Large organizations don't worship shareholders or customers, they worship the past. If it were otherwise, it wouldn't take a crisis to set a company on a new path.
Interpretation
The quote suggests that organizations tend to cling to past successes rather than innovating, only changing when forced by crises.
Gary Hamel's quote reflects on the tendency of large organizations to prioritize historical achievements and established practices over the dynamic needs of current stakeholders. This ingrained behavior often leads to stagnation, as companies wait for a crisis to motivate significant change, highlighting the need for proactive adaptation rather than reactive measures to evolving challenges.
In practice
In a corporate strategy meeting to discuss future innovations.
The real damper on employee engagement is the soggy, cold blanket of centralized authority. In most companies, power cascades downwards from the CEO. Not only are employees disenfranchised from most policy decisions, they lack even the power to rebel against egocentric and tyrannical supervisors.
The biggest barriers to strategic renewal are almost always top management's unexamined beliefs.
To create an organization that's adaptable and innovative, people need the freedom to challenge precedent, to 'waste' time, to go outside of channels, to experiment, to take risks and to follow their passions.
If customer ignorance is a profit centre for you, you're in trouble.
It doesn't matter much where your company sits in its industry ecosystem, nor how vertically or horizontally integrated it is - what matters is its relative 'share of customer value' in the final product or solution, and its cost of producing that value.
The single biggest reason companies fail is they overinvest in what is, as opposed to what might be.
One of my business partners would remind me that no fashion line lasts forever, that we would hit the down curve eventually, and that we needed to look for new brands that complement the first one.
Cutting prices or putting things on sale is not sustainable business strategy. The other side of it is that you can't cut enough costs to save your way to prosperity.
Statistics suggest that when customers complain, business owners and managers ought to get excited about it. The complaining customer represents a huge opportunity for more business.
The business of America is business.
I think that, too many times, business has been seen as acting in its narrow self-interest rather than, essentially, contributing more broadly to society. I think a lot of that is unintentional; I don't think that many managers are deliberately trying to be unethical or are not trying to be sensitive to social needs.
China is very entrepreneurial but has no rule of law. Europe has rule of law but isn't entrepreneurial. Combine rule of law, entrepreneurialism and a generally pro-business policy, and you have Apple.
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