• Snails and Big Companies

    by  • April 8, 2012 • Human Resources, Leadership, Strategy

    I’ve always held the opinion that big organizations move at a snail’s pace. Every day, we see or read about bureaucracy – government is the biggest offender. But anyone who has worked with large NGOs (non-government, not for profit organizations), or giant corporations has tasted it. Sure, there are exceptions to the rule. The most valuable business on the planet has set a wonderful example for getting things done. But unlike Apple, most big companies don’t have the will or the way to cut through the quagmire of red tape to “just do it”. Even Procter & Gamble, a perennial success and a company I greatly admire, struggles to find nimbleness. Check out the complete list of similarities between big companies and snails.

    Snails are slow. While the speed of a snail is the most common knock against big company bureaucracy, there are several other similarities between the species.

    Snails can’t hear. Neither can some of the largest companies on the globe. I’d suggest hearing aids for the executives of BP, AT&T, Bank of America, American Airlines, and Charter Communications (cable TV provider). Consumers are telling these companies what they want, but no one is listening.

    Snails live in a protective shell. The shell for big companies is not bricks and mortar. It is clout. Clout comes from cash. We see this in the rash of acquisitions that fuel scale economies. Look at Kraft Foods. Nimble? Hardly.  Mighty? Definitely.  Here are just some of the acquisitions added to the Kraft portfolio since 1985 – General Foods, Tombstone Pizza, Jacobs Suchard, Nabisco, Danone Biscuits and Cadbury.

    Snails live in cool, dark environments. Companies like Halliburton and Monsanto inhabit similar environments. Despite consumer concern over its practices (particularly with regard to genetically modified foods), Monsanto doesn’t deviate from its unwavering vision to dominate. The power of their market share (much of it gained through acquisition of independent seed companies) has left farmers with fewer and fewer seed choices. A massive legal department has proven itself awfully good at pursuing those who challenge its dominance.

    One last question:  What happens when you take away a snail’s shell?
    You are left with a slug.

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    Formerlife: Jacobs Suchard CEO (Kraft, Nabob), Strategy Consultant. Afterlife: Palgrave Macmillan Author, Historical Novelist, Business Journalist

    2 Responses to Snails and Big Companies

    1. April 9, 2012 at 5:55 am

      Love the snail analogy. I suppose we need to remember the life-cycle issue. Once established and dominant, the Apples easily become more snail-like – think Microsoft. It’s possible that the snails have a place in the market, but from a macro perspective is it good for N America to have so many snails? Are the snails headed for a slow death or are they simply a fact of life. If the latter, how do you make your snail sustainable? For example, Kraft recently split into two divisions – will that make a difference? Whatever, we need more Apples!

      Incidentally, my bet is that Apple has peaked and will sometime soon start moving into protective mode. This not because of the passing of Jobs, but because there are now too many near-imitations in the phone market. The Mac never had near-imitations. Hope I am wrong.

    2. John
      April 9, 2012 at 9:46 am

      Always appreciate your input, Alan. Hard to argue that corporate snails are a fact of life. Their size & scale will sustain them, but for only so long. Who would have thought Kodak, a strategic “darling” of the 80’s, would file for bankrupty just 25 years later? As for Kraft, don’t be fooled. That split has nothing to do with nimbleness or focus. It is all about stock market value. The ‘Kraft Way’ is buying up companies with great brands, firing staff and closing plants for financial “synergies”. Mark my words, they’ll continue on the acquisition trail because organic growth is not a Kraft core competency. I think Apple will surprise us. The ‘break-up’ strategy (we use to call it SBUs – strategic business units) for the right reason may be the pesticide needed to keep the snails from eating the apple.