Step forward, corporate personality of the century.
As we gather round the digital Christmas tree, it is time to choose the corporate personality of the century. As with any Christmas game, I must first explain the rules.
When I talk of corporate personality, I mean just that: the company, not the individual. The law created the concept of corporate personality over a century ago, distinguishing the company from the individuals who run it, own its shares, or work for it. I think corporate personality is a useful idea. It is a commercial as well as a legal feature of successful companies. The modern tendency to equate the actions of the firm with the ideas of the chief executive leads us to miss important features of what makes these companies successful.
And I decided, reluctantly, to confine the competition to the century rather than the millennium. There is only one serious contender from outside the twentieth century – the East India Company – which founded an empire and established the modern international trading system. Still, Clive and Warren Hastings are no longer around to receive their awards, and I do not think the modern governments of India and Bangladesh would willingly see themselves as their successors.
For related reasons, the company which most computer junkies would choose, the one that literally stares them in the face – did not make it to the final list. True, Microsoft now has the largest market capitalisation of any company in the world. But that market capitalisation far exceeds any revenues or profits it has earned in the twentieth century. The valuation of Microsoft shares reflects less achievement in the twentieth century than an expectation that this provides a platform for far greater achievement in the twenty-first. So Bill Gates will have to wait for his Oscar.
The car had the impact in the twentieth century that internet enthusiasts claim information technology will have in the twenty-first. The availability of cheap, efficient personal transport changed everyday life and the opportunity to deliver goods quickly, reliably and flexibly had an impact on every aspect of business life. Most of my short list were direct or indirect beneficiaries of the development of the automobile.
Ford and General Motors are both strong contenders. Still, it is salutary to note that anyone writing in 1900, and correctly foreseeing the impact of the automobile, would nevertheless have stood no chance at all of identifying Ford and General Motors as the companies to watch. These companies are there not just because they led the transport revolution. Ford invented mass production and General Motors the modern divisionalised corporation. In doing so, they influenced every other business.
The car also accounts for the success of non-American companies among the finalists. Shell is unquestionably European corporate personality of the century. Yet while an extraordinary performer in its own right – it is almost the only business to have maintained the same degree of dominance in every decade – it does not seem to have had the impact on the management of other businesses that would qualify it for the top spot.
Toyota certainly has had such an effect. The company not only symbolises Japanese success in creating and dominating a world market in durable goods. It forced even the most monolithic of American firms – such as the late century General Motors – to rethink the ways in which they organised their activities. Yet, in Japanese style, no one Japanese company stands out overwhelmingly from its compatriots. Japan Inc might win, but not any single Japanese firm.
The twentieth century was above all the century of the large manufacturing corporation. Some of these, like Ford and General Motors, were distinguished for the creation and management of operations of hitherto unimagined complexity. Shell, although not a manufacturing business, did the same. But another group of successful manufacturers were those who exploited the possibilities established by national transport and national media to develop an entirely modern business – the provision of branded fast moving consumer goods.
Procter and Gamble, Unilever, Philip Morris and Coca-Cola are names to conjure with here. It is a measure of how far we have come that the modern marketing we associate with these companies had barely been invented a century ago.
I tried, but failed, to find a retailer or a financial services business which deserved to make the final short list. Sears Roebuck seemed too old, Wal-Mart too new. Somehow the life cycle of the successful retailer is so short that such companies cannot do well in a competition where prolonged records of success are essential.
And there was no bank which seemed to have a strong enough claim. J.P. Morgan and Goldman Sachs have powerful corporate personalities, but they are hardly the businesses of the century. Perhaps American regulatory restrictions on financial institutions prevented any company achieving the position in the banking industry which General Motors, or Microsoft, or Procter and Gamble achieved in theirs. Perhaps banking management had – maybe still has – an unparalleled ability to screw up their own business even as they advise others how to run theirs.
But there is a clear winner. One company dominates its businesses at the end of the century as it dominated its – different – businesses a hundred years ago. It has always been one of the world’s most admired companies – whoever its chief executive. Yet that chief executive – whoever he has been – has always been one of the world’s most admired businessmen. It has led every innovation in management thinking – and followed every fad. Step forward General Electric, corporate personality of the century.