4 mistakes that will kill many big corporations
Today I wanted to talk about 4 dangerous mistakes that too often are overlooked by big corporations, and share with you examples of corporations in 2 industries (consulting, banking) that I’ve observed:
- Meaningless company values.
- Outdated recruiting practices.
- Too few startup acquisitions.
Nothing like being a big player, with a long history, with thousands of employees, millions (or billions) in revenue, and a mainstream brand, right? Only that when it comes to business, the past, and especially when technology is involved, isn’t a good predictor at all about the future.
A little bit of humbleness doesn’t hurt.
Meaningless company values.
This mistake is almost tied with overconfidence as a universal mistake for big corporations.
Let’s get it straight: if your company culture values are just a decoration that looks good on the wall of your office or your corporate website, your company has a serious problem.
Yes, I know that all you care about are more sales and increased profit, but how are you going to accomplish that if aren’t not only able to engage your employees and motivate them, but to actually retain them? This is especially true as millennials and Gen Z become a bigger percentage of the workforce.
Younger generations aren’t just fine with a paycheck at the end of the month, they look for work that has a meaning, a purpose to them, and a unique culture they can feel they’re a part of.
Values like “Excellence” or “leadership” aren’t doing any favor to your employer brand.
Outdated recruiting practices.
It’s terrible to watch how frequent is for big corporations to keep hiring like they did 5, 10, or even 20 years ago. Seriously, the average recruiting process in big corporate is so inefficient and flawed that I would need an entire post to talk about it.
If you want to do an assessment of the future evolution of a company, look close to their hiring process and how they build and structure teams, it’s by far the best predictor of the future success of any company.
Worst case scenario is when they do all recruiting in-house (a mistake also done by many startups), or they outsource to another big corporation… especially when looking to build teams with young talent (millennials and Gen Z), your best bet is to look for the help of a company that actually understand them.
Too few startup acquisitions.
There’s no more obvious red flag from a big corporation than when you see they opt to build in-house a new product/service to avoid purchasing startups. It’s like these corporations either are too stubborn on not spending more money now to have a better long term future, or they have very bad memory (or live in a cave). Let’s refresh the memory:
- Facebook vs Google: remember when Google tried to kill Facebook with Google+?
- Snapchat vs Facebook: when was the last time you heard about Poke?
If 2 of the most successful tech companies in the world failed miserably building in-house copy-cats, what makes you think you can do better than them?
One thing is for sure: everything else equal, the corporates that do less startup acquisitions will be the first ones to fall and disappear.
First example: the “Big Four”
Easy examples of corporations doing these mistakes are the so called “Big Four” accounting firms. I have yet to meet one current or past employee of these companies that feels like the work they do there has any meaning to them.
Their supposed culture values are something hidden on their website, that not even their recruiters, HR managers, and PR people can even remember when asked…
Instead of teaching them that empty label (“Big Four”) that everyone working on these companies repeat like a robot, they could spend more time taking care of their employee’s personal growth and work-life balance, or else they we’ll keep having such a ridiculous high employee churn rate.
One wonders how long will it take for old corporations like these ones to realize that the mistakes they have been doing for too long (and keep doing), not only makes them very vulnerable to much more efficient emerging tech companies, but they are also providing these emerging competitors with the weapons, artillery and everything they need to take advantage of their structural weaknesses.
Second example: banking
Another interesting example is how the 3 big Spanish banks are reacting to the Fintech wave:
- One bank is far ahead of all others, making good acquisitions and strategic investments, and is also taking action to get right 3 of the 4 previous points.
- The second bank is going slower and taking a more conservative approach, still relying and investing too much on traditional marketing channels.
- The last bank is making every single one of the 4 mistakes above. Without a much needed critical strategy change very soon, it looks completely lost at this point.
Too many big corporations aren’t taking disruption seriously:
- Believe they’re going to keep the huge advantage they have enjoyed in the past.
- Skip doing necessary changes to become more meaningful organizations for employees.
- Keep their old-school recruiting methods to build their teams.
- Avoiding acquisitions to save cash in the short term is a disaster in the making.
Current innovation and disruption pace is nothing compared to the changes that are about to happen, much earlier than anybody has predicted, so expect to see more big corporations fall and disappear than ever before in the following years.