They have too much to lose if they take risks
Limited liability is a much bigger benefit for a small company than a large one. If you look at an bet to either make 100 million or lose 100 million on a coin flip, but your company is only worth 20 million, the corporate structure transforms that into a +40 million expected value. If your company is worth 20 billion, that bet is worth zero.
There's a lot of debate right now about how quickly big corps will adopt AI tech. The AI influencers/SV set seem to think that AI's takeover of tradcorp America is imminent, while the realists think that big tradcorps move much more slowly. On balance I suspect that the realists are correct. Your points in this post reinforce my view.
To add some nuance to this story: the difficulty of launching a new thing at a big firm will typically depend on
(a) how interdependent the big firm's projects are in general
(b) how close this particular new thing is to the big firm's cash cow(s)
since those will affect the potential blast radius of a bad launch. Teams that are doing things on the fringes rather than in the cash-cow business lines often have much more nimbleness, as do firms that take more care to have their product lines stay independent (which has its own set of downsides).
I used to be one of the people whose approval you had to get to make a change to Google search results pages: my remit was to make sure that the appropriate measures had been taken to make sure the change would not cause the pages to load any slower, not even a few milliseconds, unless senior management had explicitly approved the tradeoff of slowness for featurefulness. I was part of a committee of ten or so such approvers, and we each tried our best to make it as easy as possible to get our approval by providing automated checking tools, carveouts for "known trivial" classes of changes and the like. Nonetheless we knew the cumulative effect of the barriers we put up was very painful indeed. But it was otherwise too easy to inadvertently cost the company huge amounts of money with a bad search change-- in my case, we knew that even slightly slower search results page loads led to fewer ad clicks.
Sluggishness tends to devolve into dispersal of resources across departments. (Everyone gets to wet one's beak.) There are many squeaky wheels in a large org.
Reading this makes me think that Berkshire Hathaway can't exist.
Ever hear of to big to fail. IMHO the biggies are sluggish because of the onion layers of management.
This is such an important (critical) concept for anyone involved in organized production. Not just inside profit-seeking, capitalist ventures but also (maybe especially) within non-profit ventures. Perhaps like Kling, of the most difficult aspects of being creative, part of what we think of as “innovation” firms (looking at you MSFT), is a lurking, deep sense of gaslighting followed by despair, confusion, and if you are humble, intelligent, self-aware - a deep sense of feeling plain ignorant while other people see things you just don’t see.
This is a hopeful essay not just for those of us feeling stupid inside big firms pushing buttons on command, but any of us on the national scale (looking at you USA), the steady plodders who similarly recognize now why we continue to feel that we may never be the organization we might otherwise be. Thank you.