Organizational Changes Highlight Business Focusing and Crisis

Good news - bad news

There’s good news, then there’s bad news…

Organizational changes happen. Unfortunately, it seems they usually happen for negative reasons. Google, however, recently restructured as Alphabet to apparently “keep its lead as an innovator.” Meanwhile, Rovio and VW shuffled things around for not-so-positive reasons.

Who isn’t a fan of innovation? To those that are, it probably seems not enough of it happens anymore. To such people, that Google supposedly restructured in part to try and keep innovating is a good thing. But, does it have a hand in too many cookie jars? Is Google in danger of committing the classic business/marketing mistake: try to be too many things to too many people and you end up being nothing to everyone? After all, the mind can only accept you being so many things at one time. If Starbucks started selling burgers at their spots tomorrow, that’d just be weird.

There are tried-and-proven ways for Google to increase its potential for success in handling so many brands and products under one roof. The company gets an “A” for Alphabet to start. It should allow them to keep branding and organizational structure separate for differing products, even if they are all under one roof. But, it will take discipline to pull it off without having one brand dilute another.

Meanwhile at Rovio – the makers of the once-popular Angry Birds game – the company apparently recently cut much of its workforce. It seems it did what Google needs to avoid – trying to be too many things. That a game developer tried to also be a soft drink and candy maker was a mistake. Rovio might now be learning from those mistakes and refocusing, according to comments made by the CEO.

However, there is part of the quote (after the last comma) that raises concern:

“Rovio’s growth and eagerness to explore new business opportunities over the past few years has been exceptional,” Rovio CEO Pekka Rantala said in a statement on Wednesday. “As a result, we did too many things. In our current financial condition we must now put focus on where we are at our best: in creating magnificent gaming experiences, in producing an amazing animation movie and in delighting our fans with great products.”

Rovio is not seen by the average Joe as an animator or provider of “great products.” The average person, I believe, sees a “product” as a physical thing. We don’t generally call downloadable content a product. It seems the door is open for Rovio to again stray from trying to succeed again as a game developer.

And the crisis of the year goes to… Just about anyone that has come into contact with some source of news has heard about the VW crisis. In case not, you can read here or here or here to get caught up or just Google “vw” yourself. It ain’t a pretty picture. That the company’s executives fessed up to the deception was a good move. But, so many other things just keep mounting against VW. Apparently the problem was known by key executives as far back as 2011, which makes things look even more deceitful. In addition, the potential update to fix the software they allegedly manipulated may actually worsen things. As is always the case with a PR crisis, the cost will far exceed what analysts predict. Billions can and have been accounted for in the logistics, etc. behind applying a fix. But, one cannot account for the many people that have now turned away from purchasing a VW this year, in 2016, 2017, etc. because of this scandal.

What makes things worse for scandals like these is how easy it is nowadays for such a crisis to go viral. The world knows in an instant. These are the things that can topple a giant.