I recently learned that my father has trouble maintaining his balance. While I knew he had been using a cane to assist his walking, I had assumed it was because of the lack of strength and mobility in his legs, having had two knee operations and getting on in years. However, I was surprised to learn that the reason he is having difficulty balancing is that the nerve impulses just arent making it up to his brain like they use to. Therefore, using the cane gives him a 3rd reference point which to use in establishing balance, providing him an additional grounding point and thus making him more sure footed.
That got me thinking that a similar phenomenon can happen in companies. As they grow larger and older, companies can begin to have trouble maintaining balance. Perhaps they start relying on one leg too much, or the market impulses have more difficulty in reaching the companys brain, the managers making the day to day and longer term strategic decisions for the company.
For instance, take a company which becomes totally focused on the sales numbers, committing all their attention to meeting quarterly numbers, and focusing the majority share of the managements time on managing their pipeline. What they tend to do is stop innovating and at some point their products fall behind the competition or get marginalized in the marketplace. When this happens, these companies are in danger of falling over. Similarly, we are all familiar with technology driven companies with high ratios of engineers to marketers. These companies may have innovative and highly differentiated products, but often fail to gain enough adoption to obtain a solid footing in the market and they too stumble.
Even companies that have well balanced ratios of marketing to engineering, marketing to sales, or marketing to engineering, can sometimes appear to have balance but still have a hard time getting up to running speed. Similar to a 2 legged stool, their balance can be weak.
So how does a company achieve better balance? Well, to balance a stool you add more legs. It seems to follow that a business achieves better balance by getting better in more disciplines. So, if a company was strong in engineering and marketing, they could look to improve their sales function. If they were strong in all these areas, they might focus on improving finance or operations.
A company with a good mix of competencies tends to be more stable and more grounded in the marketplace. And they wont need a crutch to keep them propped up!