Bill Taylor, in his Practically Radical blog, over at Harvard, says that the lesson here is that size, as a strategy in itself, is no longer enough. Companies get big because it’s a sign of success and it gives them the muscle, the clout, to carry on getting bigger – their buying power increases, economies of scale kick in, suppliers offer them favourable prices, competitors can’t match their marketing power, blah, blah, blah.

But, says Taylor, if you haven’t figured out how to harness the smarts of the loads of people that work with you, then you are part of the ranks of ‘big and stupid’ companies. And your days are numbered because you aren’t close enough to the customer.

Taylor doesn’t explicitly say this, but when you get really big, you have enough critical mass in terms of brain power to be able to do the ‘wisdom of crowds’ thing – as long as you simplify, streamline, strip out bureaucracy, keep people close to reality so they aren’t cushioned from the world by your very size, then bigger and smarter is what you become.

Only very few big companies do that. Most remain big and dumb. But, they don’t care. Because they think they are big and strong and the odd customer here and there who doesn’t fit their ‘customer service policy’ doesn’t matter. Yeah, right.

“Pete Carril, the Hall of Fame basketball coach, has a trademark expression that sums up the relationship between size and success. ‘The strong take from the weak,’ he likes to say, ‘but the smart take from the strong.’ If you can figure out, as Jack Welch did, how to add to your company’s muscles without atrophying its brain, then maybe you’re not too big to succeed. But most big-company leaders, who don’t share Welch’s fervor for staying close to customers, better figure out how to make their organizations smarter — or they will keep getting weaker.” – Bill Taylor