03 Jul 2013 Spotting the early signs of corporate arrogance
Do you recognize this business? They are a market leader. They have a significant – perhaps largest market share in their industry. Everyone knows their brand. They recruit the best people and their brand looks great on a CV. They have the confidence to know that they can retain their market share and still win business without having to compete on price.
Can you tell who I’m thinking of? Here’s a few more characteristics.
Their business model is well established but is becoming a little dated. They don’t have many admirers outside of their organization in fact they are their own biggest fan. They have their critics but they seem aloof. They don’t react to criticism, because they don’t take it seriously. They have long forgotten the value of customers preferring instead the attention of admiring investors.
Who am I referring to? Actually, no single business. This caricature could have described many well-known businesses in many industries. Microsoft or Apple could, at some stages in their history, fitted this description. It could describe Accenture, Oracle or Ariba. All market leaders in any industry run the risk of becoming arrogant and letting their self-satisfaction blind them to what is happening in their industry. And it can be a serious issue. It leads to complacency. Corporate arrogance can be a fatal flaw – look at Kodak as a recent example – it blinds business and leaves them exposed to changes in their market which is why recognizing the signs of creeping arrogance should alert business leaders to the need for change.
When I say I’m not referring to any single business, that isn’t 100% true. Because there is one business that most Purchasing Insight readers know that is showing some early signs of corporate arrogance that may have, in part, contributed to a recent disappointing performance. Basware.
That will surprise lots of people. Basware are nice guys aren’t they? Yes they are but I’ve been looking at Basware on and off over a number of years and feel well qualified make this claim. I’ve seen their PR. I’ve attended analyst briefings and I’ve been sold to by them and when I read Peter Smith’s review of their recent financial results it made me think. Have they been too slow to deliver the synergies from their recent acquisitions? Have their claims about Alusta been a little premature? How in the current e-invoicing market when everyone and his brother is embracing it have Basware managed only modest growth?
I contrast this with a company like Tradeshift who are making great strides in growing their network. Their recent deals with Intuit and Invoiceware were inspired. And there’s a reason for their success – they have fire in their belly. You can see it when they compete for new business. And they’re not alone. OB10 exhibit the same levels of passion. Their founders turn up at the office every day, they’ll bend over backwards to secure business and they won’t take criticism lying down. I just don’t see this in Basware. What I do see is a great business that seems too busy polishing the chrome on their beautiful products to get out there and aggressively exploit the wide open market for e-invoicing and P2P generally.
Please don’t misunderstand me, Basware has not become a business behemoth. I have always liked them and still do and I would certainly include them on the P2P long list but they would do well to take a look at the way the outside world sees them and consider steps that they can take to avoid heading down the slippery slope of corporate arrogance.
Pete Loughlin can be found on twitter @peteloughlin