The San Francisco Bay area is a world of micro-climates and diverse ecosystems. Traveling a few miles in any direction and you can witness the vast forest ecosystem. The temperate climate, coastal fog and rainfall are the perfect ingredients for bio-diversity. It’s also home to another vibrant and diverse ecosystem, technology. Growing up from a vibrant ecosystem of startups, some of the largest tech companies in the world are born here.
KJ and I try to spend a bit of time outside, most weekends you’ll find us hiking. We’ll fill up our water bottles, pull on some hiking boots and go explore green landscapes. It’s a treat to wander from eucalyptus groves, to rolling hills. On occasion, we’ll stumble on a well known California native, the Redwood. Walking amonth these giant trees, with car-sized trunks and little under-growth, feels like another world. When luck is on your side, you’ll stumble upon a group of these giants. Given the mystique of the Redwood, a name for these pods must live up to their height. Fairy-rings are smaller redwoods which sprout off the root system of larger parents. For the redwood offspring to flourish, the larger trees need to die off. One of the agents of change for a fairy-ring is fire. The larger parent trees must die off and a fire can clear the way. The dichotomy between the destructive forces of fire, and the re-birth of gigantic Redwoods is one of the great beauties of nature.
A couple of weekends ago we were hiking up in the Mt Tam area, lucky to be in a Redwood grove, and a thought dawned on me. For startups, the market is fire. The market, with it’s ruthless creative destruction, is the base condition for growth and evolution. What about larger companies? True technological disruption, is closer to an 8.0 earthquake than a wild fire. It seems that larger companies are insulated from market externalities that affect startups, using easier access to capital or other moats to protect their business. So in large companies, where does this spark of change come from?
I was recently part of a pretty massive re-org, in which a handful of teams that I had spent the past 3 years growing were moved into another org. Performance of my teams and business growth were not driving factors. To say the least, the re-org stung a bit, but after a time I started thinking about why change is necessary. This brings me back to fire, in larger companies, market externalities on teams and products can take many years to years to materially impact the bottom line. Re-orgs are a catalyst to accelerate change, and in some cases reset the base conditions for the growth. So while painful due to velocity of change, re-orgs are a tool in the toolkit and a forceful catalyst for change. Obviously, if used to frequently the organization gets burned out, so they should be done precisely and quickly.