Quoted in their original IPO letter, "Although we may discuss long term trends in our business, we do not plan to give earnings guidance in the traditional sense. We are not able to predict our business within a narrow range for each quarter. We recognize that our duty is to advance our shareholders' interests, and we believe that artificially creating short term target numbers serves our shareholders poorly. We would prefer not to be asked to make such predictions, and if asked we will respectfully decline. A management team distracted by a series of short term targets is as pointless as a dieter stepping on a scale every half hour."
How funny. How true.
Although I can't help but think that this is possible for a company the size of Google, only because of a few very Google-specific factors that may not be sustainable in the long run. viz.
- Founder Involvement. Google's founders and masterminds behind the original game plan are still very much involved in running the company, and direct the communications and long term strategies of the firm.
- No Complicated Irrelevant Businesses. Google has a key strength in a very specific (I wouldn't necessarily say small) sub-segment of the tech industry, although it is leveraging on that strength to leverage into other related new businesses. Two elements - a) they are related businesses and b) they are Google driven developments. No acquisitions, no third-party involvement apparently.
- Small in Size. Google has small teams, less than 10,000 employees worldwide across 50 or so countries. Small cohesive teams who are function driven are less likely to come up with schizophrenic decision-making processes. Couple this with an astute hiring process that summarizes effectively the kind of skills required in each position, rather than attempt to define what the job does (everyone knows that's a disclaimer anyway...) makes it easier to identify who you need where, and the kind of skills and experience you're paying to buy in a person.
Different, but not different enough.
It's amazing how when (if) one does a comparison of code of conducts/company core values across several large competing IT firms... one comes up with pretty much exactly the same thing.
Google believes in...
- Honesty and Integrity - clean books and no hanky-panky business relationships
- Customer Focus - serve the end user and putting the end user focus first
- Respectful Internal Culture - ranging from detailed employee benefits (free washing machines and lunches) to no illegal substance abuse to having a documented dog policy (quite impressive actually)
- Passion for Technology - believing that technology can change, if not save, the world
- Hiring talented, intelligent people who want to make a difference
Microsoft believes in...
- Openness - transparent business practices that are available to shareholders
- Honesty and Integrity - clean books and no hanky-panky business relationships
- Passion for Customer - put the customer first and enable customer success "Your success. Our passion."
- Respectful - employees treat each other and the company fairly and respectfully (provides well stocked employee benefits and suchlike above industry standards in most countries)
- Passion for Technology - believing that technology can change, or save, the world (and do both by breakfast tomorrow)
- Hiring diverse, smart people who have a passion for change
Apple believes in...
- Diversity and equal opportunities
- Caring for the environment
- Having good governance on business operations and relationships
- Not just "checking the box"
So much weight on brain process, so little brain to go around. The idea is... if core values are so similar throughout the industry, what truly sets any company apart? Do their products? Their mission statement? Their pricing? When we buy a stock in an IT company like one of the big three above, are we really kidding ourselves when we say we're buying into their growth options as a company?
It feels like the ethos of a company is really the ethos of the industry in itself as a vibrant and tangile whole. It feels like when we invest in Google, or Microsoft, or Apple, we're buying into the feel for the whole industry, into our beliefs in agreement with theirs, that technology can truly change the world, that smart people is really all we need. And either one of these, when the price is right, may suffice.
2 comments:
i'd like to believe that the company that makes the best product succeeds in the market.
but as you point out (among other things), products and services are more commonly differentiated on ephemeral qualities rather than genuine benefits; its ethos, if you will (there is a rant there, but i'll save your ears).
if companies share a common thread in their corporate values, it is because these values are ideals that we, as humans, aspire to.
(as a little side project, how many schools have mottos and values that are vastly different from its peers? how many share the same values?)
therein lies the proverbial rub.
companies are not human, despite the best efforts of corporate spin doctors, the U.S. supreme court and the 13th ammendment.
to buy a product, service or stock, on the belief that you, and it, share a common goal is facetious. in truth, you've bought a lie.
these corporate persons, their identities, quirks and beliefs are carefully crafted marketing. corporations are "who" they are, because it helps the bottom line.
the founders, the board, the employees and its consumers may all share the same beliefs and goals. the corporation doesn't.
it adopts them. wears them.
it can also discard them without messy emotional breakups or psychological dissonance.
nothing you don't already know, i'm sure. and if you're the same girl who once exhorted her readers to boycott america in economic protest, you might also believe.
where i do disagree with you , is in the assertion that investors are quite so emotional beings.
casual investors, perhaps. consumers, certainly. but the people who have, and have abundantly, are seldom quite so gullible.
not for long anyway, or else they wouldn't have quite as abundantly.
oh. almost forgot this.
(and here's another side project. if corporate personas are created as a marketing tool, why is google google?)
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