Inside Conversation: Why do big Organizations go "bad"?

I am adding Kathy Sierra to my list of people I would like to meet. I just read her post: Subvert from Within: a user-focused employee guide. Its funny how many times you come across a great piece that happens to be relevant to what is in your head at the moment.

Yesterday I was having a comment conversation with Kris in a post from Future Tense. We were debating, among other things, the nature of large organizations. I spent a good deal of time last night asking my self the question: Why do large organizations typically have such a hard time being personal? The story always goes, " ... as a small company they were so cool and listened to users and employees enjoyed working there...then they got big and now they don't care about people (inside or outside) just about satisfying Wall Street."

Why is this story so consistent and persistent?

One theory I have has to do with Passion and Vision. Start-ups ooze passion and vision. Founders start businesses because there is a visceral need to do what they are doing. If they do it well they make money, but money was not the primary objective, just a means to an end, delivering the vision. If things go really well, the organization needs to grow. At this point a lot of people join the organization because they see the money not the vision. Their main passion is for the money, power, etc., which are the artifacts of success, not the creators or drivers of success. We end up with the tail wagging the dog.

What I think happens is that the original founder(s) assume that all of the new joiners inherently share the same passion and vision for the organization, and therefore see no need to evangelize and spread the gospel. This is where the transition to big bad bureaucracy begins. The conflict between those with the vision/passion and those wanting money and power.

I think the way to avoid the trap in the beginning is that once growth begins, job one for the founder is to ensure that everyone that joins shares the original vision and founder's passion. If, as is usually the case, this does not happen, you end up in the world Kathy described.