Summary: Organization matters. That was my thought when I read about investor Eddie Lambert and Sears. In 2002 Kmart went through bankruptcy. In 2003 Lambert recapitalized the firm and took it over. In 2005 they bought Sears and began to consolidate the two retailers.Some org charts look like hierarchies, some like bicycle wheels. Sears’ now looks like China’s Warring States Period: 40 autonomous businesses competing for attention and marketing. The theory is that competition brings out the best in us, and that markets in everything allow important information to emerge and drive better decisions.The practical effect is that this works, sometimes. I personally experienced the culture shock of moving from a clubby New England banking culture to a scrappy no-holds-barred New York model back in 1989. Sometimes the struggle to survive makes everyone more productive, but sometimes it’s like a feeding frenzy among sharks: only the biggest and meanest—not the talented, innovative, or efficient—survive.Firms exist when people work better together than apart. If Sear’s people can’t cooperate, there’s no reason not to break it up.
