As an insurgent, your company declared war against your industry on behalf of underserved customers. What you lacked in size, you made up for in speed, with every function focused on customers and the front line, working together to tackle customer issues quickly. This relentless experimentation not only helped your customers, it also produced a constant stream of innovation that was a major engine of organic growth.
But as you grew bigger and more bureaucratic, internal issues stole attention from customers. You now spend more time optimizing functions (and negotiating among them) than you do with your customers. Innovation is handled by a centrally controlled pipeline far from the front line. Customers are neither involved… nor welcome. And growth grinds to a halt.
Sound familiar? Continue reading
In their book Why Nations Fail, an examination of the reasons for the prosperity of some nations and the poverty of others, Daron Acemoglu and James A. Robinson include a strong critique of the international aid community. Using Afghanistan after the fall of the Taliban as an example, the authors paint a picture of ineptitude as dozens upon dozens of World Bank and NGO officials descend on the country at great expense, siphoning off resources and inadvertently weakening the war-torn nation’s already fragile infrastructure.
I was particularly struck by a story about villagers in one remote area of Afghanistan who heard over their radios about a multimillion-dollar initiative to restore shelters that had been damaged during the fighting. No aid arrived for months. Of the money promised, the authors write, 20% was used to cover the United Nations’ overhead costs in Geneva. Another 20% went to an NGO. Three more layers of bureaucracy each took a cut as well. Finally, the money left over was used to purchase wooden beams at inflated prices through Western Iran. When these beams were finally ready, they were delivered to the village by a warlord—again at inflated costs—but were too large to be of any use for building shelters. Ultimately, the local villagers burned them for firewood—$20 million worth of firewood. Continue reading