Cribbed this from a Hacker News comment and wanted to preserve it here. A powerful idea when we can remember it.
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Warren Buffett’s 1989 letter to shareholders
http://www.berkshirehathaway.com/letters/1989.html
My most surprising discovery: the overwhelming importance in business of an unseen force that we might call ‘the institutional imperative.’ […] I thought that decent, intelligent, and experienced managers would automatically make rational business decisions. But I learned over time that isn’t so. Instead, rationality frequently wilts when the institutional imperative comes into play.
For example: (1) As if governed by Newton’s First Law of Motion, an institution will resist any change in its current direction; (2) Just as work expands to fill available time, corporate projects or acquisitions will materialize to soak up available funds; (3) Any business craving of the leader, however foolish, will be quickly supported by detailed rate-of-return and strategic studies prepared by his troops; and (4) The behavior of peer companies, whether they are expanding, acquiring, setting executive compensation or whatever, will be mindlessly imitated.
[…] After making some expensive mistakes because I ignored the power of the imperative, I have tried to organize and manage Berkshire in ways that minimize its influence. Furthermore, Charlie and I have attempted to concentrate our investments in companies that appear alert to the problem.
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As Clay Shirky puts it, “institutions will try to preserve the problem to which they are the solution”.