Big Companies – They Change a Lot

    June 25, 2007

After speaking in Chicago on Friday, I spent a delightful couple of hours waiting out flight delays. (Yeah, I don’t think I’ve written that sentence before, either.) I was hanging out with fellow speaker Chris Silver Smith, with whom I swapped life stories. When I mention that I’ve worked for IBM for over 28 years, Chris said something insightful—"Wow, that’s a lot of change."

And it has been a lot of change.

Most people don’t react that way. Most folks say something like, "I could never work for one company for that long." But Chris worked for Verizon for ten years and knows that when a company is big enough, you can change jobs within the company every couple of years—it’s not really like working for a small company for many years.

And Chris was right about the amount of change. The IBM I joined years ago was a very paternalistic (maternalistic?) culture, where excellence occurred but was not really rewarded. IBM famously promised lifetime employment—no layoffs—rarely firing anyone even for incompetence. When it came time to give out annual raises, I used to joke that they’d rather give ten people a dime than one person a dollar.

IBM’s near-death experience in the early ’90s caused it to modernize its approach to emphasize value to the customer rather than value to its own employees, a wrenching but needed culture change. The IBM I work for now is a better fit for me, because it puts up with my idiosyncrasies in return for the value that I bring. The old IBM rewarded conformity to an extent that left me feeling unrewarded.

Looking ahead, I see that big companies will increasingly be buffeted by external events and will need to be as adaptable as IBM has been during my tenure. Time was that big companies were so big and powerful that they could ignore market forces and technological change for a period of time before it became a crisis. I believe that the window of time for being out of touch is closing—external forces catch up with you faster and faster these days.

The cool thing about economics is that when your company gets so big that it forgets how to do anything, economic forces start shrinking the company until it is forced to remember again. The new forces that democratize marketing—all that cool Web 2.0 stuff such as blogs and podcasts and product ratings and the like—make it harder to stay out of touch for any length of time. Your customers will bring you back into line quickly, no matter how much your company might like to ignore them.

Small companies have always been this way, but I think Web 2.0 is forcing a small company mindset on even the largest firms. If you work for a big company, are you listening to your customers? Are you reading the message boards? Do you watch where they go on your Web site? Most importantly, do you change what you do in response?

As Chris says, that’s a lot of change.