Help me out here

Thre\’s a well known saying about how when a company moves into a new and luxurious office building then it\’s destined for failure.

Or something like that.

Now what is the exact quote and where is it from? I\’m thinking either Galbraith or perhaps \”Up The Organisation\”.

But does anyone know the full quote and the source? Want to use it in a piece later today…….

36 thoughts on “Help me out here”

  1. there was certainly a saying back in the 90s that any company with a water feature in reception was doomed (if management are willing to drop cash on that, how else are they wasting it?). Certainly since I started looking out for them my FALCO strike rate has been 100%

  2. Don Sull at LBS used it when I was there. He talked about ‘fountains’ as the key indicator.

    Not sure if that helps.

  3. There’s a whole chapter in Parkinson’s Law about this. “a perfection of planned layout is achieved only by institutions on the point of collapse”.

  4. It is Parkinson; I’ll dig it out when I get home.

    I can’t remember a particular quote, but he usually manages pithy summaries of his points.

  5. Another very good example which you might investigate is Raymarine, who make instruments for boats. They built a spiffing new establishment in Portsmouth and went bust some while later.

  6. I recall reading, during the dot-com era, a similar rule of thumb involving the receptionist having a flat-screen monitor.

  7. The beginning of the end for a company is when HR gets a department of its own; the decline is irreversible when the HR boss gets a seat on the senior management team…

  8. It’s a summary of the chapter “Plans and Plants” from “Parkinson’s Law”. I can’t find any ideal quotes, but a good short one is

    “It is now known that a perfection of planned layout is achieved only by institutions on the point of collapse.”

    He then gives examples from the Vatican, the League of Nations, Versailles, Blenheim, Buckingham Palace, and Westminster. Finally he concludes

    “Examples abound of new institutions coming into existence with a full establishment of deputy directors, consultants, and executives, all these coming together in a building specially designed for their purpose. And experience proves that such an institution will die.”

  9. …the decline is irreversible when the HR boss gets a seat on the senior management team…

    I am LOLing uncontrollably. This has just happened at work.

    By sheer coincidence I handed in my notice a few weeks previously. Prescient or what?

  10. “And experience proves that such an institution will die”

    He should have qualified this by saying “unless it has access to unlimited public funding”.

    But then Parkinson, in his worst nightmares, would never have imagined the EU.

  11. I always th0ught that, when a company got the Queen’s Award for Exports or something similar, collapse was about to happen.

  12. May I recommend “How buildings learn” by Stewart Brand, who was inspired by the catastrophe of moving from a wartime prefab at MIT where adapting to changing needs meant cutting a hole in a partition, to a purpose built building designed for the state-of-the-art infrastructure of the period it was an idea on the architects’ drawing board and the retiring commissioners years previously. Another example are new hospitals : the old were draughty but cheap to adapt without trampling on anyone’s ego, and far cheaper to operate.

  13. Parkinson quoted the Ministry of Defence. The Waterloo campaign was conducted from poky office around Horse Guards; the main building in Whitehall was opened in the early 20th C, just in time to launch the Dardanelles landings.

  14. Surreptitious Evil

    The Waterloo campaign was conducted from poky office around Horse Guards;

    The Waterloo campaign was conducted locally, with a limited amount of interference from Horse Guards. It’s all Marconi’s fault.

    The Guards and Cavalry Club in London has, in one of the reception rooms, a wonderful letter (or copy of) from Wellington, during the Peninsular Campaign, to CinC, complaining that he doesn’t have the time to both run a war and to audit stocks of food and equipment. And which would he prefer he directed his efforts to.

  15. Christopher Fildes in The Spectator used to write about companies with “fountains in the foyer” as a signal to sell their shares.

  16. I recall ABN Amro having a very fine atrium. To be fair though, they didn’t get into trouble until those RBOS fuckwits took over.

  17. Also, Herman-Miller Aeron chairs:

    http://www.salon.com/2001/08/07/aeron/

    I had personal experience of this; the company I was working for in 2000 got a new office, and we were invited to tour it before we moved across. “Oh, those look like nice chairs”, I thought, “What make are they? I might get one for home… oh, Herman Miller… where have I heard that nam… Aw, crap!”

