THEME: New Year, More Challenges
FOCUS: Understanding the Big Picture
Monday morning: January 4, 2010
We live in a new normal. Some are calling it “radical uncertainty” while others are branding it a time period of “all gray with no black and white.” Personally, I think we are continuing to trudge our way through the Grand Canyon of Chaos. This journey has many miles to go before we get out. Meanwhile, there are some important lessons that we have learned along the way.
A long time ago, Peter Senge wrote, “today's problems [are coming] from yesterday's solutions.” Some leaders have forgotten that the strategic choices made years ago created what we are living through today. As I pointed out during numerous strategic planning sessions this past fall, the decisions we make in the winter of 2010 will create either more problems in the next three to five years or better solutions. The choices is ours to make.
One way to make better choices is to step back and examine the proverbial big picture. Right now, we are again seeing accelerated convergence of different trends across many different industries and markets. For example, as a result of corporate cost saving measures during the last eighteen months, many customers are angry about the decline in real customer service. One unintended consequences of these corporate actions is that competitors are actively trying to lure customers away from certain businesses through more personalized service options.
When contemplating the big picture, we begin to wonder how we got into such a mess in the first place. The answers can not be found in the last eighteen months. One must look further back in time to the 1980’s where we had Father-Knows-Best corporations with top-down, command-and-control leadership. In many sectors, excellence was a new idea and people were just units to increase sales.
Then in the 1990’s, a new era dawned. Many companies thought the internet was the be-all and end-all solution to every problem. But the smart companies soon realized that success was never was about dot.coms, IPOs, venture capitalists, or irrationally exuberant stock markets. They realized that a new economy was being born based on three factors, namely the expansion of individual opportunity and impact, the disruptive energy of ceaseless technological innovation, and the transformative power of information technology and communications. All three of these trends converged in the 90’s and smashed into the Industrial Age model of business. Today, I think we are still picking up the pieces from this collision.
This morning there are three pieces that I want us to pay particular attention to as we enter the new year. First, many new systems are being built and many old systems are being consolidated or revamped to help organizations cope, grow or be consistent in their execution. My question as I witness this action is simple: Are these systems being built or consolidated based on out-dated thinking? Remembering the wisdom of Einstein when he noted that “no problem can be solved by the same thinking that created it.” What I do not see is new thinking or at least in-depth reflection before consolidation or redesign of key systems. Due to limited balance sheet growth, many organization are trying to consolidate antiquated systems rather than take the risks to completely pitch and redesign systems to meet the new expectations and options for delivery in this time period.
Second, it is clear to me that technological delivery systems and improvements are out-pacing management’s capacity to integrate them or even understand them. Recently, I have sat in more and more meetings listening to IT departments propose solutions to current problems. Nine times out of ten, I wonder if anyone else in the room is totally lost with the language that is being used and shared. Usually what I see is many executives nodding their heads, but I truly wonder if they understand the implications of their decisions.
For example, I have heard the words “centralization and efficiency though systems improvement” many times in my career. I also have seen massive investments of time and money take place once these words roll out. However, while the computer and related technology have made some things easier, it has not always changed human behavior. As we all know when people are faced with new or unknown situations, they revert back to old behavior and old ways of thinking. There are days now when decisions are being made by people who think “pencil and paper” or “type writer and white out” rather than iPhone, social media, Twitter or Google.
Third, some people are forgetting that even profitable businesses can go bankrupt. Cash management is very important in 2010, especially when funding streams continue to be in massive flux. Therefore, as Ram Charan in his book, Leadership in the Era of Economic Uncertainty: The New Rules for Getting the Right Things Done in Difficult Times, McGraw Hill, 2009, wrote “pursue only growth that is profitable and cash-efficient.” As he explains, “Cash efficiency means that gains in the market share do not consume disproportionate amounts of cash in the form of inventory, extended duration of accounts receivable, or increase complexity.”
As the new year dawns before us and we all head back to work, we need to have a deep, ground level understanding of how the current economy is impacting consumer behaviors, and at the exact same time we must also keep our eyes on the bigger picture. Remember: the choices we make now define and create the future we will experience.
Have a marvelous week,
Geery Howe, M.A.
Consultant, Executive Coach, Trainer in
Leadership, Strategic Planning and Organizational Change
Morning Star Associates
319 - 643 - 2257