Why Were GAFA Able to Grow So Rapidly? —What Drucker Didn't See—

— When an organization becomes too complex, it becomes unmanageable —

This is one of my favorite quotes from Drucker.

However, there is one thing that has been bothering me.

If Drucker's theory were correct, giant companies like GAFA shouldn't exist. Yet, in reality, there are companies that employ hundreds of thousands of people around the world and have continued to grow at a furious pace.

Why was such a thing possible?

…It was while I was thinking about this that I came across "Music and Life," a collection of dialogues between Ryuichi Sakamoto and Shinichi Fukuoka.

This book is about music, and it is also about biology.

However, I read this book in the context of organizational theory.

In this book, Shinichi Fukuoka uses the terms "Logos" and "Physis".

Logos refers to the concepts and laws that humans have carved out to understand the world. On the other hand, Physis refers to the flow and movement that life itself possesses, pointing to nature itself.

Humans find constellations in the night sky.

Even though the night sky is just scattered with countless stars, humans connect them with lines and give them meanings like "Orion" or the "Big Dipper." That activity is Logos.

While that is an essential activity for understanding the world, the moment one mistakes what has been turned into Logos for reality itself, one drifts away from Physis, which is nature in its original state.

Companies also have Logos.

Governance, ISO, KPIs, organizational charts, evaluation systems, manuals… these are all necessary mechanisms for understanding and operating a company, but they are not the "company itself."

A real company is driven by living activities such as relationships between people, casual conversations, trust, the atmosphere, and on-site judgment. In other words, companies also have Physis.

In this book, Shinichi Fukuoka states that "life is a dynamic equilibrium that continues to resist the increase of entropy." In other words, life is not a collection of fixed parts like a machine, but rather it maintains the overall balance and stays alive by intentionally breaking itself down and continuously reconstructing new molecules.

Life is maintained while being broken…Cells are constantly being replaced, discarding old things and creating new ones. The moment that equilibrium is overwhelmed by entropy, life ends.

Now, let's apply this idea to companies.There is something decisively different between the era when Drucker addressed the complexity of organizations and the modern day. Could it not be the speed of entropy increase, which has been accelerated by technology?

Technology has accelerated the growth speed of companies.When a company grows rapidly, the number of people increases.When the number of people increases, the amount of information also increases.When the amount of information increases, decision-making becomes more complex.And the economic activity of the entire company grows, and the markets the company is involved in expand rapidly. And as a reaction to that, things that are weeded out and things that are destroyed are born.Yes, modern society has seen the speed of entropy increase accelerate due to the acceleration of technology. And ironically, in order to suppress that entropy, companies have come to need even more Logos.That is probably why the larger the company, the more it emphasizes governance, standardization, processes, and data.However, it is dangerous to apply this way of thinking to small and medium-sized enterprises as it is.This is because small and medium-sized enterprises do not have as much entropy as giant companies. In a company with about 10 employees, the president can see the front lines every day and can also talk to subordinates. They can also feel the nuances of the atmosphere. Yes, Physis is still sufficiently alive there.If you bring the same amount of Logos as a large company into that company, you will end up unable to move. You will end up killing the Physis that is trying to breathe.

What is needed is not to imitate the systems of large corporations.
What is important is to possess a logos that is commensurate with the magnitude of one's own entropy. There are many things that should be measured, but if you misjudge the premise—'how much entropy does our company hold'—you will also misjudge the amount of logos required.

Shinichi Fukuoka states the following in this book:
'The fact that individual life is finite is the motivation for all cultural, artistic, or academic activities. It is precisely because it is finite that life shines.'

I would also like to add the word 'management' to that.