Bureaucrats and innovators, part two

This is from Peggy Noonan’s column in the Wall Street Journal today:

Then he turned to the rise and fall of various businesses. He has a theory about “why decline happens” at great companies: “The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesman, because they’re the ones who can move the needle on revenues.” So salesmen are put in charge, and product engineers and designers feel demoted: Their efforts are no longer at the white-hot center of the company’s daily life. They “turn off.” IBM and Xerox, Jobs said, faltered in precisely this way. The salesmen who led the companies were smart and eloquent, but “they didn’t know anything about the product.” In the end this can doom a great company, because what consumers want is good products.

I agree.  This reminds me of a few of my previous posts where I write about the secret of good business, bureaucrats vs. innovators and bureaucrats and innovators.

Jobs just uses the term salesman in place of bureaucrat and product engineers in place of innovator.

Salesmen stifle innovation by favoring their own projects and restricting other projects.  That lowers the chance that the company will discover something truly valuable for customers.

I’ve witnessed projects that showed early promise get nixed because they weren’t the saleman’s project.  I’ve also seen projects that show no signs of promise continue to get resources, because it is the salesman’s project.  The salesman can sell others (for awhile) that the project is working, even when all measures suggest it is not.

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