recent years I have noticed a very strange phenomenon about the rising new
companies. These are the so-called
new economy companies -- the ones that didn’t exist a couple of years before,
but now suddenly threaten the establishment with new technology and business
paradigms. Let’s call these the
gazelle companies. In contrast,
there are the stodgy old incumbent companies that are ungainly behemoths
struggling with old technology and outdated business paradigms.
Let’s call these the sloth companies.
The curious thing that I have noticed is that many of the chief
executives of the gazelle companies are former executives of the sloth
wrong with this picture? The very
people who created the outdated cultures and failing business models for the
sloths are suddenly reborn as fire-breathing entrepreneurs, running the agile
new companies that seem destined to be the exterminators of these same sloths.
back at the sloth, the turnover of employees and managers is so high that the
average service with the company is barely more than a year.
In other words, the sloth company consists almost entirely of new people.
Yet it is still a sloth, while the gazelle is being a gazelle, but is
using sloth brains and management. How
can this be so?
have long wondered what makes a company what it is. At the sloth, when the employees go home at night, they leave
behind an empty building. They take
all the culture, know-how, corporate wisdom, and knowledge base of the company
with them. They are the
company. Yet it seems that if all
new employees come back the next morning, as is almost happening today, the
sloth retains its sloth-like characteristics.
How does it manage to keep these unfortunate genes?
I brought up the question of the resilience of a corporate culture to changes in
the employee base, someone told me a story about monkeys.
It may not be a true story, and I have no way of checking it, but I like
the story. It speaks a mysterious
truth to me.
story is that psychologists were doing an experiment with monkeys.
They confined the monkeys in a big cage.
There was only one way out of that confinement – there were steps
leading up and out of the cage. However,
whenever a monkey climbed the stairs, the psychologists took the monkey aside,
punished him, and reinserted him in the cage.
a few monkeys had had this treatment, the behavior of the group changed.
Now, whenever another monkey began to climb the steps towards imagined
freedom, the other monkeys would pull him back.
“Bad idea,” they would have said if they could have spoken.
comes the interesting part. They
start taking monkeys out and replacing them with new monkeys.
But the same behavior continues. After
a while, all the monkeys are new. No
monkey there has ever been punished. But
whenever a monkey starts to climb the stairs, the others pull him back.
Presumably, no monkey knows why; it is just a bad idea.
This is the way it has always been.
explains for me the resilience of corporate culture. The new monkeys in the sloth pen continue the behavior
pattern as a kind of implicit genetic memory even though it threatens their very
extinction. But perhaps, like the
carpetbag gazelle executives, the monkeys that have been taken out of the sloth
pen and inserted into the gazelle pen are conspiring for a jailbreak.
We know how it was in the old pen, they are saying, but this is a new
pen, and the rules have changed. Let’s
get out of here!
course, this implies that the culture hangs in the pen itself.
I said earlier that the employees in the sloth company left an empty
building behind at night. Perhaps the sloth culture has seeped into the walls of the
building. But no, we know that
companies constantly change buildings. And
we know they even can change their names. Yet with new buildings, new names, and completely new
employees, they are still sloths. Their
employees look longingly across the street at the gazelle company and think: We,
too, could be gazelles -- just get us out of these sloth costumes.
instead it has nothing to do with the company itself. Maybe it is the external associations and contexts in which
the company exists. The company is
what other people think it is, regardless of what it does or thinks itself.
Perhaps in the monkey experiment it is the psychologists who are at
fault. The monkeys think that if
only they could move to a new cage without these guys in white coats around,
then they could do as they pleased.
imagine that if the psychologists left, then some monkey would eventually try to
climb the stairs, and nothing would happen to him. He would return and tell of his exploits, and the other
monkeys would look at him jealously. The
manager monkeys would look at him and praise him for thinking outside of the
box. Hearing that cliché, the
non-manager monkeys would groan and roll their eyes. That’s how monkeys are.
is yet another monkey story that might explain the behavior of the incumbent
sloth companies. It seems that a
way to catch monkeys in Borneo, or some such place, is to wedge a Bell jar into
the fork of a tree with a piece of food in the bottom of the jar.
In the morning, so they say, you just go over to the tree and collect the
monkey, who has his hand jammed in the jar.
The monkey’s fist, containing the food, is too large to remove from the
jar, but he won’t let go. So he
just stands there, waiting to be captured, rather than give up the food.
that’s how the sloth companies act -- afraid to give up their legacy
businesses, they wait by the tree. But
I wouldn’t know. These are just