How organization can be stiffled by their mindset about people

After working some more and see more workings of other organization, i’m impressed by the extent of the role of people in the organization.

Saying “organization is all about the people in it” make sense, since organization is nothing but a group of people working toward a (supposedly) common goal or purpose.

But to see that all competitive advantage is created or destroyed by people in an organization is…scary, a company could build a dominant business for decades, and then they have the wrong mindset about people and everything could go bust or slowly dies.

What constitute a company’s mindset to people aspect:

– what the members think are the qualities of a person with a culture fit

– what the members think about what others in the organization would think about the qualities of a person with a culture fit

– compensation mix (e.g. “we’re want to grow so we need to pay for good people with good pay, bonus, and perks”, “we’re big, we want to stay dominant, and we will pay for good people with good pay and perks”, or “we’re big, we’re stable, we don’t pay much, but there’s a small chance of you losing your job”)

– how people are expected to work (e.g. “you know, we’re all flying solo here, so just do the job your boss allocate to you and it will all trickle down”, “here work are done by those who build consensus leveraging their personal relationship with their co worker”)

– how promotion decisions are made (e.g. “you need do this and do that if you want to be in that place”, “it’s an open game baby, open game, you want that post, then you need and may try to kick the guy who’s sitting there right now”, “we’re very concerned with seniority here, the other employee and the union would throw fits if we promote someone so young, despite that person being capable, we don’t want to rock the boat”)

It’s ridiculous, how companies could be blind to the long term impact of their mindset to people, how their mindset means slow death to their company. This is especially true for a dominant company in a developing market, the company’s sheer size and scale would nearly guarantee good financial result year after year, despite having a passive aggressive culture, year after year the company can justify poor compensation and promotion policy, saying “look man, everything’s ok, we have good financial results” while strong talent (experienced and fresh) are leaving the company, making the company to be more saturated with less than stellar people, which in turn fertilize the poor mindset toward people policy.

What’s even more tragic is that such company could justify their poor people policy for many years, while smaller competitors constantly engaging on them, the company would say “we have a strong network effect, nobody can touch us in our game”, well that could be true, until (what i can i think of right now) 3 things happens: a. your customer starts to see value in the competitor’s offering, b. your competitor gang up to achieve your network effect, c. technology shift make a viable substitute to your existing network effect.

As the book “Upgrading” said, A people hires A people, B people would hire C people, C people would hire D people.

So either companies create people policy that seeks, rewards, and harness A people, or it’s facing a downhill trajectory.

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