Interlude - Index of

Hypergrowth | 73
My first experience with “stodgy old companies” occurred
when we started selling to them in the late 1990s. I went to
visit companies like Ford and General Electric, and their culture
baffled me. We would talk to information technology (IT)
people managing millions of dollars of budget, but they had no
autonomy whatsoever. As near as I could tell, their companies
had teams of accountants with green eyeshades and sharpened
pencils who dominated every decision. Crazy!
The more I learned about these companies, the more I
understood the logic of their structure, and that helped me
understand our own culture. In a hypergrowth company, you
optimize everything for growth. Trimming IT spending from
5 percent of revenue to 4 percent might seem like a good
plan, but if it slows your growth, you’ve made a terrible mistake.
Better to waste a little money and keep on doubling.
To achieve this, you design a decentralized culture. You help
people understand the big picture, warn them of the challenges,
and then turn them loose. Sometimes they screw up,
but more often they find and fix problems that never would
have occurred to you. Things are changing so fast that centralized
planning is impossible. Instead of focusing on process and
control, you focus on trust and enablement.
It is completely different for a mature company that dominates
its market and doesn’t expect much growth. If you
can’t increase revenue, then to improve profitability you must
reduce costs. In this case, trimming IT spending will increase
earnings by the same amount, which should drive up your
share price. The same strategy that was a terrible mistake
in hypergrowth makes great sense here. When things aren’t
changing very fast, centralized control can work. If you identify
a cost savings, standardize it and push it through the whole