Business is Slowing Down

[xoxoxoBruce]

The business sector of the economy is doing pretty well according to most pundits, unless they're touting a book they wrote that says it isn't. But Fortune Magazine says business is slowing down in another way.

Across my travels, I get to talk to hundreds of top managers at the world’s largest companies, and they share a common complaint: “It’s just so hard to get stuff done.” Such bureaucratic frustrations probably date back to the Medicis. But at CEB we’ve collected a wealth of data that indicates a clear and troubling reality: Most business activity is slowing down, not accelerating. In benchmarking the speed of key processes across the corporate sector, we find again and again that decision-making at even the most basic level has slowed materially over the past five to 10 years. A few examples from our research illustrate this trend.

I'm wondering if this is what my buddy working for Bell Labs in Texas bitched about. Everything was fine, they were making tons of money, then the bloat of the middle managers came like the creeping crud, sucking them dry.

Hiring a new employee, for instance, now takes 63 days, up from 42 in 2010, according to a 2015 study we did with 400 corporate recruiters. Meanwhile the average time to deliver an office IT project increased by more than a month from 2010 to 2015, and now stands at over 10 months from start to delivery—this particular nugget coming from a study we conducted with 2,000 project managers at more than 60 global organizations.

And when companies need to mesh processes, things get even slower. Multiple surveys we did with several thousand stakeholders in the realm of business-to-business sales revealed some striking evidence of institutional delay. The time required for one company to sell something to another, for example, has risen 22% in the past five years, as gaining consensus from one or two buyers has turned into five or more.

There's a lot more.

[Clodfobble]

Is it primarily a function of the fact that the businesses are conglomerating and thus are themselves bigger? A smaller company always does things faster.

[xoxoxoBruce]

That makes sense, they're congealing, and we know that's slows things up.

[Clodfobble]

Still a bad trend, IMHO. But one that at least will solve itself, assuming we stay a reasonably functioning capitalist society.

[BigV]

I can say that for IT projects, expectations are way, waaay higher than they were from 2010 to 2015. Mobile everything, all the time, wider scopes and wider exposures to security breaches, more data, more data to lose, etc, etc.

Now, I'm smarter than before, and there are more tools than before, but LOTS of shit is just more complicated and it takes longer.

[tw]

Originally Posted by Clodfobble

Is it primarily a function of the fact that the businesses are conglomerating and thus are themselves bigger? .

When a boss does not know how the work gets done, then subordinates are hired to explain it. Of course, it must be explained on spread sheets. So those subordinates need their own subordinates who also tend to come from business schools. Meaning they too need subordinates. Featherbedding is not created by unions. Management that plays money games and knows nothing about the product needs more layers of decision makers. With plenty of blame to go around.

Where this problem was solved, the solution was easy. Sergio Marchionne solved Fiat's problems by firing or replacing most all top management in 60 days.

Ford used another solution - reduce the layers of management from 48 to 5.

Bell Labs, once a benchmark of American innovation, no longer is so productive. Some of its famous graduates include Carly Fiorina who then went on to do massive damage to Hewlett Packard in only four years. She had no idea what electronic instrumentation did. HP's was a world's best (only the best hospital ERs once used HP equipment). So she spun these off for a fraction of their value. Then hired plenty of subordinates to explain what printers and computers might do. They then recommended a disastrous Compaq merger.

Increases in management layers (and therefore excessively long decision making) is a symptom of business school management. Where knowing anything about the product is irrelevant. And where answers must be extracted from spread sheet analysis.

Paul Weaver demonstrates his experience in Ford.

When I went to Dearborn, it worried me that I knew nothing about cars - that I didn't even own one. Wouldn't this be a handicap to a your auto executive, I wondered? The answer was no. People at World Headquarters almost never talked about cars. Even the many colleagues who had risen through the ranks of NAAO and therefore had to know about automobiles didn't show it. ... What did interest my colleagues at Ford ... was the company's position in the auto industry ... It often seemed my colleagues would rather bear any burden or incur any risk than see a competitor gain the tiniest advantage. Issues like the character and quality of our products, or how customers judged and felt about them, struck few sparks by comparison.

Ford Motor at one point literally stopped all new car development. Doing nothing is a best decision when management has no idea about products.