Steve Jobs died tonight. It is a sad day for us who are still here without a man who changed the world.
Years ago Steve offered me a career at Apple working for him spearheading the LISA project. Although I was leaving Mattel Electronics, as the digital game division was known in 1981, I turned down the offer. Any success would be his, any failure mine. I thought.
As history shows, Lisa (named after a girl friend) failed. It's competitive platform at Apple, Macintosh, succeeded.
The big idea is the question of opportunity lost. What would my life have looked like had joined Apple reporting to him?
There is no answer, but the key learning is how decision paths for corporate executives or entrepreneurs influence life long term. Looking at Apple today versus 1981, looking at Steve Jobs in historic terms rather than real time in 1981 still offers no answer to me. Hindsight is not 20:20, but Steve's passing for me emphasizes the need to identify life changing, key strategic decisions compared to other hot issues that have little lasting consequence. Long term outcome reflects leaders' choices.
My 1981 career decision punctuates the question, what if...
Recently my wife was diagnosed with cancer. We are stunned. She has had the best medical attention and followed all recommended health care protocols by multiple physicians. Yet, we did not catch the disease until it had metastasized.
So what does this have to do with business? The situation is a metaphor for how businesses die from within because management is relying on trusted but unchallenged measures of business health. Whether it is weakening cash flow due to declining profitability on existing businesses, new product or service launches that fail to meet their goals, or delays in business building activities that lower peak revenue realization, these events are rarely seen together by management as symptoms of failing corporate health.
Dun & Bradstreet studies show only 36% of businesses live longer than five years, and other studies suggest that 77 – 85% of middle market businesses fail to survive beyond twenty five years. The numbers are difficult to interpret, but evidence is clear that the vast majority of businesses fail, contrary to the myth in business school that corporations last forever.
To me these findings indicate that Management needs to consider using objective and seasoned outside advisors to a greater extent. The purpose is to gain independent and unconventional assessment of operations and business practices. Managers often argue that independent consultants without same-industry experience cannot offer meaningful insights and are too expensive. To the contrary, my belief is that by combining insights learned from many industries with deep scrutiny of any specific company is a formula for innovation.
Intense promotion wins quarters for the C-Suite, but innovation wins decades for shareholders. My colleague, Bill Donnelly, in the prior Oak & Apple Partners blog post speaks to “Why Good Companies Go Bad”. He identifies a loss of mission and leadership failure as key components for silent corporate disease.
Our other colleague, Ken Drossman, distinguishes in an interview between key performance indicators (KPI’s) and typical financial metrics used by companies. Ken argues compellingly for scrutiny of business DNA for unconventional leading data that predict strengthening or weakening performance and provide a call to action.
Collectively, Oak and Apple Partners believes businesses can live and even thrive through the natural life cycle of success and failure. One prescription calls for involving outside advisors to take on the role of a forensic performance team not only in times of decline but also at times when business is robust. Curing a company’s ills when it is strong is far easier than curing a weakened company.
For businesses as well as people, looking for unconventional insights to health is necessary in our complex and fast changing life.
Herman Melville’s Moby Dick opens with one of the most famous lines in American literature, “Call me Ishmael.” The novel is also the inspiration for the logo of Howard Schultz’s Starbucks coffee empire. The siren acknowledges both the seafaring nature of the historic coffee business and the irresistible lure of Starbucks coffee. Moreover, Starbuck was the first mate on the story’s legendary sailing ship Pequod.
To mark its 40th anniversary, Starbucks has redesigned the familiar logo, removing both the name “Starbucks” and the reference to “Coffee.” As a recent Knowledge@Wharton article asks: Logo Overhaul: Will Customers Still Answer the Siren Call of Starbucks? The simple answer is of course they will, because Starbucks is a loved brand that offers a social–coffee experience that few businesses have been able to develop or sustain.
My view is that redesigning logos is generally a poor investment and a distraction. Logo redevelopment may be justified under the flag of re-branding, changing business mix or internal leadership; all are examples of over-intellectualization of what is needed to create and sustain a great brand.
To me, a brand is the bundle of attributes that a product or services promises and delivers every day to its customers. Add to that definition that it does so profitably, which in turn means the brand’s message is meaningful, clear, interruptive and memorable and its pricing is value-based.
The Wharton article is worth reading because it embodies a rich discussion of issues to be considered when engaging in any brand development or redevelopment initiative. Some key considerations covered in the article include:
- Significant shift in strategic business mix: Starbucks’ business mix has changed, and will continue to evolve, beyond coffee, so management apparently believed the “Starbucks Coffee” moniker was limiting.
- International growth: Global expansion made translating the Starbucks message into different cultures and languages challenging. The goal was to simplify. Apparently management argued that the symbolism of the name “Starbucks” would not translate well.
- Dilution of brand message: By not standing for what made a business great to begin with or what management believes will make a great business, customers will not understand why the product or service claims are uniquely the best choice and thus consider supporting competitive brands. Clearly, company management decided to accept this risk.
- Backlash by loyal brand fan. The article cites a study by Vikas Mittal from Rice University’s Jones School that supports this conclusion. Backlash to change is a risk that must be considered carefully as businesses expand geographically and culturally.
Strategically there are other options to logo redesign and the management distraction caused by this activity in managing brands. The first and most significant principle of branding is to engage current and prospective customers. One must question whether there is a significant flaw in the existing bundle of communications and deliverables that limits growth and/or greater opportunity in a strategic shift of all brand-related elements.
