It’s why companies like Hewlett-Packard Co. and Xerox Corp. and International Business Machines Corp., which were once radical disruptors, now seem like slow-moving supertankers: hard to capsize but not exactly nimble. You can see the process happening now at firms like Microsoft Corp., and even Apple Inc. And in a decade or so, you’ll see it happening at Google Inc. and Facebook Inc. It’s an inevitable part of the process of aging.
Old organizations definitionally have a lot of longtime stakeholders. And in a sort of ecological process, those stakeholders have been selected for a certain amount of fitness for their environment, which is to say that they are good at doing things the way they have always been done, and they like things the way they are. They are averse to any sort of big change, and they will fight you with every tool at their disposal, from open warfare to passive-aggressively going through the motions on everything you ask them to do. That’s why organizations in crisis frequently need to fire the majority of their staffs to turn things around — and, more than once, an organization that has done so has found that it’s still stuck with the same corporate culture that wasn’t working before. As sociologist Gabriel Rossman told me:
“If new entrants assimilate to whatever is the majority at the time they enter, and if new entrants trickle in slowly, then the founding culture can persist over time, even if over the long run they make up a tiny minority.” This is why Americans speak English even though more of us are ethnically German or Yoruba. In linguistics and sociology, it’s known as the “founder effect.” In corporations, it’s known as “how we’ve always done things.”
The CFPB is doing a good thing by taking a radical approach. But it can only do that because it’s a brand-new agency. In 25 years, if the CFPB is still around, I can virtually guarantee that it will have all the turf wars, bureaucratic inertia and so forth that has hobbled the Department of Health and Human Services. Not because government agencies are somehow especially awful, but because every organization calcifies over time.