6 March 2013

Companies can be worse than plant roots in self/non-self recognition

Competition and miscommunication among company departments harms the organisation: the story of Volvo
George ILIEV


As the roots of a plant grow, the root branches of the same organism recognise each other (the underlying mechanism for that is still unclear) and stay out of each other's reach as much as possible: "plants develop fewer and shorter roots in the presence of other roots of the same individual". This is an evolutionary adaptation that minimises direct competition for nutrients between parts of the same organism. On the contrary, the roots can speed up their rate of growth if surrounded by roots of other plants, in order to be successful in competing externally.

Sadly internal cooperation is not always the norm in the corporate world. Company departments can be notoriously bad at synchronising their actions and sometimes even compete against each other. A case in point is the following story at car-maker Volvo in Sweden in the mid-1990s:

Volvo was accumulating a large stock of cars painted green. To reduce the stockpile, the sales department began selling green-coloured cars at a discount. Unfortunately no one told the manufacturing team down on the production line. No sooner had the production managers seen demand for green cars perking up, they immediately ramped up the production of green cars to build up the inventory (a typical supply-chain phenomenon known as the bullwhip effect)

Thus the cooperative plant roots seem to avoid "biting the dust" even if they literally do this all the time.

3 comments:

  1. Here are two more corporate self-harming stories, on Sony and the potato industry. One has a happy end for the player involved. Guess which one?

    1. "Why no one’s listening to a Walkman" (Financial Times, January 18, 2013)
    "Sony seemed brilliantly placed to develop [the digital music player after the Walkman] since it had a music division and consumer electronics department. But the different departments would not collaborate; on the contrary, there was such rivalry that in 1999, at a consumer electronics fair, they actually launched competing products. These cannibalised each other – and created space for Apple to launch the iPod, which soon swept the market." (http://www.ft.com/cms/s/2/ca14070a-603a-11e2-b657-00144feab49a.html)

    2. "Following the footprints" (The Economist, June 4, 2011)
    "[As] Walkers was buying its potatoes by gross weight, farmers were keeping their potatoes in humidified sheds to increase the water content. Walkers then had to fry the sliced potatoes for longer to drive out the extra moisture. By switching to buying potatoes by dry weight, Walkers could reduce frying time by 10% and farmers could avoid the cost of humidification. Both measures saved money and energy and reduced the carbon footprint of the final product." (http://www.economist.com/node/18750670)

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  2. "Octopus arms do not become tangled or stuck to each other because the suction cups have chemical sensors that recognize octopus skin and prevent self-attachment." (Wikipedia)

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  3. GM was notorious for having different departments launching car models in competing segments: http://www.allaboutlean.com/automotive-market-strategy/market-segmentation-us-automotive-gm/

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