November 10, 2011

Visible Aspects

At any level - from regional to division to enterprise - a company's most visible aspects to its customers and the rest of the outside world are its products and services. It's not that most companies define themselves this way: "We are a car company", managers say, introducing their firms. "We are a phone company". "We sell accounting Services". 

Even companies that migrate to other businesses in a coherent manner still retain their original identity: IBM and Apple are still referred to as "Computer Makers", and Disney as a "Cartoon Company", even though all three companies do so much more with the same capabilities system. 

Internally, product and services categories are even more closely tied to a company's identity. Companies count their revenues and costs accordingly, thereby reinforcing the roster of products and services as the company's organizational spine. This is a natural thing to do, but it has unfortunate side effects. Instead of differentiating you, it sets you up with the same structure as just about every other company in your industry. IT amplifies the incoherence penalty, with its costs and inefficiencies.

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