    Sure enough, redundancies all round within the year, and another round 10 months after that, which included me.

  18. Alex-

    I think the interesting thing about the dot.bomb/aeron culture was that they went for the “atriums” first, before even building up a company to mismanage into ruin.

  19. Also, Herman-Miller Aeron chairs:

    This is almost uncanny: I just clicked through the link, and was somewhat surprised to find my own office chair. Sure enough, we moved into a shiny new tower in Lagos last April, and since we have found ourselves having to sell one of our assets leaving everyone (well, everyone not Nigerian) wondering why the hell we built that tower when we have only one moderately-sized operation. We’ll not go bankrupt, but the decline is there all right.

    The Economist had an article on this a decade or so back, and contrasted the failures with the likes of Tesco and Wal-Mart who both have their old and very unspectacular HQs.

  20. I certainly noticed that any company I worked for in the UK which moved into a fancy new building and replaced the rattly old tables with fancy new ones was not long for the world.

    That said, my current employer has an atrium, but they’ve been in that building for the best part of fifty years and we put buckets down whenever we get lots of rain because it’s a lot cheaper than replacing the seals in the fancy glass roof.

  21. Ian B –

    I think the root cause is the same, though; too much money sloshing around, and people looking for ways to spend it. Normally it takes years, decades even, to get to that point. But dotcoms found themselves getting stupendous amounts of money very early on.

    Once you’ve invested in all the boring stuff that gives the greatest expected returns, it’s hard to know what to do with any excess. Arguably, the smarter companies start a sort-of capital wealth fund and start playing the stock and/or forex markets to make a little extra on the side. But if the original founders are still involved, they may object to a company departing from its original raison d’

  22. It’s all about Milton Friedman: people are far more careful spending their own money than other people’s money.

    Find a business owned by half a dozen people and they’ll be working out of converted farm buildings in Oxfordshire or an anonymous office block in Camberley.

    Then look at say, the situation at The Guardian. I guarantee you that if Will Hutton, Alan Rusbridger and Liz Forgan co-owned the Scott Trust that they wouldn’t have moved into fancy pants offices 5 years ago full of iMacs*. Now, I’m not saying they don’t care about The Guardian, but they don’t care about it to a level where it’s destruction is going to personally hurt them. In 10 years time when the Scott Trust runs out of cash, the current lot will be in their 70s, living on pensions.

    *I’m not saying that Macs aren’t good for business, but the iMac is nuts. It makes more business sense to buy Mac Minis and attach them to a good £200 monitor.

  23. “I think the root cause is the same, though; too much money sloshing around, and people looking for ways to spend it.”
    No.
    It’s too many people sloshing around.
    Old saying.
    The Devil finds work for idle hands.
    Busy people don’t have time to dream up this shit.

  24. It is definietly Parkinson – can’t remember where but it on the principle that if you move into spiffing new offices you spend all your time polishing the new offices rather than working.

  25. Any fool can tell you what’s bad: I’ll tell you what’s good. There should be round tables in the tea room with white surfaces and a supply of magic markers so you can sketch out your ideas as you talk shop.

    If you don’t have a tea room you’re doing it wrong.

  26. The canteen is one of the most important places in the building. Yep for that one. The food should be appetising, partly because this does huge things for morale, and secondly because it encourages people to stay in for lunch, and it’s very possible that they will be doing the talking shop thing with other workers (ie they will keep working) while doing so

  27. Early warning signals of impending company failure

    Rolls Royce with personalised number plates

    Fountain in reception

    Flag-pole

    Recent move to modern offices

    Queens Award to Industry (UK only)

    Whizz-Kid vice chairman

    Unqualified or Elderly Accountant

    Auditors who grew with the company

    Recent change of company bankers

    Market Leader products

    Recent announcement of a technological breakthrough

    Recent announcement of a major order with Nigeria

    Happy workforce with no strike record

    From “Directors Responsibilties and Liabilities” by Peter Souster, who attributes it to Bill Mackey of Ernst and Young, but I suspect it is a lot older than that.

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