Good stuff:

While we often read about economies of scale, we probably should pay more attention to the diseconomies of scale.

When a solid sphere doubles its radius, its surface area increases 300% while its mass goes up 700%. The same ratio seems to affect organizations. As they grow, the center becomes more remote from the surface-the part that actually is in contact with customers, competitors, and new technology. The gravitational pull of the increased mass draws more and more efforts inward where they focus on internal processes, procedures, rules, expenses, and politics.

Internal forces soon overwhelm the organization’s ability to respond intelligently to external events. As Jack Welch puts it, the company “has its face toward the CEO and its ass toward the customer.” An odd posture to be sure since as Peter Drucker has preached for a half-century “the only profit center is a customer whose check hasn’t bounced.”

“ass towards the customer” happens way more rapidly and often than people might believe, or even believe possible. No matter what I do or where I go, I try my damnedest to keep the customer front and center. I fail, sometimes, and it’s rare that I don’t regret it.