Do Companies Really Need Headquarters?

fancy-building-Geoffrey-JamesMany start ups are, of course, launched out of home offices or proverbial garages. However, there’s usually an assumption that, if your start-up is successful, you’ll need to rent office space to continue to grow the business.

However, one of the cool things about our wired-up business world is that almost every function that a small company needs can be handled remotely or contracted out. Since that’s so, why spend money on corporate headquarters?

Take, for example, Fractured Prune Doughnuts, a quick-service doughnut franchise that’s rapidly grown from 1 to 25 outlets. Despite what you’d naturally assume given a company of that size, CEO Dan Brinton has only two corporate employees on his payroll.

Rather than paying for posh headquarters and flying potential franchisees to headquarters for meetings, Brinton brings his “corporate headquarters” (essentially him and his laptop) to wherever it’s needed.

In 2014, Brinton spent 223 days on the road meeting with franchisees to launch new stores. This has allowed him to spend as much time as possible assisting franchisees with their openings, while avoiding the hassle and expense of managing a physical office.

In addition, because Brinton needn’t worry about relocation costs, he can contract work to the most experienced professionals (production, marketing, PR, etc.) regardless of where those professionals prefer to live.

This allows Brinton to focus on franchisee success and his vision for the company, rather than office management and politics. It also ensures that the growth of his company “is organic and not merely growth for its own sake.”

Brinton makes an important point here, because once established, corporate headquarters have a tendency to take on a life of their own.

I’ve worked with many companies whose palatial headquarters are full of figureheads and bureaucrats whose primary job is proving their own importance by vetoing good ideas and road-blocking productive work.

Although much of the business world still considers fancy headquarters to be a sign of success, a big corporate headquarters only represents “growth” in the sense that a tumor represents growth.

In most companies, the disappearance of corporate headquarters would be a net gain in productivity because the real work (design, manufacturing, sales, support, etc.) takes place elsewhere.

As The Tao of Programming puts it:

In the east there is a shark which is larger than all other fish. It changes into a bird whose wings are like clouds filling the sky.

When this bird moves across the land, it brings a message from Corporate Headquarters. This message it drops into the midst of the programmers, like a seagull making its mark upon the beach. Then the bird mounts on the wind and, with the blue sky at its back, returns home.

The novice programmer stares in wonder at the bird, for he understands it not. The average programmer dreads the coming of the bird, for he fears its message.

The master programmer continues to work, for he does not know that the bird has come and gone. 

That was written before the Internet age. If corporate headquarters were useless parasites back then (which they were), how can they possibly be useful or desirable today?

 Originally published on Inc.



Geoffrey James

Geoffrey James

Geoffrey James, writes a daily column for Inc.com and is the author of the newly-published book Business Without the Bullsh*t: 49 Secrets and Shortcuts You Need to Know.

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