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Friday, June 24, 2011

People in glass houses have difficulty re-engineering their businesses

Whiskery old joke. Country bumpkin sitting on five-barred gate is asked for directions by holidaymaking couple trying to find their hotel. "Well, I wouldn't start from here," he says, which is absurd and profound at the same time.

I've been thinking of this in a week which has been dominated by stories of major media and entertainment groups spelling out their strategies. EMI is for sale once again, the Guardian and Observer are contemplating a predominantly digital future within five years, the BBC wonder whether they should close a channel or change the daytime output of BBC-2.

All of these are strategies for survival, not expansion. They're the right thoughts to be thinking. But here's the thing. All the thinking about these momentous issues is being done inside massive new architect-designed corporate HQs which have been built in the last ten or so years. The media boom of the 90s provided them with the cash to build their own temples and imbued them with the belief that the expansion would go on forever. But they never dreamed that they would be thinking such frightened thoughts inside them. Ever since these companies - and many other media and publishing firms - moved into their airy new offices they've been shedding the staff they were intended to house and looking nothing like the masters of the universe the temples were intended to exalt.

Like the man on the gate said, you wouldn't start from here.

5 comments:

jnanagarbha said...

Much the same thing happened with Nokia's huge HQ in Finland - in fact I think their boom ended before they even finished the place.

It also reminds me of the way Big Country spent all their money on their Russian adventure, assuming the cash would keep flowing in.

RFM said...

Didn't Sir John Harvey Jones once say something along the lines of, "When you see the ornamental carp in a fountain in a fancy lobby, you know the company is in trouble."

mattlocke said...

There's a theory - the Skyscraper Index (http://en.wikipedia.org/wiki/Skyscraper_Index) which shows that the time a city/country tries to build the world's biggest building is almost exactly the point at which their economy collapses...

Douglas said...

I'm pretty sure Parkinson's Law covers this, together with many other business-related truths which still hold up more than half a century later

Huw said...

and I think RBS built a £350 million new headquarters building just before making the catastrophic acquisition of the Dutch bank which caused them to go tits up.