01 March 2019

The Portable Bubble

"If you are not being challenged in your thoughts, then you are not aware of what others who are different than you are thinking."   

--Mary Charleson


Larry Culp, the new CEO of General Electric (GE), had a successful run in the same position at Danaher Corp.  The market capitalization of Danaher grew to $50 billion from $9.7 billion during his 14 year term.   One of the management practices Mr. Culp employed at the global science and technology company was to spend time in the field.  Making himself available to workers as he toured various operations was his way of learning about matters first hand. 

GE laid off 30,000 employees in 2018 so there will be fewer associates for Mr. Culp to talk with as he makes his rounds.

At The Home Depot, members of the Board of Directors "regularly visit stores and engage in the operational review of stores throughout the year," according to the company's website.

Peter Magowan, who headed up Safeway, and later purchased the San Francisco Giants along with other investors in 1992, avoided the owners suite choosing instead to sit in the stands to experience the game with fans.  He did that while wearing a suit.    

Keep moving

In the 1980s "Management by Walking (or Wondering) Around," a term coined by Tom Peters, described the way in which Bill Hewlett and David Packard ran their computer company.  The idea of stopping by to talk face-to-face with employees, to get a sense of how things are going, and hear what they are thinking, has a lot value if done properly.  

That's certainly one way to keep from being enveloped by a corporate echo chamber where everyone thinks alike.  

Bubbles are portable, meaning it's possible to stay in one even while traveling.  Direct reports and executive staff often arrange schedules that make leaders visible, but unreachable.  When out and about it's important for top management to insist on engaging with those who run the business every day.  

Getting fresh air

Hal Gregerson, Executive Director of the MIT Leadership Center, has written extensively about executive bubbles.  "The greatest responsibility of a CEO is to recognize whether (the company) requires a major change in direction," Gregerson writes.  

How does one undertake that assessment without a free flow of ideas from different perspectives?  

Dr. Gregerson's interviews with CEOs highlight two disturbing themes: "People telling you what they think you want to hear; and people being fearful to tell you things they believe you don't want to hear."   

Nandan Nilekani, a co-founder of Infosys, says you have to guard against a "good news cocoon."  

What can a CEO do?

Are you insulated from information critical to your work?  To find out, ask yourself these questions:  

1.  How many barriers do people have to cross to talk directly with you?

2. How much of your typical workweek is spent outside your office or headquarters?

3. When was the last time you were dead wrong about something at work?

4. How quickly did you uncover your last mistake?  How fast did you change course?

5. How often do people ask you uncomfortable questions at work?

6. How often do you talk with people who make you feel uncomfortable?

7. How many questions do you ask versus statements do you make in typical conversations?

8. How often do you wait silently for others to answer your questions?

9. How many times this week have you said, "I don't know" in response to a question?


Source:  "Bursting the CEO Bubble"  


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(C) Bredholt & Co.










  










01 February 2019

2030


"There's no such place as far away."

--Richard Bach


There are 
10 years, 11 months  (3,987 days ) between 1 February 2019 and 1 January 2030.  While that may seem like a great distance, it really isn't.  The year 2030 is closer than you think.  
    
Since we perceive time speeding up as we age, take a moment to consider the following:

Leadership

1. How old are you now?

2. How old will you be in 2030?

3. Who is likely to be leading the business in 2030?

4. What is the current average age of your management team?

5. What is likely to be the average age of your management team in 2030?

Associates

6. What is the average age of your workforce now?

7. What is likely to be the average age of your workforce in 2030?

8. What is the primary source of your employees today?

9. What is likely to be the primary source of employees in 2030?


Customers

10. What is the current average age of your best customers, members, or donors?

11. What is likely to be the average age of your best customers, members, or donors in 2030?

12. What are the sources of your best customers, members, or donors?

13. How long did it take to develop those relationships?

14. Where will your best customers, members, or donors likely come from in 2030?


Paying too much attention to technological innovation, and not enough to relationships, tends to obscure the importance of demographics.  Fortunately, consistencies in behavior are more traceable than differences.  At the deepest levels of the human spirit people are quite predictable.  

Which is why in some ways 2030 is already here.          



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(C) Bredholt & Co.  




01 January 2019

Creating a Corporate Strategy


"The essence of strategy is choosing what not to do."

--Professor Michael Porter

Here's something to think about as a new year gets underway:

Does your business have a corporate strategy, defined as the desired future and a way to make it happen?  Is it clearly communicated and understood? Do the assumptions on which the strategy is based fit current reality? 

And is there congruency between the corporate and business unit strategies? Units need their own strategy, as do staffs. However, corporate should go first.    

The goal is an alignment of corporate, unit, and staff without which results are substantially lessened.

Getting started with the process can be challenging but having the right people involved is critical to the outcome.  With no one way to create a strategy (looking ahead and reasoning back), there are options to consider:

Option A (Predictive Strategy)

Premise:

The world is going to look like this--frame the corporate strategy for that future. 2
  • A message, theme or direction (20%)  
  • Implementation (80%)

Option B (Non-predictive strategy)

Premise:

We don't know what the world is going to look like.  Therefore we need a strategy or set of strategies that can be successful almost irrespective of what the world looks like. 3
  • A message, theme or direction (20%)  
  • Implementation (80%)  

Center of the earth

More than a few corporate strategies are rushed into creation, often by-passing the "core."  

If we begin at the center or with the purpose (why?) then there's a better chance the blank spaces get filled in with what makes sense.    

So what's a core idea?

It's a simple articulation of the original purpose or innermost reason for being. It forms the basis of an organization's culture. 

A core idea is central to what you're about.  It's not a mission statement; it's what you want to accomplish; a positive goal that can be realized at any time.

Some illustrations:  

o   Taking Wall Street to Main Street--Merrill Lynch
o   Technology married with liberal arts--Apple
o   Developing leaders of character--West Point

The right way to communicate a core is to embody or personify it.

No organization should assume current employees or management teams know what's in the core.  That means conversations, development programs, and on-boarding should include references to an organization's history and unique sense of purpose.   

A neglected idea

Borrowing from game theory we consider an overlooked, but valuable concept--having a dominant strategy. 

"In general someone has a dominant strategy when they have one course of action that outperforms all others no matter what competitors do.  If someone has such a strategy, their decisions become very simple; they can choose the dominant strategy without worrying about a rival's moves.  

Therefore, it is the first thing one should seek." 4

We learn that dominance in the term "dominant strategy" is superiority over another of your potential strategies (make a list), not of your business over a competitor.   

Avoiding common errors

After nearly five decades of observation, experience, and study, we note the following recurring problems facing CEOs when it comes to corporate strategy:

-Not being clear.

-Giving up too soon.  

-Building a strategy that's easily reversible.  

-Utterances and actions that don't match.

-Failing to have the right people in the right places at the right times.

(See our blog post, The Struggle with Strategy).

The speed of light

A year goes by quickly.  

What will you pay attention to over the next 12 months to ensure the business, under your watch, is moving in the right direction?  If it is, how to maintain momentum.  If not, how to adapt in order to regain momentum.  

No matter the analytics, the rare corporate strategy that works for any length of time is ultimately a series of judgment calls.  When it comes to thinking strategically, quoting Thoreau, "It's not what you look at that matters, it's what you see.         


1 Benjamin B. Tregoe and John W. Zimmerman

2 Philippe Silberzahn
3 Ibid
4 Avinash K. Dixit and Barry J. Nalebuff


www.strategist.com


(C) Bredholt & Co.