In my experience, logo design is one of the most over-emphasized brand development elements and one of the least significant attributes of brand experience. My recommendation is to treat, and invest in, this activity with the limited weight it deserves in the total brand decision-building program.
Over the last several weeks executives from both Fortune 500 and mid-market companies, in talking about limits to top performance, said the big barrier to their personal and team success was not understanding where their company was going or what the Big Idea was.
It’s the vision thing.
Vision is often hard to define but starts with the leaders of organizations. P&G’s vision states, in part: “We will provide branded products and services of superior quality and value that improve the lives of the world’s consumers.” Its vision is anchored in improving the lives of its customers. Similarly, Wal-Mart’s vision focuses on consumers: “The values that guide our decisions and our leadership are the 3 Basic Beliefs: • Respect for the Individual • Service to our Customers • Striving for Excellence. “
Where is this going? Ideas create exponential value, up or down. Ray Kurzweil, a well known inventor, futurist and author, argues that because technology is growing exponentially, the future we will experience is not linear. Just look at current events in Egypt if you want confirmation of exponential progression of ideas from thought to action. Using the Internet, a small group of activists has quickly mobilized millions to protest.
Management has to think in this new dimension. The rate of change has become exponential. Vision, translated into action, creates monumental change. For example, Rupert Murdoch’s recent launch of “The Daily” promises a revolutionary new publication exclusively on the iPad. My sense is that this project is going to change the publishing industry by disseminating news to consumers on a profitable basis. The Daily integrates text, video, audio and tactile experience into news. The vision is that the under-35 audience gets its media from the Internet, not print or TV. Hence, make news and information available where people look for it, in ways that consumers are willing to pay. Fifteen million iPad users will determine if the vision translates into reality.
On the other hand, action without vision has the potential for disaster. The GM Volt electric car illustrates the idea. One can argue there is a dream of a green planet, but the Volt exercise is only possible to the extent that government subsidies prevent financial failure.
Without a unifying vision of what “green” means, establishing the concept in consumers’ beliefs and enabling a process to build infrastructure are not possible; thus, individual projects are destined for economic failure. If “green” is the real vision and not a day dream, it seems to me that government and companies would sponsor rapid development of technologies such as thorium-based nuclear energy because the technology is particularly well-suited for use in molten-salt reactors, or MSRs, eliminating the risk of meltdown. Simultaneously, leaders in the US would exploit the natural advantages our country has with coal and natural gas to facilitate a “green” vision that is economically viable. These are viable infrastructure-based energy sources that enable low cost electricity, which in turn would catalyze exponential innovation in battery design and manufacture, thus leading to rapid adoption of electric vehicles at the expense of petroleum-based fuels.
We all dream of a better life, a stronger company and a fulfilling family. It’s the vision of making those dreams happen that translate thought to strategies, strategies to plans, and plans to action. Sharing those visions and plans inspires those around us to join, multiplying results exponentially.
Travelling home to New Jersey from California over the Christmas 2010 holiday, I and thousands of other travelers experienced a total failure by Continental Airlines management to lead in an obvious national crisis. Like many others, my return home was delayed almost a week. With over 4,000 passenger flights cancelled in the US alone due to weather and related events, there was no question that this was a crisis without a simple solution. The absence of any leadership by Continental, however, mocked and undermined its advertising slogan “Work Hard, Fly Right”®.
What occurred was an abdication of responsibility for the care, comfort and perhaps even safety of its customers. For starters, many flyers did not know their flights were cancelled after printing their online boarding passes. That signaled the start of interminable waits at airports or in planes sitting on runways.
Those of us made aware of a flight cancellation before heading to the airport suffered an odyssey of three-hour waits on Continental’s telephone reservation system without ever reaching an agent, hours more online trying to book flights only to receive a “transaction could not be completed” message at the end of the booking process, and even more hours at airports trying to rebook. In brief, there were failures on Continental’s part both to communicate and to act.
While Continental could not fly its planes into the New York area, a banner could have been posted on its website that flights could not be booked due to overwhelmed logistics. Management could have reassigned staff or contracted temporary staff to handle calls, or at a minimum, added a detailed message to the airline’s automated telephone attendant system that calls could not be handled for hours. Both on and off line, management could have set realistic expectations for passengers and offered suggestions of the best means for re-booking as well as a check list of steps to take to get through the travel mess.
Finally, additional employees could have been brought into airports to help stranded passengers re-route flights. At a minimum, a portion of airline staff could have been allocated to handle stranded passengers while others attended to passengers with active flights; clear signs could have been posted to identify which lines were for current passengers and which were for stranded ones. In our case, all employees were left without guidance so that they all handled active travelers, and no appropriate signage was displayed, resulting in added delays, confusion, frustration and alienation from the Continental brand.
Here’s a suggested short list for a company’s crisis management:
- When in doubt, do something; lead.
- Focus on customers.
- Communicate – give guidance and frame expectations about solutions.
In his October 1, 2010 letter to customers announcing the merger of Continental with United Airlines, Jeff Smisek, President and Chief Executive Officer of United Airlines, wrote, “As a loyal Continental customer, you might be wondering what this [merger] means for you. For now, it's business as usual.” With respect to future crises, let’s hope that he’s wrong.
