The problem wasn’t the engineering culture,” Mr. Jha recalled telling people. “We weren’t connecting the engineers to the market and giving them problems to work on that matter.

From the NYTimes blog, an article about how Sanjay Jha changed Motorola’s culture to great effect.

Most great companies eventually lose their touch with their customers because of the increase of layers between those building products and managing customers. Understanding the customer base becomes a giant game of telephone.

This is one of the most important advantages of startups: having intimate contact with customers, understanding their needs and building a product to suit. As a company grows, it’s a challenge to keep the right feedback loops in place.

Geoffrey Moore’s book, Dealing with Darwin, does a great job of explaining how other companies have built these processes.