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The corporation strikes back.

Posted 04.22.10 by Adrian Ho

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Image via: mushon

I have no direct evidence for this, but I’ve been thinking recently that big companies appear to be coming back into favour after many years of having been dismissed as irrelevant.

  • For example, Walmart are now getting lots of recognition and publicity for being green. While it’s clear they’re making a real commitment to helping, it’s largely their scale that has everyone talking, not the intensity of their actions. As a percentage of business, green is far smaller at Walmart than it is at a company like Method that was founded upon green principles, however small actions go a long way at big companies and it’s hard for smaller players to compete.
  • In the airline industry, there’s lots of talk around the discussions between United and Continental and the potential for efficiencies that the World’s largest airline could reap. While Southwest and JetBlue were the darlings of Wall Street for years, the last couple of years have shown that even they aren’t immune to financial troubles.
  • And in the auto industry BMW, one of the lone independents, has suffered job losses and sales declines while Ford has seen dramatic growth in the US and Europe.

These appear to me to be a contradiction of the axiom that passion could trump scale, that size was no longer a determining factor in success in the Internet economy. Instead, I think our networked world has increased the amount of impact that a large company can have exponentially over the impact of a small company.

For example, in the marketing world, some of the new rules for brands and branding put companies with deep pockets and lots of assets at an advantage. Bigger companies can create a larger number of communities around themselves and they can give their communities more support. This is why I think we’re seeing that companies like Starbucks, Coca Cola and Best Buy are community marketing stars, even though they aren’t brands that ignite the same levels of passion as smaller companies.

Maybe it’s just me, but it also feels that a blanket of pragmatism that has descended upon all aspects of culture which are sharpening this trend. What do you think?

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  • http://twitter.com/adamronich Adam Ronich

    For me that distaste for major corporations wasn’t necessarily their size, but what they did with their size. Old-school management practice was to use size as an all trumping competitive advantage; lobbying government for their benefit, using massive legal teams to cripple competition, predatory pricing and encouraging over-consumption are just a few distasteful examples. Primarily focussed on themselves major corporations used their size to serve their own interests of getting bigger.

    That said, doing good benefits from scale. If corporations develop a keen sense of self-awareness and take on more sustainable practices to making a profit I could easily see “big” being ok.

    I think we also underestimate the emotional stability major corporation offer in times of recession. They offer a common bond for millions of people and security in their longevity. And let’s not forget that major corporations offer us a stable base for our lives. We don’t want a new and exciting personal experience with everything we interact with. Instead we develop a stable base of habit to with we adorn with the fun, personal and meaningful.

    Ford is an interesting example though. Taking the necessary steps to avoid a bailout while tremendously improving the styling and quality of their products has positioned the company as a symbol of America’s recovery. Ok, that might sound a little lofty and overblown, but I believe the sentiment to be true and the scale debatable.

    On to the finish….I’d offer up the belief – or maybe just personal hope – that it’s not pragmatism necessarily. I see the above examples as ones of innovation and caring (exception being the airlines). A move away from intangible rhetoric and towards meaningful action, and I’d like to think that’s why these corporations are being rewarded. Then again, I could be in an overly optimistic mood today.

    Bored in a coffee shop and grateful for the thought starter,
    Adam

  • http://zeusjones.com/blog adrianho

    Agreed! Forgot to make the point that (save for the airlines) this is being done by big companies acting more like small companies and putting purpose at least on an even footing with profits. I think this is very interesting because they are blunting the big advantage small companies have had. It will be equally interesting to watch how small companies respond.

  • http://twitter.com/adamronich Adam Ronich

    For me that distaste for major corporations wasn't necessarily their size, but what they did with their size. Old-school management practice was to use size as an all trumping competitive advantage; lobbying government for their benefit, using massive legal teams to cripple competition, predatory pricing and encouraging over-consumption are just a few distasteful examples. Primarily focussed on themselves major corporations used their size to serve their own interests of getting bigger.

    That said, doing good benefits from scale. If corporations develop a keen sense of self-awareness and take on more sustainable practices to making a profit I could easily see “big” being ok.

    I think we also underestimate the emotional stability major corporation offer in times of recession. They offer a common bond for millions of people and security in their longevity. And let's not forget that major corporations offer us a stable base for our lives. We don't want a new and exciting personal experience with everything we interact with. Instead we develop a stable base of habit to with we adorn with the fun, personal and meaningful.

    Ford is an interesting example though. Taking the necessary steps to avoid a bailout while tremendously improving the styling and quality of their products has positioned the company as a symbol of America's recovery. Ok, that might sound a little lofty and overblown, but I believe the sentiment to be true and the scale debatable.

    On to the finish….I'd offer up the belief – or maybe just personal hope – that it's not pragmatism necessarily. I see the above examples as ones of innovation and caring (exception being the airlines). A move away from intangible rhetoric and towards meaningful action, and I'd like to think that's why these corporations are being rewarded. Then again, I could be in an overly optimistic mood today.

