retail news in context, analysis with attitude

by Kevin Coupe

In the New York Times "Corner Office" column over the weekend, there was an interview with Steve Case, the founder of America Online - and one of the people who engineered the ultimately disastrous merger of AOL with Time Warner - who is now CEO of Revolution, an investment firm. While the piece spends more time looking at the merger and how it might have worked better, even more fascinating - and instructive - was Case's answer to a question about CEOs who say they "want to stay small, culturally, even as they grow."

His response:

"I think that when people talk about staying small, they’re saying they want to be big but still be nimble and creative and innovative and flexible. They also want to still feel like attackers, not defenders. As companies get larger — and I saw this with AOL even before we merged, but certainly after the merger with Time Warner — we did shift from being an attacker to a defender.

"And I realized the world of business really separates into these two groups. The attackers are the entrepreneurs who are disrupting the status quo, trying to change the world, take the hill, anything is possible, and have nothing to lose in most cases. They’re driven by passion and the idea and intensity. Large organizations — and it’s true of Fortune 500s and it’s also true of governments and other large organizations — are defenders. These guys aren’t trying to pursue the art of the possible, how to maximize opportunity. They actually are trying to minimize the downside, and hedge risk. They’re trying to de-risk situations. Entrepreneurs can’t even think this way. It’s not even a concept they understand.

"For the traditional executives running these large companies, of course they want to grow, of course they want to innovate, of course they’d rather have revenue grow faster than slower, but they mostly don’t want to lose what they’ve got. But entrepreneurs are deathly afraid that they won’t be able to change the world, and that somebody else will. Again, these generalizations are a little unfair, but corporate executives are all too often deathly afraid that the business they inherit will be less valuable when they leave than when they started."

This strikes me as an enormously important observation - that attackers disrupt and try to change the world and confound expectations, and defenders look to protect the status quo, to minimize risk and exposure. The question is whether companies can afford, in a 21st century competitive environment, to be defenders. Because as I look around, it always seems to be the attackers who are winning...sometimes in the short-term, and almost always in the long-term.

It's an Eye-Opener.
KC's View: