Around the table sat twelve very educated, very intelligent scientists and leaders of scientists, at the sprawling corporate offices of one of the largest pharmaceutical firms in the world. The subject was the presentation of research by a tiny biotech company, conducted over a two year period. The hope of the presenters was to establish a collaboration with “Big Pharma” in order to accelerate progress towards the commercial introduction of the biotech company’s unique technology.
Outside, the lush green of a New England spring matched the placid faces of the assembled corporate denizens who took in the content of the slides presented, one by one. After the presentation was over, Paul, the coordinator of the meeting, escorted the hopeful biotech entrepreneurs through the quiet hallways.
“That went well”, Paul said. “I’m glad we had a chance to meet this morning for breakfast to prepare.”
The biotech company CEO asked, “How do you know it went well? No one seemed all that interested in our information.”
“Oh, you wouldn’t see much overt enthusiasm in this group as a rule,” Paul said. “But I could tell you struck a chord.”
“How do you know?” asked the CEO.
“The most influential person in the room, the Senior Vice President, stayed through to the end of the meeting and said goodbye personally”, Paul explained. “That caused the rest of the attendees to stay as well. The next step will be to follow up in two weeks to see if anyone has questions. If the Senior Vice President has one or two, then everyone else will have five or six. If the Senior Vice President has five or six, then everyone else will have a dozen. If the Senior Vice President feels the questions generated are sophisticated and related to the company’s strategy, you’ll be invited back.”
The CEO pondered this a moment, recognizing the political structure of corporate life he had abandoned long ago for the refreshing, straightforward, risky world of creating businesses from nothing. “So we have to go through the hoops, eh?”
The dictionary explains a “hoop” as:
- A large wooden, plastic, or metal ring, especially one used as a plaything or for trained animals to jump through.
The dictionary further reveals the colloquialism:
- to be “put through the hoops” is to go through an ordeal or test
The corporate purpose of hoops can be a mysterious thing to divine. The processes and behaviors that accompany what we all would recognize as “going through the hoops” seem arbitrary, unproductive and distractions from the important work that needs to be done. Showing up at a meeting because a senior executive will be there and you don’t want to be viewed as a slacker is one type of hoop. Another is having to submit progress reports in such detail that you don’t have time to do the things that would actually allow you to make progress. But the day you have to turn in a purchase requisition to buy purchase requisitions, the insanity of the hoops becomes painful.
I believe that the universe is purposeful. It may be incomprehensible, but I think there is underlying method to the apparent madness. In the case of hoops, I think it relates to the need in larger organizations to preserve and conserve, whereas in a small, entrepreneurial company there is less to lose and so the behaviors can be more action-oriented. The risk of action is less than the risk of inaction, while in a large company, the dynamic is reversed. The risk of action in a large company is risk to the individual as well as to the entire corporation.
A big company has gotten big because it achieved revenue and profitability to a massive extent, over decades and decades of growth. With such huge assets accumulated, there is an intense motivation for the organization to preserve that value. And great value is relatively easy to erode, through action that is not comprehensively considered. We have recent examples in business to show that the risky actions of a few people can bring down huge organizations. Arthur Andersen, Barings Bank, General Motors, AIG and many others are poster children from the Great Recession for the need for restraints and limitations within companies.
I think the purpose of the apparently useless and maddening protocols within corporations is to retard action and to homogenize behavior. By slowing action down and by creating more uniform work behaviors, the risk of a spurious action or decision damaging the significant assets of the company is greatly reduced. So is creativity. That’s why Big Pharma invents very little. It buys its innovation from biotech companies who have the organizational character which rewards risk-taking, led by people who have jumped through their last hoop.