Why Can't Existing Companies Change?

Three ideas on why existing organizations find it hard to disrupt their own markets (from Fall in Love with the Problem, Not the Solution, by Waze’s founder Uri Levine):

• Larger corporations have less risk-taking in their DNA. No one gets fired for making the obvious choice.
• Entrepreneurs and troublemakers don’t last long in large organizations.
• Ego

Say, for a second, that you have a $1 billion business across three geographical divisions and two product lines, and your top leadership team consists of those five leaders (running those five P&Ls). What exactly are you going to tell them? That you’re going to create another division in the company to build your future and that this future is more important than the company’s main line of business? Or that you are building another P&L that is going to lose money in the next five years? It’s a leadership dilemma: If you decide this new division is more important, you’ll have a problem with the existing part of the organization. If it is not important, though, the new division will bleed cash until killed sometime in the future (and way too late).

Not impossible, but definitely hard.