Elephants vs. Mice

Today’s announcement that the conglomerate ITT Corp. is planning to split itself into three companies has observers suggesting that in the corporate world these days, bigger isn’t necessarily better.

“More and more companies are coming to the conclusion that it’s better to be smaller and nimble than a slow-moving Leviathan,” CNNMoney declared on the heels of the ITT news.

Actually, Peter Drucker came to that conclusion more than 20 years ago, and saw a trend emerging even then. “We have moved away from the worship of size that characterized the first three quarters of the [20th] century and especially the immediate post-World War II period,” Drucker wrote in his 1989 book, The New Realities. “We are rapidly restructuring and divesting big business.

[EXPAND More]“Increasingly,” he added, “the question of the right size for a task will become a central one. Is this task best done by a bee, a hummingbird, a mouse, a deer, or an elephant? All of them are needed, but each for a different task and in a different ecology.”

In a lecture delivered two years later, Drucker used even stronger language, suggesting that “we are shifting from a world in which bigness matters to a world in which bigness is irrelevant.” He went on to say that “size is functional, and the advantages of bigness are gone with information. And so we have a very real question: How do we make this transition to a world in which yesterday’s bigness no longer helps and is actually in many cases a severe disadvantage?”

What do you think? Has bigness generally become a disadvantage for business? Will we see more corporate giants breaking themselves into pieces?[/EXPAND]