During my time in industry, I learned that every company has two cohorts of employees: the transients and the lifers. The transients would change company every couple of years whereas the lifers were on track to spend their entire professional life at one company. These lifers may have tried some other companies early in their careers but had found something that made the company and themselves click, or they lacked the initiative to keep looking. Both groups, however, often referred to “the company” as a unique, identifiable entity.
We see the same in brand marketing where commercials seek to create an image in people’s minds of a company with a set of norms and values as well as a culture that’s positive, principled and standing for something. When reflecting on this, it’s surprising how effective this is. Think of the last time you thought of buying something. Whether it’s running shoes, a car, a new kitchen or even something as simple as underwear. I bet you thought about the brand, what it communicated to the community around you and your perception of the quality of the product.
Most products, however, have very comparable quality and there’s little difference in brand and off-brand products. In groceries, this is particularly prevalent. Most food factories produce the same stuff continuously and simply put different packaging around it based on the price point that the product should sell at. And don’t even get me started on advertising for dog and cat food!
The notion of a company is an illusion. It may exist from a legal perspective, but in practice, a company is a, potentially large, group of people with their own agendas, priorities, beliefs and ambitions. Large organizations tend to be conglomerates of smaller communities that compete with each other, where outside parties are involved in ways that can go quite deep and where ownership relationships of legal entities can be extremely complex and messy.
There are multiple reasons why considering a company as a single entity can easily lead to problems, but here I’ll discuss three primary traps that I’ve experienced and seen people fall into. First, there’s the assumption that your colleagues in the company have the same goal. As companies typically have a defined strategy, it’s easy to assume that everyone has the same understanding of what that strategy means and they’ll do their utmost to realize it. In practice, a strategy can typically be interpreted and implemented in a variety of ways, which can lead to conflicts in the organization as different groups disagree on the realization.
In addition, even though there may be a company strategy, different factions in the company may well disagree with it and decide to coast (not do anything to realize it) or even actively resist it. Often there will be verbal support of the proclaimed strategy, but no action. As humans are storytelling machines, there typically are convincing stories about why the team isn’t acting on the strategy right now.
Second, for people outside the company, it’s easy to treat every representative of the company as speaking with one voice. In practice, of course, every individual and function in the company has their own drivers and priorities. Startups often fall into this trap and suffer from many false positives from large companies that never go anywhere. They assume that the word of one individual is a clear indication of intent and they fail to take socially desirable behavior into account or do not notice that the person in question has no decision-making authority. Experienced folks in sales, typically working at larger companies, often first decide who the decision-makers are and then ‘work the reporting chain’ to get to a positive outcome.
Third, especially in global companies, there tends to exist quite strong competition between sites in different locations and countries. In my experience, the headquarters does what it can to maintain control of the company. However, HQ is also furthest from the markets where the revenue is generated and many sites tend to exploit information asymmetry as a mechanism to limit the ability of HQ and other sites to influence local affairs. Of course, the standard story is that kingdoms get formed unless you remove the dust from the organization through regular reorganizations, but the informal power networks tend to be quite strong.
In some of my consulting engagements, I was asked by HQ to visit local sites and perform assessments of various kinds. Every time this happened, I ran into significant resistance and power plays where locals were looking to either stonewall me or to use my presence as a way to jockey for position in the local site or toward HQ.
For all the talk about “the company,” the fact is that companies consist of groups of individuals and factions that aren’t (fully) aligned and all have their own drivers, priorities and ambitions. Assuming that every individual is a mouthpiece of the official company strategy and failing to understand the politics and undercurrents in an organization can easily lead to poor or subpar outcomes. The saying goes that company culture is the backbone of any successful organization, but beware that the proclaimed culture, norms, values and strategy often only have a passing relationship with reality.