Thursday, September 13, 2012

The Real Company syndrome

Ten years ago, I went on the Canon Corporate Executive development program at INSEAD and other institutions.

I remember it well because on the first day, in the first meeting we examined the question of the impact of the internet and what Canon's involvement should be - which was the overall theme of the course.

In a group of executives, there was a massive majority opinion which was very strongly voiced that it was just a channel and Canon shouldn't get directly involved. Then there was me, a single voice (ok, I was CEO of a subsidiary) up against this solid wall of opinion of SVPs, VPs from all over the globe.

Fortunately I've never been shy of a fight. Opinions changed by the end of the six month course but that first meeting always stuck in my mind because of one phrase.

The phrase I heard at that meeting was how this or that company wasn't a "real" company. In that meeting it was how Amazon wasn't a real company unlike Kodak.

Today of course, no-one would dream of saying that Amazon wasn't a real company but I keep on hearing that phrase. In the cloud space it was "but are there any examples of 'real' companies using cloud' etc.

I'd say how about Netflix and the response would be "no, 'real' companies not these tech companies'. Ensue argument over what defines a company, how all media companies are tech companies etc etc.

Where does this awful term 'real' company come from? Is it simply an artefact of inertia and a mechanism for manifesting denial over change?


Anonymous said...

A "real" company it seems, is any company that has survived for long enough to have its founding assumptions/ways of doing things challenged. Frequently, they have also built up enough internal momentum to be resist responding to such challenges until the absolutely last point possible (or maybe even beyond that point, as a result of which they die).

But the distinction is not entirely stupid – it is a lot easier to build something from scratch than to reconfigure something existing, and unlike building from scratch, reconfiguration tends to have losers.

Larry Werner said...

I believe the term "real company" may have been associated by traditional businesspeople as those that have an actual physical office. These days, people can be at home and manage a number of employees virtually at the other end of the world. Back home, many have form an llc and later on converted to california corporation but still manage virtual employees.