Culture, the last advantage of the company?
A bunch of people are questioning the idea of the company as it exists today. It’s not surprising given that companies are now appearing to have failed us massively. In addition, the main advantage of companies – the ability to efficiently coordinate groups of appropriately skilled people in solving a problem – has been effectively negated by the scale and infrastructure provided by the internet. In fact, when you create a list of core attributes of companies, you quickly realise that they are almost all matched (and in some cases beaten) by the potential of self-organised groups.
They are matched in all respects except one. I think the last remaining advantage that companies have over groups of self-organised people is culture.
While it’s definitely true that self-organised groups can have a distinct culture (think WOW), I’d argue that these cultures don’t actually have the qualities that create success for the group. Typically, they are guidelines for fitting in rather than also being conditions for inspiring and cultivating innovation. The truly successful corporate cultures create a clear sense of belonging and they also create a climate where assumptions can be challenged, where individuals can grow, and where people have the freedom to fail so that real innovation can still happen.
These latter qualities aren’t typically cultivated by self-organised groups because they are far more important in creating long-term individual job satisfaction than they are in efficiently pursuing a goal or completing a task. In fact, promoting individual advancement strikes directly at the heart of the egalitarian ethic that drives a lot of collaborative efforts. Additionally, self-organised groups must stress the points of similarity between members, celebrating their differences would result in chaos.
For this reason, I think it’s no accident that the most innovative companies in the world are now held together not by a central market positioning, but instead by an internal core purpose and an incredibly strong sense of internal culture. Indeed, the stronger, more distinct the culture is, the less likely it is that a self-organised group can duplicate it.
I think this has fairly dramatic implications upon branding and brand definition. In the past, brands were built around an external promise to customers. This fact placed customer knowledge and insight at the forefront of the skills required to develop brands. However, it’s entirely possible to create an internal purpose and culture with absolutely no customer knowledge and insight. Knowing what customers think and want is far less relevant to creating culture than understanding what will motivate and inspire employees to deliver at the highest possible level. They are related skills, but they aren’t exactly the same. In fact, I’d argue that the skills that rise to the fore of creating modern brands are internal operations-focused skills (like HR) rather than external marketing-focused skills.
Finally, this is yet another assault on the traditional agency role as “steward of the brand.” I think the evidence is mounting that drastic rethinking of both the role and skills required to be a marketing partner are required. I’m not sure that any of us (including ZJ) have truly embraced the full implications of the changes that are happening.
lee maicon Says:
March 5th, 2009 at 7:11 pmadrian,
selfishly this is great timing. @ the new agency we’ve been thinking about how to articulate what we stand for. a few years ago the question would be ‘how are we positioned?’
we’ve come to the conclusion that our positioning is far less important than our philosophy and culture.
the reality upon which that positioning is based may shift and leave us behind. a shared philosophy and culture will be far more helpful to help us grow, innovate and challenge the conventions of agencyland (especially hispanic market agencyland)
i agree re: your implication that this will impact the role and skills required to be an agency/marketing partner. All we can do is think through what it means to operate from a philosophy that creates behavior as opposed to having a set ‘positioning’ that limits and defines behavior.
An analogy: “Spanish” identity in Spain (or the French, or the Germans may be a better analogy) has always been defined by a set geography and shared history and cultural cues. Over the last 20 years as the EU has grown and immigrants from Latin America, Africa and even God forbid the UK have flooded Spain, it’s put pressure on what that identity means. Their “Spanish” positioning has had some difficulty adapting.
Now not that we’re perfect by any stretch, but over time the “American/US” identity has always been as much a philosophy as a positioning. My father growing up in Mexico was always really an American, because he bought into a certain set of values: meritocracy, tolerance, progress, etc. (You could argue that the Brits were good at exporting Britishness to the upper classes throughout Empire. cf., Naipaul VS)
Might not be the tightest analogy, but I think it’s instructive.
But now I’ve taken over your blog, haven’t I? Bad form…
Edward Cotton Says:
March 5th, 2009 at 7:18 pmI think there’s something very interesting here about the evolving role of internal culture. I feel strong internal cultures have always defined strong brands, but i feel that might have to change with a new generation of workers.
I think of places like Cisco, Google and Nokia who have injected lots of flexibility and empowerment into their organizations by loosening their corporate cultures.
Other companies have had issues because of their overbearing culture- Microsoft being an obvious example.
The new model of C21st corporate culture will be one that allows internal and external collectives to thrive. They will certainly need energy, passion and drive to fire up employees, but they can’t do it in such an over-bearing way.
In addition, when the boundaries between fulltime, part time, project worker and prosumer, blur, that flexibility and something akin to a collective mindset will be demanded.
Adrian Ho Says:
March 5th, 2009 at 7:50 pmYou’ve brought an interesting dimension to this Ed. I agree that the boundaries of “the company” are losing definition, and in fact I think the company that first figures out how to combine the cohesiveness of a tightly defined internal culture with the ability to mobilise groups of people on the outside will make a killing in whatever field they’re in. I wonder though if that will be achieved by loosening internal culture or by simply choosing to expose only certain parts of it externally. It’s a pretty interesting question though and I don’t believe anyone’s solved it yet.
To your point about strong cultures stifling creativity, I think about a company like Zappos that has a well publicised induction ritual of offering new employees money to leave. From the outside that culture appears to be stronger and more comprehensive than even Microsoft’s yet it clearly has created an innovative company.
dominique Says:
March 5th, 2009 at 11:25 pmVery interesting article.
- On the coordination: I don’t know how you build a strategy using self organized group. It seems to me as these organizations are better for “response” type of action and “counter power”.
Opensource has shown some interesting things with this regards but I’m not sure we’re at a point where a self organised group could come up with let’s say the new iPod.
I also think that so far, self organized group has not shown much ability to deal with money, IP and power to name a few…. but banks have not been very good at this either.
Adrian Ho Says:
March 6th, 2009 at 4:08 pmHi Dominique,
Group strategy probably leads to a bad place but I think that most self-organised groups have taken their lead from a few key people – e.g. in Linux 1 – so all it takes is one individual with a great idea that he or she wants to give away and then you’re off.
In terms of money, IP and that sort of stuff, those probably go counter to the spirit of most self-formed groups. Money isn’t a motivator for participation, recognition is. Self-formed groups would almost certainly do work under some type of open licence which specifically prevents the commercialisation of the work.
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