Tuesday, 10 July 2018

Company Lifespan - Why Do We Care?

A common slide in many change oriented presentations shows the declining lifespan of organisations. (I took this one from Dion Hinchcliffe's session at Digital Workplace Experience in Chicago, and comes originally from this.)

It's interesting data and does provide evidence of a VUCA world. But why why do we care?

Even if companies learn to survive for longer, they'll have:
  • Different shareholders
  • Different customers (usually)
  • Different brands (sometimes)
  • Different employees.

Take the current changes in car companies learning to compete with Tesla and Uber etc. Even if they move into the new digital world, they'll be employing designers and programmers in California, not engineers and machine operators in Detroit.

The only people who benefit from company longevity is the senior leaders and perhaps high potentials in the company, who may survive the complete transformation of the business.
Which is, of course, the wrong focus. We're got enough problems with leaders worrying about their own rewards rather than the long-term performance of their businesses without this further distraction.

For example, wouldn't a company actually be more successful if it managed the inevitable decline of its current activities, keeping and developing its people for the longer term as long as it can. Rather than getting rid of its people as quickly as it can, and recruiting a different set of people with more modern skills, just so its senior leaders can run the company that bit longer? Even if it means the company eventually goes to the wall?

A good example may be Royal Mail - eg I'm currenty watching the RSA's event on Good Work in the New Machine Age, kicking off their Future Work Centre.

Moya Greene, CEO at the Royal Mail Group, suggests their delivery business has lost 10,000 employees whilst a similar number have been created elsewhere. But these platform technology jobs are boring, low quality jobs. Deliveroo doesn't provide the same quality experience, pay or benefits as Royal Mail's delivery business.

They're doing this because Greene doesn't believe that people like change (I think that's debatable, but I can imagine why Royal Mail's experience will have suggested this to her). But isn't the Royal Mail doing the right thing anyway? They don't need to become Deliveroo, it's much easier for a start-up to do this. The best thing they can do is to be the best Royal Mail business for as long as they can. Isn't it?

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