How Organizations Get Rich
This article is a part of my Best Reads of the Month section on my website www.mikegorlon.com. Each month I pick one or two articles or blog posts that I find on the internet which I thought were really insightful, interesting or moving. Then I share them with you. You can view the previous month’s articles by going to: https://www.mikegorlon.com/best-reads-of-the-month
December 2019: How Organizations Get Rich
This month’s best read is from a speech given by Jared Diamond in 1999 titled How to Get Rich but it’s not about how individuals get rich. It’s about how businesses or countries can get rich by implementing two ideas.
Jared looked through history which is really just a large amount of experiments of what works and what doesn’t work over time to find out why some groups of people got rich and why some didn’t. Jared found some examples which include a German beer company, a Japanese food company, and the countries that make up Europe, China and Tasmania to demonstrate how it happens.
The two ideas are:
- The appropriate use of fragmentation
- Unity within groups and not being isolated
“We can extract from human history a couple of principles. First, the principle that really isolated groups are at a disadvantage, because most groups get most of their ideas and innovations from the outside. Second, I also derive the principle of intermediate fragmentation: you don’t want excessive unity and you don’t want excessive fragmentation; instead, you want your human society or business to be broken up into a number of groups which compete with each other but which also maintain relatively free communication with each other. And those I see as the overall principles of how to organize a business and get rich.”
