The other day at a CEO roundtable we talked
about leadership and corporate culture. Startup executives tend to put a premium on collaboration. Working together. While not to be discounted, talk of “collaboration” and “trust” is standard fare in these kinds of chats. Everybody plays nice.
Big companies are a different story.
Big firms also extol the virtues of playing nice but in reality they tend to be structurally different than startups. It’s not that execs in big firms are necessarily “bad people” or that they don’t care about things like “collaboration.” It’s just that, unlike startups, executives in large firms have a different problem. They can have thousands of employees depending on them, millions (or billions) of dollars at stake, complex layers of short- and long-term projects, intertwined agendas and dense webs of commitment. For them, serving their constituents (i.e. their business units) is a battle for resources. Even mammoth companies have finite resources so “Job One” of every executive boils down to securing what’s needed from the central pot. Staking a claim in the corporate coffers. It’s a zero sum game. They need to defend next year’s funding – and grow it. Not everyone is playing nice.
In other words, startup executives are closely knit at the top because their success is deeply interdependent. There are scant people and resources, so everyone’s synchronization counts. They rise or fall as one. In contrast, the successes of executives in large firms can be fairly independent. Each exec represents a large, encapsulated constituency that can rise or fall independently of (and sometimes at the expense of) other peer organizations within the corporation. Startups tend to be more dependent across executive layers. Big companies are more dependent within executive layers. One incentivizes collaboration, the other incentivizes competition.
This isn’t to say all businesses are the same – some startups are highly competitive while some large companies are very collaborative. Rather, the point is merely to illustrate how the structures and incentives of organizations can evolve with scale, often subtly and unbeknownst to the execs themselves. There’s a natural migration from collaboration to competition. The question is, is it a good thing? What’s the price when we stop playing nice?
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Indeed. Well done Thomas, I’ve seen this over and over again as companies grow.
It’s a shame that things evolve this way although it’s often about the culture leadership creates. It’s possible to have scale and cooperation – albeit rare.