Bulldozer00's Blog

When revenues and/or profits go flat or they start eroding, one of the 3 textbook moves that a mediocre company usually make is to reorganize (yet again). The other two moves in the utterly uncreative and standard MBA playbook are: 2) fire people; 3) instill fear via coercion and adding more rigid/constraining processes to extract more productivity from the value creation team at the bottom of the corpo hierarchy. Sometimes, especially in a time of crisis, all three actions are executed. Notice that all 3 moves are attempts to cut costs and not to raise revenues. Raising revenues requires exploring, discovering, and finding new customers along with developing successful new products that open up new markets. These actions require creativity, innovation, new ways of thinking, leadership, and courage. Sadly, these attributes are not the forte of mechanistic and Newtonian MBAs who are trained to solely look at data and compute fancy state-of-the art derivative business metrics.

When a company reorganizes, which is the least painful action that can be applied to the productive members at the bottom of the org, grand new titles are created, groups are renamed, and new layers are added/subtracted. Management temporarily feels better and optimism permeates the top of the stratified pyramid. The people down in the dirty boiler room know better. Since the reorg usually consists of shuffling the same people with the same old crusted mindsets into new positions, no deep and lasting change happens. If, during the reorg, people with new ideas are promoted from the bottom or brought in from the outside, they are quickly “set in their place” by the old guard that remains. They get absorbed by the borg. Blech.