a point in time, but its evolutionary advantage over time.
He goes on to say that he believes Google gets this and will avoid decline for some time into the future because it's management approach guards against the following evolutionary risk factors that most other companies succumb to:
- Evolutionary risk factor #1: A narrow or orthodox business definition that limits the scope of innovation. Google's response: An expansive sense of purpose.
- Evolutionary risk factor #2: A hierarchical organization that over-weights the views of those who have a stake in perpetuating the status quo. Google's response: An organization that is flat, transparent, and non-hierarchical.
- Evolutionary risk factor #3: A tendency to overinvest in "what is" at the expense of "what could be." Google's response: A company-wide rule that allows developers to devote 20% of their time to any project they choose.
- Evolutionary risk factor #4: Creeping mediocrity. Google's response: Keep the bozos out and reward people who make a difference.
Our companies may never become the size of Dell or Google (if you are like me, you don't want them to) but this seems like a good organizational analysis tool to keep handy in case things seem to be going stale. Oh, and don't forget to check the mirror when you start looking for bozos...