"You need a very product-oriented culture. Apple had a monopoly on the graphical user interface for almost 10 years. How are monopolies lost? Some very good product people invent some very good products, and the company achieves a monopoly. [But] what’s the point of focusing on making the product even better when the only company you can take business from is yourself? So a different group of people starts to move up. And who usually ends up running the show? The sales guy. Then one day the monopoly expires, for whatever reason…but by then, the best product people have left or they are no longer listened to."
– Steve Jobs
Things which I believe drive this dynamic in organizations:
1) As Clay Christensen has noted, succcessful organizations drive for ever-increasing margins over time. This dynamic forces changes in the organization’s internal mission and raises the profile and validity of sales and financial people.
2) People who do the creative work of product development are different from the people who do the routine (but very important) work of managing call centers, tracking accounts receivable, talking to shareholders, and keeping the lights on. Thing is, routine people are more likely to get satisfaction from being managers, rather than from focusing on content, which is what creative people like to do. So the routine people rise in the organization, mismanage the creative people, and nothing gets good gets created — witness Apple without Jobs.
3) Tibor Kalman once said "success = boredom". If a product line is becoming mature, and if the company is unwilling or unable to roll out new lines of products, the good product people will leave in search of more interesting challenges. Who wants to be the guy trying to take another $0.01 of cost out of an already optimized mechanism?
4) Product success drives financial success, which leads to going public, which leads to short-term financial pressures and the generation of a gigantic bureaucratic hairball. That hairball tangles the creative product people and binds them, limits them. As the rather creative fellow Richard Branson says, "If it’s a private company, you can get away with more. If it’s my money, then if I lose my money, no one else has been hurt by it."