Tuesday, November 14, 2006

Why big companies have more high performing individuals than small companies

I'm a few weeks into my job with Big Company.
Things are going well and I'm starting to understand the pattern of things.

I'm being invited to numerous meetings, conference calls, etc.... I receive a new e-mail about every three minutes - sometimes every five.

I was invited to work on a special project - when the project sounded a bit odd I asked if it was someone's boondoggle - the look of shock I received told me Big Company never considers any project, regardless of how special or unusual a boondoggle.

With marching orders in hand, I marched off into the special project. Oddly, much of the very senior-most management is excited about the possibilities. As I investigated further, I found the concept exciting, but a certain condervativsim told me to wait and see what's really there.

If upper management is looking for a killer solution, they must have a problem they're not elaborating - otherwise, why hold such high expectations of anything outside the core product suite?

I'd like to find why they need something so perfect / special and see if fixing the actual problem might be possible.

One thing that excites me is the high quality of my peers and colleagues, even of our subordinates, as well.

In much smaller companies, there is usually not enough business volume to pay everyone well. Instead, you end of with a barbell shaped organization. Extremely high performers on top - well paid, but stressed, as they are carrying the performance of 75% of the organization. The middle is usually in mid-career, underpaid, but usually fairly mediocre or unmotivated to the point where motivation and quality inhibit performance. The bottom rung is made up of very good young kids, bad young kids and disaffected youth who don't try. The small number of very hard working very good young kids carry the other 25% of the company. They work hard and like crazy. Secretly, upper management prays the mediocre underpaid unmotivated managers in the middle don't destroy or demotivate these birght young stars.

Why do you have a many more birght young things than capable middle managers - it's simple - as they are starting their careers there is virtually no cost differential between good and bad new employees. Not so for experienced managers.

Unfortunately, there's little that can be done for bright young things. Once they move up into managerial territory they become too expensive to maintain for many small companies, while at the same time, they are not prepared nor ready to move into upper management.

If you're lucky, they move away before they are disaffected, then they can come back as a member of upper managemenet if they do well in the world.

A high peforming big organization has a lot more revenue and leverage. It's easier for them to maintain a pyramid of quality. Let's be clear though - only high performing organizations maintain quailty performers consistently. I'm glad to be a member of one such company -
Big Company, however I've lived in frustration for many years with the limitations of small companies and their barbell-like quality distribution.


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