    Bored in a coffee shop and grateful for the thought starter,
    Adam

  • http://zeusjones.com/blog adrianho

    Agreed! Forgot to make the point that (save for the airlines) this is being done by big companies acting more like small companies and putting purpose at least on an even footing with profits. I think this is very interesting because they are blunting the big advantage small companies have had. It will be equally interesting to watch how small companies respond.

  • http://twitter.com/adamronich Adam Ronich

    I love the agility small companies can have, and ultimately their ability to identify and exploit opportunities. And while the corporations are blunting their competitive advantage, smaller companies will always have the advantage of concentration. I’m using concentration here in terms of a solution – think laundry detergent regular and 3x.

    I was watching Gary Vaynerchuk say authenticity and caring doesn’t scale – and when it does it dilutes. So in the case of smaller companies where most of their employees and advocates are doing good, that concentration will beat scale especially if it gets focussed and localized.

    But here is also the really cool part for small companies. You can’t really change beliefs or action without changing the context in which we make decisions. This is precisely what the large companies are doing now, changing the paradigm to the benefit of smaller companies. Because the smaller more committed companies will always have the advantage of agility, action and concentration. This is the Starbucks getting us to go to coffee shops story.

    Full Disclosure: I’m an experience junkie and love smaller businesses, so I’m biased.

    Oh and thanks for engaging Adrian :)

  • http://twitter.com/adamronich Adam Ronich

    I love the agility small companies can have, and ultimately their ability to identify and exploit opportunities. And while the corporations are blunting their competitive advantage, smaller companies will always have the advantage of concentration. I'm using concentration here in terms of a solution – think laundry detergent regular and 3x.

    I was watching Gary Vaynerchuk say authenticity and caring doesn't scale – and when it does it dilutes. So in the case of smaller companies where most of their employees and advocates are doing good, that concentration will beat scale especially if it gets focussed and localized.

    But here is also the really cool part for small companies. You can't really change beliefs or action without changing the context in which we make decisions. This is precisely what the large companies are doing now, changing the paradigm to the benefit of smaller companies. Because the smaller more committed companies will always have the advantage of agility, action and concentration. This is the Starbucks getting us to go to coffee shops story.

    Full Disclosure: I'm an experience junkie and love smaller businesses, so I'm biased.

  • http://www.ubervu.com/conversations/www.zeusjones.com/blog/2010/2085/ uberVU – social comments

    Social comments and analytics for this post…

    This post was mentioned on Twitter by adrianho: the corporation strikes back (post) http://bit.ly/8Ysh0Y (feel free to use the nifty new fb like button)…

  • Anonymous

    What’s interesting about Walmart is that they are communicating their sustainability agenda largely to Wall Street and social critics. When they talk to their customers, they talk about ‘rollbacks’ and cost-savings. This movement is neither led by nor marketed to their actual customer, but to the people who might otherwise consider Walmart yesterday’s (evil) big box concept.

    I think there is a growing need for ‘editor brands’ in our culture now that there are so many ‘specialist brands.’ Walmart at its best could become a Whole Foods for the people across multiple categories. The pressure they are exerting on all of their suppliers is forcing the suppliers to change in order to remain in good stead. So they are using their scale to bully change at a (theoretically) unprecedented scale, something Method could never do.

    But the criteria of what makes something ‘good’ (design, social, health, energy use) is still being defined and led by the specialist or ‘passion’ sector. Big brands are more in the position to enforce and execute.

  • http://zeusjones.com/blog adrianho

    Good point(s), agree that the agenda is still being set by smaller companies who are embedding cause more centrally into their businesses, however I think that’s going to change too. A great example for me is GreenXchange (http://greenxchange.force.com/) which is definitely about big business establishing the green agenda at a very fundamental level. I don’t think the thought-leadership that small companies have enjoyed can last when big companies have decided it’s strategic for them to compete. I’m not sure I’m happy about it.

  • http://zeusjones.com/blog adrianho

    No, thank you for engaging Adam! I am an idealist too and love sentiments like Vaynerchuk’s but I think that, forced to chose between impact on the side of the big companies and authenticity on the part of small companies, the majority will vote for impact most of the time.

    I am also biased towards wanting the underdog to win – we are an underdog! but I am also pragmatic. I think small companies need to find a new game to play because big companies are learning the rules very quickly.

  • http://twitter.com/theothertexan Ashley Alsup

    What's interesting about Walmart is that they are communicating their sustainability agenda largely to Wall Street and social critics. When they talk to their customers, they talk about 'rollbacks' and cost-savings. This movement is neither led by nor marketed to their actual customer, but to the people who might otherwise consider Walmart yesterday's (evil) big box concept.

