When Does A Company Exit a Market Based on Principle?
Posted on January 13, 2010
Filed Under Governance, Gregg Gallagher, Leadership, Strategy, Strategy Execution |
The issue of principles-based business decision-making came to the forefront this past week with the decision by Google to withdraw from the Chinese market following an apparent major cyber-attack on it’s systems (as well as a number of other technology firms.)
Google’s corporate motto is “Do no evil”, and it personally struck me odd (as it did a number of other, more vocal groups) that Google acquiesced to China in the filtering/censoring of it’s search engine. To me, this was an abrogation of it’s motto, and significantly blemished it’s authenticity.
There’s a cynical observation that “Sincerity is everything, and once you can fake that, you’ve got it made….” And all too often, this is how the general public, but particularly the business world - led by old-school public relations hacks - views such issues as authenticity, corporate mission, and principles-based decision-making. This cynical view was embodied in a quote from the New York Times of 1/12/10, in an article entitled “Google Would Abandon a Lucrative Market” written by Miguel Helft:
“Many people in Silicon Valley were surprised by Google’s stance. “I don’t think anybody is going to run away from China,” said Joe Schoendorf, a partner at Accel Partners, a Silicon Valley venture capital firm with a major presence in China. “Google has Microsoft on the ropes, and China is arguably the world’s most important market outside of the U.S. You don’t walk away from that on principle.””
It’s been my personal experience that most people - and thus, most businesses - truly want to “do the right thing” as it relates to their customers and partners. And it’s very easy to be principles-based when it’s convenient to do so (e.g., in alignment with your revenue objectives, contractual relationships, etc..)
However, the true test of one’s principles is when it is inconvenient to do so - and it’s here where human frailties can hold sway, with rationalizations of actions - in Google’s case, their justifying filtering & censoring as a means to eventually open up China over time.
Hopefully, it now seems that Google has come to finally embrace & apply their motto as it relates to the inconvenient realities of doing business in China.
Kudos to them if they can maintain their regained moral compass as it relates to the Chinese market….
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nicely said Gregg