America is the leader of both the democratic world and the corporate world, but the two worlds are very different. One of my favourite businesses is Google. I can safely say my life is better because of the company. It provides a product that you don't feel bitter paying for so there is no pricing problem. In fact, you don't explicitly pay for the most important product which is search. The advertisers pay to get your attention. They are also happy about it since there is a clear link between what they pay and what they get. An advertiser won't bat an eyelid spending $10,000 on a campaign they know tends to lead to $20,000 in sales. Advertising on TV is like shouting at a crowd where a handful of people might be clients. When search is involved, it is more like advertising to people who say they are looking for your product. The fact that Google did well to start means they are learning all the time from huge volumes of searches. Their searches are getting better. The business generates a steady flow of cash and they are investing in some exciting long term projects.
But they are not a democracy.
Google is a great example of a company with a benevolent dictator, well... a benevolent triumvirate with Larry Page at the helm (along with co-founder Sergey Brin and Chairman Eric Schmidt). Earlier this year they split the stock of Google to form new shares with no vote. The shares the majority of investors held already had limited voting power. The newly issued shares carried no voting power. This meant nothing to existing shareholders. You got a no-vote share for every voting share you had, but meant that going forward Google could issue new shares without diluting the control of Page, Brin and Schmidt. Short version - they run the show. They will always run the show.
Schmidt, Brin and Page
Source: Wikipedia
I am actually ok with that since Google are regularly voted one of the best companies to work for and I find Page an incredibly inspiring guy. It is however interesting when you think of what we think of as democracy as voting power. I think it is a good example of looking beyond the surface to see what is important. Google is not comparable to a dictatorship for several reasons. The public have alternative choices for search engines. Advertisers don't have to use Google. Shareholders can sell their shares. Still, Corporate Governance is really important. At the moment Page is doing a great job, but the ability to vote on shares protects investors should things start unravelling. So there is something to worry about.
An interesting bit for me though is the balance they have between this strong approach to protecting power and how staff are treated. They are quite unique. In other firms, particularly where there is a meritocratic system (rewarding top performers), staff can be simply a part of the stuff that gets fed into the machine. High fliers do well and those who are struggling move on. The idea is that underperforming staff would do well to find somewhere else where they would be doing better. It is no fun to not be doing a good job, so they should find a better fit. Everybody wins. The problem is what I was referring to the other day - there is not a level playing field.
At the shareholder level, it is actually very easy to sell a share and buy another one. You can also diversify your risk by holding a number of shares. At the client level, businesses use multiple channels to advertise and would consciously manage the risk of using just one supplier. As part of the public, we love Google, but there are other providers of most if not all of their products. For staff though, it really is not as easy to move. We spend so much time at work to build up social capital. Our colleagues become friends. We invest ourselves in the work so that we are 'emotional owners' of the company even if we don't hold actual shares. If we are loyal we don't want to invest the emotional energy in going to lots of interviews when we aren't even looking for a job. Then when someone actually decides to move, often it is only then that they start investing time in getting to know recruiters or joining LinkedIn. Networks only really work if you have been investing in them when you don't need them. The time to join LinkedIn is when you don't need help, but when you are in a position to offer help. That is not how most people think. The job market is actually an awful place. Putting a CV together and going to interviews is a little like be thrown into the dating game after a divorce. People don't know you. They don't respond to calls or get back to you because they have other priorities. The same recruiters who called before turn out to be useless when they are needed. I know incredibly smart, talented people who send out hundreds of applications devoting hours to carefully crafted, individualised cover letters, and then receive little to no response. Each job application has multiple people trying to get the job and so it becomes like the Bachelor or Bachelorette reality show, with the company having the pick. To be fair, finding the right person to hire is hard too, but business goes on - it is a much bigger deal to the individual.
Democracy for me isn't about a vote. It is about being in a position to find happiness. That is the philosophical basis of the American project and why I think the US leads the way. Leading the way doesn't mean we have solved everything. We need to nibble away at the things that cause friction. I am actually happy that Google is doing a good job. Happy enough that it is my largest investment. I am less happy about the balance of power between people at work, and the workplace. Unless they are benevolent like Google and invest in being the best place to work, it becomes up to those in the workplace to think of ways to empower themselves.
The real labour revolutionaries shouldn't be fighting for job security for individuals. They should be fighting to improve how easy it is to switch between companies, and they should be thinking of ways to educate people to manage the risk of having one company being overly important to their happiness. They should be empowering people to think of themselves as businesses. To invest in their skills and their ability to learn. Then I would don my red beret Mr Julius.
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