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.
Wherever we are seeing something getting used, that to us is an early indicator that there might be something that people want. And then let's figure out how to make that great. And then let's go figure out monetization.
I suppose Virgin is an unusual brand in that I suspect we're the only 'way of life' brand in the world. We're one of maybe the top 30 best known brands in the world, yet if you look at the other 29, they all specialize in one area. Whether it's Google, Coca-Cola, Microsoft, etc., they all generally specialize in one area.
My half-baked reading of history is that we continue to go through these waves of entrepreneurial explosion followed by merger mania and consolidation. Out of that come big sluggish companies that eventually collapse under the weight of what they've created, and are killed off by the next wave of entrepreneurs.
When an entrant competitor attacks the low end of any market, the rational reaction of the incumbent firms is to abandon rather than defend it - because the low end is the least profitable of their possible investments.
To grasp organizational life as it is, read novels (!) .... It is my fervent belief that we will never design rational processes that "overcome" such irregularities-don't bother telling that to a consultant. Hence, we should embrace the real, nonrational, nonlinear world with vigor and glee-and develop enterprise and career strategies accordingly.
The NBA is never just a business. It's always business. It's always personal. All good businesses are personal. The best businesses are very personal.
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