Success hides danger.
A company in Prime acts aggressively. Its systematic approach to growth and development extends beyond product or market strategy. It pertains to corporate strategy and policy and deals with the processes of management, structure, staffing, and rewards. They are integrated strategies for continuous maintenance of the portfolio of products, markets, leadership, and so forth. Prime manages its market environment: now with flexibility, now with control, now with a nicely calibrated measure of both.
But success hides danger. It creates a false sense of security. Prime companies are growing in many ways, starting new subsidiary companies and churning out more new products every year. The new products create new market niches that garner sales. But because they are growing so quickly, those companies dont have enough well-trained employees to take advantage of every opportunity. Clearly, the major problem of an organization in Prime is not cash flow, setting of priorities, or internal conflicts. The Prime organization suffers from a dearth of managerial depth and talent to match its opportunities for growth.
Normal problems of Prime
The company never seems to have enough of the kind of talent it needs, and it is engaged in a continuous search for more and better people.
Lack of awareness that the aging process begins in Prime. Management must take action to retard the aging process while the company is still in Prime.
Abnormal problems of Prime
The headquarters staff gains more and more authority, which it takes from increasingly disempowered staff on the line.
The finance and legal departments become more powerful than marketing and sales.
The finance department makes budgets, which top management approves and then delegates to the heads of divisions.
Rewards are based on short-term results only.
Only a minority of the companys stockholders, if any, are company employees.
Relying on past successes, the company depends on its tried and true lines. Only a small portion of revenues comes from products that did not exist three years ago.
Decision making is centralized in the leader.
The organization depends on a single leader for its development and growth.
With no clear mission, the company repeats the past rather than inventing the future.
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