Why Great Companies Fail—Even with Great Management

For the Better comes to you bi-weekly with ideas about how and why to build companies focused on human flourishing and stories of the people who are doing it. Other enthusiasms may occasionally appear.

I’ve done a lot of work in the realm of management over the last several decades. As far back as 2008, I was writing about how startups could organize to best accomplish all the kinds of work that contribute to success. I spent years studying the science of management, trying to adapt its principles to make them grow in the hostile soil of extreme uncertainty where startups thrive.

That, of course, led to Lean Startup, and from there to how those same principles can apply at scale in large companies as the Startup Way. I believed management was the pinnacle of organizational success, and as this brief but comprehensive tour I’m honored to be a part of shows (shout out to Frederick Winslow Taylor!), I was far from alone. 

I’m still incredibly proud of that work. Management theory and mechanisms are crucial to company building. But even as I did it, I couldn’t quite ignore the governance issues that surfaced repeatedly: founders ejected by their investors, boards acting irrational, companies betraying their mission to make a dollar. 

I treated these as tactical concerns, always the fault of some individual person making a mistake. It took me many more years to start to see the patterns. After a while, I started to dedicate myself to studying, mapping and (I hoped) learning to control these forces. I had no idea what I was in for.

I’ve come to the realization that there’s – how can I put this? – something else out there. Something that shapes the way organizations form and evolve, for better and for worse, without our input. This is the domain "beyond management" where, no matter how good the systems in place, other forces intervene.

This is where the spooky actions that affect companies, seemingly without anyone making the decision to undertake them, originate. Beyond boards, investors, and compliance, there lies an entire galaxy of constellations and interconnections that produce forces we can’t control with the usual techniques. When multiple organizations interact, new challenges and opportunities emerge that require advanced company-building techniques. Without them, we can’t protect what we’ve built.

Things I’ve Enjoyed Lately 

🔵 Athena: One of the things I enjoy the most about what I do is that every day is a little different. I meet people building incredible companies and doing great things for the world, do my writing and work, and always reserve time for my family. Athena, which offers executive assistants at affordable rates, shares my belief that the key to making the most of everything life has to offer is keeping it running smoothly. I've partnered with them so you can focus on living your life rather than managing it. More info and a discount offer are here.

🔵 The magic of through running

🔵 Major expansion in the human niche preceded out of Africa dispersal

🔵 Western democracies are actually pretty good at war