Too Big to Succeed

Lately I have heard the term "too big to fail" so often its use has become stomach turning. I have observed really large organizations - businesses, governments, non-profits, churches - from the inside and the outside and have begun to wonder if the term should be turned around.

Instead of an organization being too big to fail; if it continues to grow, does an organization finally reach a size that makes it too big to succeed.

Small organizations exist to provide services and sell goods to customers. Minimal energy is spent on other activities such as those aggravating necessities to continue operations, retain employees, pay taxes, etc. Ethics manuals, for instance, tend to be of the single page variety - do not do anything illegal, do not do anything you would not want your loved ones to read about in the paper tomorrow.

Larger organizations, on the other hand, spend significant energy maintaining their existence, keeping their stock price up, and keeping a solid public image. To maintain their existence, they need to manage problems, employees, customers, public opinion. Policies must be developed. The single page ethics manual becomes a volume that references other volumes that must be maintained and approved by legal and HR and ... The service providing and product selling become less important while providing more for less becomes more important as fewer employees who directly contact customers support more layers of employees who support the organization.

Eventually, the large organization will collapse on itself because it has become so self focused it can no longer adapt to its customers' changing needs and sustain itself. When it fails and breaks up into smaller pieces, smaller organizations will spring up to provide customers with goods and services and the cycle will begin again. If, however, the organization is propped up because "it is too big to fail" the failure date is only deferred until the failure is larger and more devastating than would have occurred naturally.

The problem with the "too big to fail" strategy is that once you start down the path, it is difficult to go back. I believe our society still has the opportunity to leave its current path. The next time a large organization is about to fail we should reject the temptation to prop it up or let it be taken over by another large organization. Instead, we should let it fail and encourage those new small organizations to rise from its collapse and go forward.