Smart Companies and Dumb Things
It is not that difficult to understand why poorly managed companies go bankrupt. The real question is why smart and well managed companies fail. Guy Kawasaki has a great post over his blog titled “Why Smart Companies do Dumb Things”.
The first reason why smart companies do dumb things has to do with the consensus. In his own words “once consensus starts to build, it’s harder to alter a decision. It’s one thing to argue against a few people; it’s much more difficult to argue against the wisdom of a crowd. Individuals who hold out, question, or disagree are labeled as clueless, uncooperative, and not team players “.
There are many other reasons mentioned, check it out.
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Daniel, one area that’s not mentioned in your post or Guy’s as a reason for dumb decisions is an overly internal focus. Not being able to see/judge your company as others do can lead to staggeringly dumb decisions. Exhibit A from this week: HP’s decision to hire a private investigation company to spy on its directors. (Didn’t anyone run this idea by their spouse? If I were an HP director and told my wife about this idea, she would have given me the look that says ARE YOU NUTS? and I would have given up on the idea immediately.)
I also think the title of the book is interesting: “Why Smart Companies Do Dumb Things.” I never found companies in and of themselves to be very smart. At minimum, companies don’t aggregate the smarts of their employees very well.