The Six Disciplines blog has moved!

You will be automatically redirected to our new home. If that does not occur, please visit:

Tuesday, June 02, 2009

How Does Excellence In Organizations Degrade?

Gary Hamel is a management author and consultant, whose books include "Leading the Revolution," "Competing for the Future," and "The Future of Management."

In his recent WSJ blog post "GM: Why Good Companies Go Bad" Hamel asserts:

How does this happen? How do yesterday’s icons become today’s also-rans? How does excellence degrade? What are the causes of corporate dysphoria? These are important questions. When an organization stumbles badly everyone loses: shareholders, employees and customers. Through the years, I’ve seen a lot of companies lose their way. Here’s how it happens:

1. Gravity wins. In business as in biology, big things grow slower. Over time, it takes more and more effort to produce less and less in the way of incremental returns.

2. Strategies die. Clever strategies get replicated,venerable strategies get supplanted, and profitable strategies get eviscerated.

3. Change happens. Most businesses were never built to change—they were built to do one thing exceedingly well and highly efficiently—forever. That’s why entire industries can get caught out by change.

No comments: