Corporate Decay

[satchmo]

Here is a link to an interesting article on the subject for fodder:

http://www.sba.oakland.edu/faculty/schwartz/GMDecay.htm

I was curious if any of you have been with a company that went through a similar decay process. If so, what were the internal indicators? Did the company rebound? If so, how? Also, what did you learn to look for to notice decay early in a company?

I have questions about my current organization regarding this, but I also just have a general interest in the corporate dynamic.

 

[IRstuff]

Can't say I've ever worked for a company like that. I've worked for pathological companies, but with totally different pathologies.

I'm not completely convinced that this article isn't self-serving in its own right. It's a label looking for a product. Some of the examples given are simply of stupidity or poor execution, rather than some grandiose corporate psychiatric disorder.

TTFN

 

[GregLocock]

Does Oakland Uni have a good rep? If so I'd take be a bit surprised they'd want their name stamped on this.

Anyway, yes I have worked for a variety of companies which were in a state of financial disrepair and on the edge of oblivion.

In fact, every company I have worked for bar one has lurched from financial crisis to financial crisis, and the exception was the result of a previous explosion (Marconi). That's the name of the game in the auto business. The top quarter are fine, everybody else is in a continual fight to establish a profitable foothold in a customer driven, price conscious, market, where every new model represents an investment of the same order as the capitalisation of the company.

None of them rebounded to any significant extent, in the long term. The current one, well I guess I'll wait and see.

Cheers

Greg Locock

Please see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[dcasto]

Been through one or two of those.

Indicators: As the paper describes, upper management believes all its own fairy tales, "If its to good to be true, hey make a new bonus out of it!" Upper management will put a spin on everything and the internal meetings will increase to support the spin.

Rebound and How: The companies just collasped. One sold off everything for pennies on the dollar. The other had a white knight save them. Meanwhile, upper management escapes with a ton of money.

What to look for: Watch the bonus program, if keys are a little strange, get ready. If the company has some new consultants which are trying to make your company like a competator. Jumping out into things the company has no clue about.

 

[Heckler]

My sister with her PhD. in Psychology has always advised me that the person at the top of the organization will imprint his/her personality on the organization. If they're nice honest demanding people, then the org will be on a fairly even keel. If they're a whacko psycho backstabbing evil SOB, then the whole place will be neurotic and dysfunctional.

I've worked for two of those types of companies: The first had neurotic owners (husband, Wife, & Dog) along with financial problems. It was common to be in an engineering meeting where the CTO (Husband) blows a major gasket. He ended up hitting a Jr EE after one of those explosive meetings. The second company didn't have money problems as much as the owners had ego problems. The owner’s sons had major inferiority complexes with us engineers. I was pistol whipped a few times because I was lesser of a person. I'm totally convinced that in both situations neither would make it in "Corporate America"

Best Regards,

Heckler
Sr. Mechanical Engineer
SW2005 SP 5.0 & Pro/E 2001
Dell Precision 370
P4 3.6 GHz, 1GB RAM
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NVIDIA Quadro FX 1400
o
_`\(,_
(_)/ (_)

Never argue with an idiot. They'll bring you down to their level and beat you with experience every time.

 

[MikeHalloran]

I don't recall working for a company that was _not_ dysfunctional, and doomed.

I can really pick 'em.



Mike Halloran
Pembroke Pines, FL, USA

 

[JStephen]

The article sure doesn't seem to break any ground. Reading The Peter Principle and Dilbert will get you the same insights, I do believe.

 

[BelspringKen]

Heckler makes a good point. I spent a few years at a company with an owner who was a bit unbalanced and dishonest. Most of the folks there were a bit neurotic.

I got a few gray hairs there, but got some good experience, too. Since I was determined to keep my nose clean there, and also keep a good name in the rest of the industry, a long tenure there was not for me.

 

[ScottyUK]

Among some good managers at our place, I also see those who would have fit right in to the world described in the link. There are certainly some truths in the piece, but it is pretty one sided. It brought a few wry smiles to my face when I thought "I know _exactly_ who fits this description!".


----------------------------------

Sometimes I only open my mouth to swap feet...

 

[Murec]

It would be interesting to apply this analysis to Enron.

It seems they really believed in the greatness of the company and saw the mistakes and the losses as something passing and non-typical. So they tried to cover up everything that did not fit their conception.

I call this the power of positive thinking (over reality).

 

[IRstuff]

Well, I still think there's too much push here, perhaps the author is suffering from the same disease.

Most fantasies, at least the technical ones are only fantasies in retrospect.

Case in point: Titanic. The designer fully believed that his ship design was nearly bulletproof. We call that a fantasy only in retrospect and only due to the fact that the ship sank from the one condition that it was vulnerable to. Note that the two sister ships of the Titanic also sunk, but not from that fatal flaw. So, they didn't wind up as examples of that designer's folly.

Case in point: can't remember the hedge funds' names, but there have been two that were deemed to be bulletproof; backed by the analysis of multiple Nobel prize-winning economists and mathematicians, and heavily invested by large and major banks with their own economists ad mathematicians. Both failed spectacularly. Were they fantasies? or simply bad judgement? If they hadn't failed, we would never consider them fantasies, and would be cursing for not getting in on the gravy train.

