Rules for company failure

(written by lawrence krubner, however indented passages are often quotes). You can contact lawrence at:, or follow me on Twitter.


29. An organization populated by a majority of incompetents has less than zero net-worth : it is able to destroy other adjacent organizations that are not similarly populated.

30. Incompetence is fiercely gregarious while knowledge is often fractious; the reason for this is that raw ideas transfer more easily through untrained minds than refined ideas transfer through trained minds. There’s a reason why large organisations focus so much on simple messages, pity that difficult problems often have simple solutions that don’t work.

31. Entropy self-selects. Hierarchical and other kinds of entropic organizations always favor solutions that survive within entropic organizations. Thus they will favor easy over simple, complex over difficult, responsibility-dilution over empowerment, accountability over learning, shock-therapy over culture-nurturing. This is the reinforcing loop that brings ever-increasing entropy in the system : entropy generates easy decisions with complex and broken implementations, which in turn generate more entropy. An example of easy decision with a complexity-inducing implementation: this scenario “our company does not have a coherent strategy, as such many projects tend to deliver results that are not coherent, hampering the organic growth of our capabilities.” will be answered by the most classic knee-jerk decision-making pattern “we don’t know how to do X, so let’s overlay a new Y to enforce X”, in this case :”Group together strategic projects into a big strategic program that will ensure coherence”. The difficult but simple option will not even be entertained : “let’s discover our real strategy and shape the organization around it.”

32. Delivery dates have often irrelevant but very simple to understand impacts. Good and bad solutions have dramatic but very difficult to understand impacts. The Entropic Organization will thus tend to make date-based decisions. The Entropic Organization will always worry about the development organization ability to deliver by a given date, never about the ability to find the right solution. There are some very rare cases where delivery date is more important than what you are delivering, but modern management seems to delight in generalizing this unusual occurrence to every situation. People do get promoted for having been able to deliver completely broken, useless and damaging solutions on time. If that’s the measure of project success you can expect dates to rule (even when they continuously slide). After all, if you are not a trained surgeon, and the only thing you are told is that a given surgery should last no more than X hours, guess what will be the one criterium for all your actions during the operation. This showcases the direct link between the constituents incompetence and the establishment of classic Entropic Organization decision-making.

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