15. The Praetorian Guard phase

You only need to look to history to predict how very large organisations might respond to the threat of a new, innovative competitor.

The Praetorian Guard was a military unit in the Roman Empire that served as the Emperor's personal bodyguard and elite troops. Emperor Augustus initially formed the unit to provide protection for himself and his family, and it eventually evolved into a powerful and influential force within the Roman state.

Composed of hand-picked soldiers considered the best and most loyal troops in the Roman Army, they were responsible for the security and maintaining order in Rome during times of crisis, with a mandate to identify and eliminate any threats to the empire. However, as it gained more power and authority over time, the unit became politicised and corrupt and was eventually disbanded.

As organisations (or empires) grow to positions of real scale and dominance in a market, the imperative to fund, sustain and defend existing operations becomes the ultimate objective function for the organisation, as well as the lens through which all tactical or strategic decisions are viewed.

At the same time, as initially functionally oriented startups reach a large scale, often the only way to avoid spiralling operational and org-chart complexity is by re-organising the business into discrete divisions or groups. These can remain oriented functionally, but it’s common for them to organise around product lines.

However these divisions are configured, given the degree of local divisional autonomy they require to operate effectively, the leaders of each division must be fully aligned with the over-arching strategy of the organisation set by the board and CEO. But, of course, this is easier said than done.

If divisional leaders lose alignment or fall out of step with their peers, over time this can lead to divisions turning factional. Worse, the leaders and teams inside divisions can also become so fixated or blinkered on attaining their discrete divisional goals and the associated rewards and incentives, that a degree of unhealthy politicisation can also take hold inside the organisation and the resulting infighting can become a significant ongoing distraction for everyone.

This multiplex of organisational dysfunction will become apparent to the outside world as the number of dumb left-hand/right-hand or contradictory decisions starts to mount up.

It also lies at the root of The Innovator’s Dilemma, where preserving the integrity of the state at all costs results in a corporate Praetorian Guard neutralising all threats, even ‘friendly’ threats emerging from inside the organisation in the form of newer, more innovative products that may one day be needed to replace existing product lines.

Competing with giant incumbents struggling with these realities can be a lot of fun since it’s relatively easy to guess or predict how they may respond to you.

On the surface, it may be the case that they have much more capital, many more people and resources and tons of brand equity and awareness, but it’s also likely that they’ll be struggling with chronic and deep organisational dysfunction.

So, get to it!

GT

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