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March 9, 2006

Rules that Prove the Exception

This brief item is one of the occasional Archestra "bookmarks" to research or researchers.

In a discussion titled Management May Be The Ultimate Limit On Growth, John Parkinson's March 6th, 2006 post on the eWeek blog pulls to the surface an issue broadly massaged in many Archestra pieces, which is: the dominance of management as a factor of any return on investment.

With apologies to more strict research, and with heavy credit for inspiration to Paul Strassman, coverage of this "return on management" will likely always be a feature in the Archestra collection. My only gripe is that, seemingly, each time the idea comes up in a new place elsewhere, it shows up as if it is a new discovery. On the bright side, it keeps getting validated again and again.

Writes Parkinson:

GE's "core" is actually a system of management that is very nearly perfectly aligned to its corporate culture and chosen operating model. This system was put together under Jack Welch and allowed GE to essentially run any kind of business it wanted to...The challenge GE faced (and that Jeff Immelt is I believe steadily addressing) is that eventually, just about everybody who could tolerate working in the GE system was already in it—or at least the attrition and replacement rates were in balance. When this happens, you either have to stop growing or change the system.

But again, the full eWeek posting speaks for itself, so click here to reach it.

Posted by Malcolm Ryder at March 9, 2006 2:31 PM

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