3 posts from September 2011

Finding Courage

People don't follow titles, they follow courage. In a society with as much dourness as there is today, I attribute this condition to a lack of courage in decisions being made in both public and private institutions. This is causing citizens and employees dissidence in reaching alignment with the people we follow because leaders seem to make decisions based on personal interests rather than the courage of following strategic principles.

Often we think of leaders in terms of politicians. Democrats and Republicans alike have demonstrated self - serving hubris rather than the transcending mission of government. Examples are everywhere, but on the Democratic side we have Eliot Spitzer disgraced AG from New York and Charles Rangle censured Senator for ethics violations and tax evasion. Republicans fare no better with Tom Delay jailed for money laundering and Duke Cunningham jailed for bribery and corruption.

Many leaders in private industry also appear to have self interest as a guide for their behaviors lacking courage to honor strategic principles.  For example, despite all corporate posturing about being solid citizens, twenty five of the largest one hundred companies pay their CEO more than the corporation pays in taxes (Reuters, August 31, 2011). Examples are GE, eBay and Boeing. The accounting is presumably legal, but is this socially in the best long term interest of shareholders, other stakeholders and overall global wellnes?

As simple as it sounds, I work with CEOs and boards to find decision making courage within the framework of their company brands. As the Constitution is the time - honored strategic guide to public mission, brand is the corporate commitment to customers and embodies the company's mission. Thus a brand model becomes a process, like the Constitutional one for government, which causes deep reflection on the promise to customers. And if used to its fullest, brand concepts serve as a management decision making platform from employment to investment, from social initiatives to fiscal imperatives.

An corporate example of this principle i.e., using brand credos to frame complex management decisions, is when James Burke, CEO of J&J during the 1982 Tylenol - cyanide crisis. Burke believed that J&J's first responsibility was to its customers, second to its shareholders. During the crisis management meeting he asked his executive team what the basis of the J&J brand was with its customers. The response: TRUST.

He had the courage to order a recall Tylenol product, which could have been the death march for the leading analgesic brand in the US. He said: "It became clear that our value system had been vital to our ability to outperform the competition for nearly one hundred years.  Whenever we cared for the customer in a profound-and spiritual-way, profits were never a problem." After pulling all product from the shelves, Burke's courage was vindicated within three years when Tylenol regained its market share which increased later based on demonstrated goodwill and innovative tamper proof packaging and new product forms like caplets.

Net, decision making, whether guided by the Constitution for government or brand strategy for business offer frameworks for leaders to use in building commitment to goals and actions that achieve results.

 

Jumping Cows

Executives in middle-market companies we work with frequently model marketing, sales and even operating processes used by larger companies. More often than not, results do not meet expectations. My observation is because the solutions chosen do not suit the company's given objectives and require more resources than the organization has available. Furthermore, employees and teams are not trained sufficiently to execute the demands placed on them with such imported systems.

A basic truism is that middle-market businesses need to improvise, innovate with limited resources and inspire employees to find simple but elegant solutions to challenges. Specific business to business examples offer insights, but I find metaphors are more memorable in illustrating how unconventional solutions to problems, inspires new ways to think, and can be used to lead teams to achievements never before conceived.

That's where jumping cows comes in.

A German teenager,Regina Mayer, wanted a horse so she could jump, but her parents said no. Because the family apparently had cows on the family farm, Regina decided to teach one cow, Luna, to jump like a horse.

As Steve Hoffer reported: "Luna wasn't ready for cow-back riding right away, however. The transformation from stubborn farm animal to long rides in the German countryside was nearly a two-year process, gradually progressing from strolls through the woods to Mayer finally mounting her trusty steed." Here is a link to the story and video, a must see illustration how frustration can be turned into inspiration.

We see companies trying too many tactics without matching resources to activity. We see them looking big and smart rather than  achieving meaning and substance, and concentrating on doing things versus focusing on essential customer needs. Today, companies are advised to use social media, link video on Facebook to web pages, go viral with YouTube and stay in touch via Twitter. Lost in the conversation and analysis is a deep discussion about  who the customers are, how they acquire information, and compatibility between the essence of the message and trustworthiness of the medium.

Regina Mayer and Luna remind us to be centered on results, patient with process and indifferent to style as long as we are true to purpose and mission.

Perhaps someday we will all be jumping cows.

 

My Wife Has Cancer

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.