Clem Sunter

The quick and the dead

2010-07-21 13:05

Remember Lee, the aging gunslinger played by Robert Vaughn in the movie The Magnificent Seven. Three flies were sitting on the table. He sweeps his hand across it, opens his hand and it’s empty. He says: “There was a time when I would have caught all three.”

Just as age reduces the speed of a gunslinger in clearing his holster, size and success do the same to companies. And it’s “high noon” in both arenas. You are trying to kill the opposition and they are trying to kill you. In the one instance, it is with a Colt 45 and in the other with innovation and deals that give you the edge.

The marvellous Standard Bank slogan “Simpler, Better, Faster” becomes more difficult to achieve once you have entered the public domain. Consider a medium-sized family-owned business versus a large, listed company. In the former case, the family head normally has a few trusted advisers. Together, they can decide on strategy, tactics, projects and buying out competitors in a series of conversations in corridors, over lunch, on cellphones. The level of formal analysis is what they decide it should be. Obviously, they have to abide by the laws of the land and produce properly audited accounts like everyone else; but the process by which they make decisions is flexible and open-ended.

By contrast, a publicly listed company is expected to comply in all respects with the rules of corporate governance. If not handled properly, this can descend into stifling bureaucracy. All major decisions are examined in minute detail by corporate finance departments, referred to investment sub-committees of the board and then debated comprehensively at board level. More often than not, the submission is kicked back to corporate finance for additional financial runs and then yo-yos up and down the hierarchy as every member ensures that he or she is absolutely covered.

Instead of ready, aim, fire, the outcome of the process is ready aim, aim, aim... Meanwhile, the opposition takes aim and fires leaving you dead in the water. The consequence of this rigid obsession to detail can be downsizing and loss of jobs, the very opposite of what architects of corporate governance codes had in mind when drafting them.

Companies can be large and foxy at the same time, but it demands a special corporate culture which cascades down from the very top. Apple has just overtaken Microsoft to become the largest player in the computer game and it is for one distinct reason: Steve Jobs is still a committed player in the game and gives plenty of space to his cohorts to come up with revolutionary new ideas on product line and design. Apple manages to maintain that slightly zany quality which turns on millions of devoted fans.

But now the company faces its sternest test yet in the way that it handles the problems associated with its latest product offering – the iPhone 4. To say that reception difficulties are due to customers holding the phone wrongly demonstrates a level of arrogance which can prove lethal. Customers are never wrong. It is an iron-clad rule of the game beyond the control of even the most outstanding player in it. A permanent solution has to be found as quickly as it takes to catch Lee's three flies – or else the rival facing you a few yards away will put a bullet through your corporate heart. Arrogance turns foxes into hedgehogs and, as we all know, hedgehogs have slower reactions.

So ask yourself: is your company quick on the draw in grabbing opportunities and countering threats? Or is it riding into the sunset where the epitaph on the tombstone will be that it was a good corporate citizen which met an untimely death?

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