Pick Entrepreneurial Managements Rather Than Caretakers

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Giant size may create seeming power and influence, but size in corporations can also produce lack of imagination from older, more conservative "caretaker managements" less willing to innovate, take risks, and keep up with the times.

In most cases, top management of large companies does not own a meaningful portion of the company's common stock. This is a serious defect large companies should attempt to correct.

Also, too many layers of management separate the senior executive from what's really going on out in the field at the customer level. And in the real world, the ultimate boss in a company is the customer.

Times are changing at a quickening pace. A corporation with a fastselling, hot new product today will find sales slipping within three yearsif it doesn't continue to have important new products coming to market.

Most of today's inventions and exciting new products and services are created by hungry, innovative, small- and medium-sized young companies with entrepreneurial-type management. As a result, these organizations grow much faster and create most of the new jobs for all Americans. This is where the great future growth of America lies. Many
of these companies will be in the services or technology industries.

If a mammoth-sized company occasionally creates an important new product, it still may not materially help the company's stock because the new product will probably only account for a small percentage of the gigantic company's sales and earnings. The product is simply a little drop in a bucket that's just too big.