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Sunday, February 28, 2010

Corporate Leadership: Failure by Selection?

In some large corporations, or even not-so large ones that may think same wise, the ascension to the career ladder resembles Darwinian selection process where an odd mix of competences, or evolutionary traits if you like, play their part.

Wave after wave, promotions and firings progressively sieve employees not only on the basis of their domain knowledge and work ethic, but also on their ability to endure grueling and pointless meetings, keep their managers happy no matter what, and stay in tune with the prevalent corporate vision and culture.

Hence, it’s no accident that this brand of corporate eugenics often cull employees that when they eventually reach the top echelons of the corporation they are much more comfortable to keep the ship running exactly it had been before, rather than challenge previous assumptions, question product or market relevance, axe aging cash cows, or simply try something new.

Research suggests that successful leadership amount to 50% of overall corporate success. Could this explain why so many large companies ingloriously succumb to smaller more nimble startups? After all large companies have the experience, the network, the process, the patents, the brand, and an army of soldier to throw to the battle. Yet, the numbers are striking: Out the companies on the Fortune 500 list 50 years ago, only a handful are still around... 

1 comments:

Mark Capper said...

I am currently consulting to a very large consumer packaged good firm. At dinner one night the key strategist said that the company is very risk adverse. He said the managers have a saying "not on my watch." This means that they do not want to take any risks that might not be successful. If something less than a success is pinned on their reputation, their careers in that firm are done. Thus the company, like many CPG's is very risk adverse. Innovation is almost always acquired through acquisitions at a very high price.