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 / Second Quarter 1997 / Issue 7(originally published by Booz & Company)


What the Heck Is a Company, Anyway? Reflections on Identity

In an age of mergers and acquisitions, identity management is becoming increasingly difficult, yet necessary in terms of both customers and employees. The key to make it work? Creating a feeling of community.

 To hear Gilbert F. Amelio talk at a meeting of Apple Computer stockholders last February, his job as C.E.O. has been an executive nightmare: leading a company that "acted less like a coherent organization than a loose coalition of projects. A collection of tribes instead of a modern industrial enterprise."

How could such a fractious thing ever hope to stay coherent enough to project an easily grasped image, inspire employee loyalty and keep customers? What any sensible executive would prefer to lead is an organization that knows its own essence, where being on the team means something stunningly clear to both those outside the enterprise and those who work for it. Some executives, for instance, boast of their company as if it were some proud, ethnically uniform and unambiguously bordered little nation with a coherent identity. "McDonald's isn't a job," Paul Preston, the president of McDonald's U.K., proclaimed last year. "It's a life. Our employees have ketchup in their veins."

Few executives, though, can be that confident. Many would identify with Mr. Amelio's description, even if it's closer to their anxieties than Monday's reality. Leadership is giving shape and direction to a collection of people, and that requires a vision. But a vision of what, exactly?

Pronouncements like Mr. Preston's, commonplaces though they may be of business rhetoric, actually beg a question few decision-makers like to ponder: What really is the identity of the corporation? What is that which exists not in any one employee but is created somehow among them all, this spirit, or pattern, or ethos, that makes McDonald's, or Apple, or I.B.M. recognizable from year to year and decade to decade even as personnel and products turn over? An identity whose benefit, some would assert, is that it enables a company to react to challenges as a single unit -- quickly, orderly and without undue dissent.

A brand-like identity -- according to Harvey Golub, chairman of the American Express Company -- that helps a business make decisions faster because the principles that inform decision-making have been internalized by employees.

Such a corporation behaves as a single living being, its many separate individuals forming a group organism, like a beehive or some forms of jellyfish. Such organisms aren't uncommon in nature, and there are biologists who believe people form them too, when they throw themselves in with mobs of sports fans or close-working teams. Certainly, such an identity is an ideal many executives pursue, and it supports the "corporate identity" industry -- a handful of firms that handle name-changes and shifts in corporate culture.

In a time of rapid social change, the problem of identity is one that any leader must sometimes ponder, be the entity a nation, a church, an ethnic group or a family. But it is felt particularly keenly in businesses, because companies now operate in an environment that strips away many of the reassuring props of identity that keep other kinds of groups in one piece.

The iron rice bowl of a job that lasts a lifetime is a thing of the past, and the 30-year veteran with the institutional memory has been replaced by the temporary worker (use of temporaries has risen by 240 percent in the last decade). Mergers and acquisitions follow the logic of finance, not of corporate culture, mixing apples and oranges. The unchanging company logo, product or service has yielded to constant shifting in response to technological advances and the requirements of a global market. The American work force, once made up of a majority of white males, has given way to the work force of two genders and many ethnicities. By the year 2000, 85 percent of those entering the United States job market for the first time will be women and minority members, according to Labor Department projections. Even the common ground of a shared office building is giving way to networks of scattered workers and telecommuters linked by modems.

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