I spent seventeen of my nineteen professional years working for companies that sold at least a billion dollars of merchandise on an annual basis. As a result, I am probably a 'big company guy'.
Back in 2000, I spent ten months working at an internet advertising startup called 'Avenue A' (now called aQuantive). Within two week of being hired, I worked on a small team of four people. We created a product that we took to market just six weeks later. No red tape, no approvals, just a small company allowing a small group of individuals to use their experience and best judgement.
Compare that experience to things that happen in large companies.
During my time at Eddie Bauer, I was Director of Circulation. This meant I was theoretically responsible for determining the best way to determine how to mail customers catalogs. My job was to maximize sales and profit by determining an optimal catalog contact strategy.
In 1998, I wanted to add a catalog to our contact strategy. I determined who the target audience would be in this additional catalog mailing. I determined how many pages should be in the catalog. I determined the merchandise composition of the catalog. I determined the in-home date for the catalog. I calculated the expected net sales, profit, and ROI of this endeavor.
To get this decision approved, I had to do the following:
- My boss, the Divisional Vice President of Marketing, had to approve of my idea. He could alter the page count, merchandise composition, or in-home date. He could approve, alter or kill the idea.
- If approved, the Sr. Vice President of Marketing had to approve of my idea. He could alter the page count, merchandise composition, or in-home date. He could approve, alter or kill the idea.
- If approved, the Executive Vice President of Global Brand Direction had to approve of my idea. He could alter page count, merchandise composition, in-home date, and suggested creative presentation. He could approve, alter or kill the idea.
- If approved, I had to pass the idea past the Director of Inventory Management. She had to support the sales plan by making sure that merchandise would be available. She could alter page count, merchandise composition and page count. She could alter or kill the idea.
- If approved, I had to pass the idea past a team that I participated on, a team that focused on maximizing the catalog strategy. Our internet marketing leader, finance leader, operations leader, creative leader, and inventory leader could all alter the page count, merchandise composition, page count, in-home date, or creative execution. This team could approve, alter or kill the idea.
- If approved, I had to pass the idea past the Executive Management team --- a team of Executive Vice Presidents, and our President/CEO. This team could alter page count, merchandise composition, in-home date, and suggested creative presentation. This team could approve, alter or kill the idea.
Policy meant that many employees learned this idea was likely to happen. If powerful employees were opposed to the idea, they could lob the project back to any of a number of executives, who could begin the approval discussion process anew.
This process of iteration either resulted in a final decision, or resulted in the death of the project. Occasionally, there was not enough time to implement the idea, resulting in the death of the project.
Many big companies have better decision making processes than this. Many big companies have sub-standard decision making processes.
We wonder how big companies like JetBlue can completely ruin seven spotless years of brand equity with one day of bad mistakes. We wonder how Microsoft fails to compete with Google, or Apple, or a myriad of competitors. We wonder how Ford and Chevy implode when faced with foreign competition. We question why Dell plunders its brand heritage at a time when it needs to consider a viable online strategy amid significant competition. We wonder why record labels are busy destroying the music industry.
I have yet to work for a company led by 'dumb people'. It seems that problems occur when a bunch of smart, strong business leaders experience conflict, and are required to maintain sales and profit growth.
The self-organizing processes that occur when decisions need to be made become part of the culture of a large organization. Eventually, the culture becomes inflexible. The business struggles to be able to right itself, and focus on the change needed to survive.
I cringe when a pundit suggests that companies don't have the guts to ask questions. I have yet to work for a business that didn't have the guts to ask tough questions, or to make changes. That being said, every big company struggles to overcome a culture that formed over a long series of good decisions that led to successful business results.
Do you work at a large company, or a small company? Have you experienced the challenges I described in this article? What have you done to overcome these challenges?