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Sunday, May 16, 2010

**[investwise]** Modern Dairies-BSE 519287 You Can Judge A Company By It's Site

 

You Can Judge A Company By It's Site

For years I have emphasised upon corporate entities to put forth their best face in front of people. Few corporates listen. Most often however, you can draw a link between a bad management and it's site. Take a look at www.milkplus.com (owned by the Rs 400 crore Modern Dairies), the site seems to never have been updated for quite a number of years. And the results tell all-the corporate has simply been blown away.


But Modern Dairies is not an isolated example. Look up the site of most Banks which in all likelihood have passed on communications to third parties. This includes the veritable MNC bank Standard Chartered-and even though it provides an inter-active site, the chances of your getting an appropriate answer is remote. And this is the problem. So many entities have simply given up their core businesses and begun concenterating on short term opportunities like selling mutual funds and gold that they have forgotten builds their ultimate base-the consumer or the depositor in the case of banks. 


However Indian's are not alone


Apple is a marketing-obsessed company with corporate teams that don't talk to one another. Toyota's leadership is too old. HSBC doesn't coordinate nearly as smoothly as those identical airport ads suggest, andGeneral Electric is struggling to create an integrated whole.


Those are some of the conclusions I've drawn from examining the websites of 75 of the world's largest corporations. I call it Web phrenology, after the 19th-century pseudoscience that proposed your personality could be judged from the shape of your head. Look at a website, give it a good prodding, and it is surprising how much you can infer about its owner. This won't replace rigorous financial and commercial analysis, but it can certainly be fun.


Having followed the commercial Web since its beginnings, I have often found myself coming to almost subconscious conclusions about the companies with sites I look at. When I then check against the real world, I find I'm usually right. The Financial Times-Bowen Craggs Web Effectiveness Index, the fourth edition of which has just been published, is a phrenological gold mine.


The point is that a website--or a rather a Web estate, meaning all the sites an organization owns--exposes a company in a very new way. Before the Web, a business could carefully control its public image through its public relations, advertising and publications.


If some scoundrel of a journalist found out something unfortunate, the PR organization would move smoothly into action to limit the damage. And there was no way an outsider could get a glimpse into the internal workings and politics of the mighty corporate machine.


Then the Web came along, forcing companies to provide a face for everyone to see. It would be easy enough to control the superficial impression, perhaps, but it has proved much trickier to hide the deep wrinkles. There are two reasons for this. First, large companies have Web estates that are just too big to control. IBM.com comprises 1.9 million pages; Siemens.com, 407,000. General Electric has a federation of sites, but its core site alone has 33,000 pages.


Second, the natural order is chaos. To switch similies for a moment, websites are like weeds. They pop unless they're ruthlessly controlled, and because they're a low-cost way to meet a need, they spring up whenever a manager has an urge. Each such site offers clues about the little bit of the company that owns it.


Ten years ago the typical corporate Web estate was a straggling and uncoordinated mass of sites; often even the main corporate information areas were disorderly. Since then companies have undergone huge amounts of redevelopment, realizing that such chaos was bad for brand and unhelpful for customers, investors and everyone else.


General Electric was one of the first to move, in the days of Jack Welch. Most of the other early movers were European, including Shell, Siemens and BP, which still top our Index. In the last couple of years there has been a surge of activity in the U.S.


This has made the phrenology more difficult but also more interesting. The most egregious companies are those that haven't even tried to pull themselves together, where chaos still rules. Either it is a mistake or it is deliberate. Some of each, I'd say.


Japanese sites tend to fall in the mistake category: They do remarkably poorly in our Index, none making it into the top half of the ranking. Look at Toyota's global site: toyota.co.jp. The fact that it hasn't seized the dot-com address from its U.S. subsidiary is a clue to the attitude in Toyota City. Scroll down the home page to the section headed "Topics."


Most of it links to a mess of sites that have nothing in common with one another, or with the main site. Meanwhile Honda (world.honda.com) has a search engine that returns results for Lexus and BMW when query "hybrid cars." Mitsubishi UFJ (mufg.jp) is just generally poor.


When a site has been given such feeble focus, the finger usually points to a lack of top management interest. Someone at the top has to say it matters, because good Web estates need cross-departmental collaboration, and that rarely comes without general management involvement. I suspect that a problem that used to dog Western sites--that the businesses were run by a generation that just didn't "get" the Web--persists in Japan.


The Apple story is different. That company's leadership is, I assume, Web-savvy. But it hides it well. Let's pretend I'm a business journalist who wants to dig around in Apple's numbers. I need the "Investor Relations" section. Unfortunately there is no signpost to it on the Apple.com home page.


By trial and error I discover that the "Media Info" link leads to a press area that has a link to the investor area. I go there, find what I want and decide to return to the press releases; I can't. That's just one example in a corporate site that consists of barely connected silos of information. To use the jargon, Apple is not taking a user-centered approach to its site. Strange when you look at the company's products.


Apple's site is the worst, but Microsoft's and Google's aren't much better. They're fragmented, uncoordinated and hard to use. Why?


Mainly because they reflect their companies' decentralized philosophies, I suspect. Those businesses grew mighty by letting their creative people do their own thing, and they have extended that attitude to their human resources, press, investor relations and corporate social responsibility departments. I wonder if those people ever talk to one another in real life. They certainly don't online.


In addition, the Apple and Microsoft sites are aimed resolutely at customers, and the Index shows that they serve them very well. I suspect those sites are run by marketing people, and everyone else gets the crumbs. If there isn't friction about this, there should be.


London-based HSBC calls itself "the world's local bank" and is famous for running the same advertisements in airports all over the world. It surely must be a joined-up organization.


I don't think so. Look carefully at its sites and you will see that their similarity is mainly in the look. They're not as poorly coordinated as many Web estates, but they're far from the smoothly integrated whole those ads would have us believe.


Perhaps the most interesting of the big estates is General Electric's. It buzzes with fascinating material, but there's something odd about its structure. As you dig down through it, you find yourself meeting different templates, as though you are burrowing through geological layers. 


This is common enough in poorly coordinated estates, but at GE? I would guess even Welch's effort at coordination wasn't quite as complete as it appeared, and that subsequent attempts to bring order to the great beast have had only partial success.


That is what I gather from the Web. I leave it to others to say if I am right.


Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
 
Nothing in this article is, or should be construed as, investment advice.
 
 
 

 
 

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