The Institutionalization of Process

AKA when previously agile and innovative startups become slow and fossilizied companies that stop releasing new things.

You know how the successful “Valley” story goes: new consumer startup is red hot, attracts millions of users (and funding dollars), releases new features every month that get covered by Techcrunch, and it eventually goes public. Then the innovation ¹ cycle starts to take longer and longer until it becomes pretty much non-existent.

(An example, as of October 2016, of a startup that’s following the upward part of the “Valley” dream? Think Snapchat.)

Once those companies become public, what they usually try to do in order to continue to innovate is to acquire interesting startups so they can inject their organization with new innovative blood. Think Google with Youtube and Android, or Facebook with Instagram and WhatsApp.

But if they fail to innovate with the new blood they might end up like the current sad-stories of these days: Yahoo and Twitter.

So why does this happen? Here’s an interesting hypothesis:

(…) it’s that people get confused; companies get confused. When they start getting bigger, they wanna replicate their initial success.

And a lot of them think “Well, somehow, there’s some magic in the process of how that success was created.” So they start to try to institutionalize process across the company.

And before very long, people get very confused that the process is the content.

(…)

We had a lot of people who were great at management process. They just didn’t have a clue as to the content.

And in my career, I found that the best people, you know, are the ones that really understand the content.

And they’re a pain in the butt to manage, you know? But you put up with it because they’re so great at the content.

And that’s what makes great products. It’s not process, it’s content.

Food for thought, eat it at your own discretion.