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« Three Common Mistakes in Interpreting the Employment Report | Main | ETF Trading is a Key to Sector Rotation »

February 02, 2008

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Turley Muller

Company A-

This is normal corporate behavior- structured process, - collect the data or information, discuss and determine the best strategy. Distribute action items and tasks for ad and launch.

A, textbook bureaucracy everyone contributes and every debates and decides on what to do. Maybe have a committee or project team votes in it. Employees work better together. But, it's a slow process. And suffers from groupthink of sharing one mindset. Dangerous in that regard.

Company B-
This only works in certain environments. If employees get free reign to try ideas, they will probably get in a fight about over it which should be tried next, or oh I have and Idea and no one listens. Competition turns sour It does get different think out there.

With the right people, sharing the same goals it's a powerful strategy because human capital is developed from trial and error, learning. Independent decision making, cooperation.
It's the best way, but internally it could turn into a circus if there is no direction and cooperation.

Company C- Is the key "decider" aware it came from an outside source? Are employees entertaining outside source so they don't have to come up with their own solution?

I assume not, but I could imagine it though. Companies use outside sources all the time, consultants $$, get ripped off often. But, it works well because, everyone puts in there thoughts and comes to general understanding or specifics issues, and then the decision is out of their hands so take or leave it, everyone has given input on the issue and then it's up to the bigwigs.

C- has the best perspective, since ideas coming outside the firm, all the departments interview/proposal, and discuss. and then you have a the reporter that brings in in the ideas to executive committee, there is a real broad opinion and likely not to suffer from the groupthink of a single mindset.

what is best is having broad perspective of ideas and diverse thinking and input. That comes at this risk of alienation.

SI

A for secrecy mandated from top to bottom, B for trial & error with ideas going from bottom to top, C for cathedral with high priests in solemn attendance.

Model A makes sense only if there is a great leader who can deliver big punch with the release - iPod or iPhone comes readily to mind.

Model B is closest to the free market ideal and works when there are rewards commensurate with risk, i.e., a person/group that comes up with a product that rescues the company gets something substantial in return. This is difficult to get to work, for example Motorola had 2 hit cell phones then flops, as there was no reward structure in place, and the company normally operates in mode C. Venture Capital forms use model B for funding most of their companies.

Model C is true of most companies -- design by committee.

A for Apple, B for Google, C for Microsoft.

StockTrader

I think that Company B's method works best and is used by the most successful corporations and that Company C's method describes the behavior of major corporations.

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