The Dilbert comics are pretty good at demonstrating how much waste occurs in really large companies. Large companies, however, usually have enough momentum (or at least inertia) to absorb a heck of a lot of waste. But companies that are moving from being a "Start up" sized company to being a small/mid-sized company don't usually have that advantage.
Over the years, I've read a lot of books on building a business and one of the points that comes up time and time again is to beware of taking your eye off the prize. Or more to the point - don't take resources away from what made you successful in the first place to focus on delusions of grandier.
One of the most common things cited was that many companies fledgling executive teams are embarassed or ashamed of what made them successful and instead try to reinvent themselves as a "respectable" company. So they move away from what made them successful and focus on making products and services that they think are more prestigious. The results are predictable -- disaster and often the end of the company.
Some of the warning signs (paraphrasing) includes:
The things to look out for included:
- A desire to patent new stuff regardless of whether it needs IP protection
- A desire to trademark new stuff regardless of the value of the IP
- A desire to obtain media coverage on the company at the expense of products and services
- A desire to promote unproven ventures at the expense of promoting the company's core products and services
- A desire to pull resources from core products and services to put them on the pet project of an executive
- Hiring based on internal empire building rather than a need to achieve core company objectives
The phrase "pride before the fall" is not an empty phrase. It is very true. The desire for corporate respect can override sound business judgment.
The start-up with the ugly website selling geeky stuff that changes its site to having a picture of a female model in a business suit with a pen with some meaningless phrase with high-minded catch-phrases that don't adequately describe the company's business objectives is something a lot of people have probably seen. During the dot-com bomb, many Internet start-ups skipped the first step and immediately jumped to the second step.
Over the past couple of years, Stardock has grown tremendously. Our revenue has increased nearly 700% in the past 5 years.
And where has that revenue come from? Basically two sources: Object Desktop (our suite of desktop enhancements) and the game franchise of Galactic Civilizations. We do make sizeable amounts from other sources, but you take away resources from those two things and we become a much smaller company in time.
So as we expand our company, the challenge is to ensure that we aren't taking away resources from what made us succeed in the first place. Instead, we need to bring on new resources to put into related ventures. Things that build on our existing success but don't supplant what we are already doing that works well for us.