Case in point: Wang Computers. At its high point, the machines were ubiquitous, everything that needed word processing had to be done on the "Wang;" it was a mandatory requirement for secretaries to know how to use a Wang. Within about 3 years, it vanished onto the scrap heap of history. If it weren't for the PC, Wang might have gone on for another 10 years. Was An Wang delusional?

I'm not implying that companies don't get delusional, but I think that it's much harder to see it while it's happening than after the fact.

TTFN

 

[drawoh]

IRstuff,

The Titanic and the Britannic sunk. The Olympic eventually was scrapped. Olympic rammed a Royal Navy cruiser, and she rammed and sunk a light ship off New York, so you cannot say they didn't try.

Titanic hit something bigger than she was.

Titanic was designed to survive if any two adjacent holds were opened up, and to survive if the first four holds were ripped open. Does anyone know what the standard is today?

The moral of the story is the same as the WTC. If you do enough damage to something, it will fail.

What actually sunk Titanic was a freak accident in which she was lightly scraped for 300ft. I read somewhere that they estimated the area of the hole at 12sq.ft.

White Star Line's pathological behaviour was its racing throught the fog. Apparently, Cunard did not do this.

JHG

 

[IRstuff]

Right, I was confused...

It's unclear whether White Star itself had much to do with the reckless speed of the Titanic. Capt Edward Smith was also in command of the Olympic when it collided with the HMS Hawke. Note that there were a chain of errors that led the captain into altering the ship's course to avoid icebergs, when, in actuality, the icebergs where further south. Had he stayed on his original course, he probably would have avoided the mishap.

The Titanic's flaw was that the water-tight compartments weren't fully isolated. If any compart got sufficiently full, it would spill into the adjacent compartments.

White Star's folly was the elimination of 12 ifeboats because they felt that it detracted from the ship's look. But, that's only in hindsight; had the ship not sunk, we'd still be admiring her clean lines.

TTFN

 

[patdaly]

Let us also not forget, Titanic's wound would not have sunk her had she not been made of the era's steels. We as engineers did not have the knowledge of cold brittle fracture until WW1.

So, based upon the available knowledge, I would have also proclaimed her unsinkable. Of course, I would have been wrong, but not because of enthusiasm.

 

[drawoh]

satchmo,

Someone has already brought up the Peter Principle. This books brings up points.

* Everyone rises to his level of incompetence.

* Competence is in the eye of the beholder.

The second point rather negates the first. Is a sick corporate culture something that happens mysteriously, or is it caused by senior managers with screwed up concepts of competence?

Another good read is the March of Folly, by Barbara Tuchman. She describes a series of cases in which governments pursue stupid, destructive policies against their own interests. The main chapters are the Renaissance popes, the British losing their American colonies, and the Americans in Vietnam. This has nothing to do with engineering, but is quite relevant if you want to try to understand how people make bad decisions.

JHG

 

[JStephen]

The Peter Principle has a number of points it brings up. It's intended more as humor, but well worth the read if you can hunt it up at your local library. Cynical thinking is not new.

 

[drawoh]

patdaly,

I am sure that the metallurgy of a century ago was not up to our standards today, but would a modern ship have survived Titanic's accident? The iceburg scraped it and opened six holds. It was a very narrow slit. It sounds to me more like a ductile failure than a brittle one, although this sort of thing is not up my alley.

I was watching a program on TV about a shipwreck on the Great Lakes back in the 1960s. A survivor explained that the ship had been made of the same steel as the Titanic, and that this is why she split in half. I was sitting there thinking "fifty year old steel ship -- there are alternate explanations!"

JHG

 

[KENAT]

I went to the Titanic Exhibit on the Queen Mary a few months back and also went to Uni in Southampton (her home port which still has memorial services etc).

As I recall the designer didn't claim her unsinkable. That was the PR guys or management.

Fundamentally the main material she was made of was more dense than the water upon which she floated.

It’s a very brave, or idiotic, person who would declare any such vessel unsinkable.

Do enough damage or even poorly secure scuttles etc and enough water will come in to make her sink.

Regarding the life boats, as I recall the designer had allowed for the extra boats but the management wanted them removed for aesthetic appeal.

Equally bad was that many of the boats that were launched weren’t fully loaded and they took too long to get back to those in the water once she’d sank.

As regards the original article while full of wordy BS there is certainly an element of truth. I certainly see it applying to my current employer in areas. However, the Peter Principle and variations there on are nothing new. Many employees don’t do their best/what’s best for the company, they do what it takes to get on in the company.

 

[IRstuff]

re: the time taken to return.

There was concern that the sinking ship would "suck" down all lifeboats that were too close, so they were ordered to move to a safer distance far from the ship.

TTFN

 

[KENAT]

Yes, but supposedly further than necessary (though how you were meant to gauge the safe distance in such a situation, especially back then I'm not sure) and once it went under only a few went back and not straight away.

Back to the OP I find the in fighting between VPs jockeying for position annoying/amusing here.