    I think there is a growing need for 'editor brands' in our culture now that there are so many 'specialist brands.' Walmart at its best could become a Whole Foods for the people across multiple categories. The pressure they are exerting on all of their suppliers is forcing the suppliers to change in order to remain in good stead. So they are using their scale to bully change at a (theoretically) unprecedented scale, something Method could never do.

    But the criteria of what makes something 'good' (design, social, health, energy use) is still being defined and led by the specialist or 'passion' sector. Big brands are more in the position to enforce and execute.

  • http://zeusjones.com/blog adrianho

    Good point(s), agree that the agenda is still being set by smaller companies who are embedding cause more centrally into their businesses, however I think that's going to change too. A great example for me is GreenXchange (http://greenxchange.force.com/) which is definitely about big business establishing the green agenda at a very fundamental level. I don't think the thought-leadership that small companies have enjoyed can last when big companies have decided it's strategic for them to compete. I'm not sure I'm happy about it.

  • http://zeusjones.com/blog adrianho

    No, thank you for engaging Adam! I am an idealist too and love sentiments like Vaynerchuk's but I think that, forced to chose between impact on the side of the big companies and authenticity on the part of small companies, the majority will vote for impact most of the time.

    I am also biased towards wanting the underdog to win – we are an underdog! but I am also pragmatic. I think small companies need to find a new game to play because big companies are learning the rules very quickly.

  • Anonymous

    Yes, the only good thing is that everyone will be much more skeptical when big companies claim to be ‘green,’ with even Haynes underwear launching a new line of eco pants.

    On a side note, do you not think that ‘green’ is one of the worst marketing words ever invented? Will be interesting to see the language that big companies have to use when consumers beg never to hear the word again.

    Here is a link to a McDonald’s Germany logo that is so bad, I thought it had to be a joke. http://popsop.com/30345

  • theothertexan

    Yes, the only good thing is that everyone will be much more skeptical when big companies claim to be 'green,' with even Haynes underwear launching a new line of eco pants.

    On a side note, do you not think that 'green' is one of the worst marketing words ever invented? Will be interesting to see the language that big companies have to use when consumers beg never to hear the word again.

    Here is a link to a McDonald's Germany logo that is so bad, I thought it had to be a joke. http://popsop.com/30345

  • http://givenlondon.com/blog/ David Hawksworth

    I can’t add any solid evidence but can add an opinion on why this might be happening. Generally companies are pretty risk averse. Being disliked and derided, as well as being placed under more scrutiny with many more ways of being ‘found out,’ is a big risk. There has been such a full public adoption of the idea of the big bad company, that we are now seeing their response. In the sustainability space the most forward thinking companies tend to be the giants – you mentioned Walmart, but I would add P&G, Mcdonalds, Unilever and Coke to that list. When the big brands come under fire they are best placed to respond. I think we are starting to see that now.

  • http://zeusjones.com/blog adrianho

    I agree, it’s another data point to what Ashley says below that the agenda is: “still being defined and led by the specialist or ‘passion’ sector.” This is a reversal of influence that I think is also interesting and could be another post!

  • http://www.zeusjones.com/blog/2010/setting-the-agenda/ Setting the agenda. | From The Head Of Zeus Jones

    [...] was inspired by one of Ashley’s comments in my last post. She [...]

  • DavidJHawksworth

    I can't add any solid evidence but can add an opinion on why this might be happening. Generally companies are pretty risk averse. Being disliked and derided, as well as being placed under more scrutiny with many more ways of being 'found out,' is a big risk. There has been such a full public adoption of the idea of the big bad company, that we are now seeing their response. In the sustainability space the most forward thinking companies tend to be the giants – you mentioned Walmart, but I would add P&G, Mcdonalds, Unilever and Coke to that list. When the big brands come under fire they are best placed to respond. I think we are starting to see that now.

  • http://zeusjones.com/blog adrianho

    I agree, it's another data point to what Ashley says below that the agenda is: “still being defined and led by the specialist or 'passion' sector.” This is a reversal of influence that I think is also interesting and could be another post!

  • http://www.zeusjones.com/blog/2010/modern-brands-2-0-revenge-of-the-corporation/ Modern brands 2.0: revenge of the corporation. | From The Head Of Zeus Jones

    [...] mentioned a while back that I thought big corporations were starting to adopt Modern Brand strategies with a twist. Since then, we’ve found some more examples of innovation from big companies [...]

  • http://whatconsumesme.com/2010/shared-posts/modern-brands-2-0-revenge-of-the-corporation/ Modern brands 2.0: revenge of the corporation. / what consumes me, bud caddell

    [...] mentioned a while back that I thought big corporations were starting to adopt Modern Brand strategies with a twist. Since then, we’ve found some more examples of innovation from big companies that [...]

  • http://platformblog.co.cc/2012/01/10/ashley-alsup/ Ashley alsup | Platformblog

    [...] The corporation strikes back. | Zeus Jones [...]

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