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Bloated Businesses

One of the most frustrating lessons I have been taught over the years is that big does not mean better. It seems obvious now, but when this realisation first struck me it was met with great disappointment.

I started my career in the early days of the mobile industry, a time when every company tried to be as “flexible” as possible in order move products out the door. What this really meant was corners were cut in every area, processes and sound practices were ignored and bad habits formed within said companies, but we were convinced that this was the price we had to pay in order to get products out the door on limited budgets. Each business did however have its own lose 1-2 year strategy for improving processes, to be executed “once things settled down”. We all soon recognised of course that as businesses grow, they become more resistant to change. It seems to only take a matter of days before  new businesses have arranged their own “old boys club” and begin accepting new members, as everyone attempts to sit back and relax now that they have “made it”. The lesson here seems an obvious one, yet every day start-ups are begun with the same bad practices, largely due to the employees originating from the same bloated businesses with lofty ambitions to “do things a different way”, without seemingly ever having found what that right way could be.

The current boardroom turmoil at Nokia is a wonderful example of what can go wrong when established processes and good practices are ignored. This is a company where friendships were always more important than qualifications, as the “old boys club” thrived in every department. This was perfectly acceptable when the goal of the day involved releasing more of the same devices and copying the competition where needed with their multitude of patented products they had been “saving for a rainy day”. The success of the iPhone however brought with it an abrupt end to this easy life, as it became clear that for the first time, Nokia had nothing in the locker to immediately retaliate with. This was the beginning of the end for Nokia’s “old boys club”, as with each passing quarter it became more and more apparant that the company lacked qualified, experienced professionals in every area of the decision-making process.

We must give out Finnish friends some credit however, as they have recognised and are forcing through change while they are still the number one handset manufacturer in the world by some distance. Motorola allowed their “old boys” (with more than a helping hand from Finland) to drag the company right back to pre-RAZR days before they begun their own clear-out, and that hasn’t been particularly successful when you realise those who escaped the cull.

Samsung, HTC, Palm (poor Palm), Sony Ericsson, Panasonic, Apple, Siemens, every business has its own “old boys” club, some are simply better than others at hiding the deadwood amongst the pack, and not allowing it to drag down the entire company. All of these companies in some way of failed to move when the opportunity presented itself, failed to recognise a market opportunity that cost them millions etc. In the midst of all this, there is one benefit to such bloated, slow moving institutions: their inability to adapt quickly and move at market pace always leave the door open for someone new to innovate and take advantage. My bet goes on the company that recognises Archos are ripe for a take-over.

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