For some reason, I just laughed out loud at the obvious, brilliant wisdom of this quote:
Apple is led by Steve Jobs, one of the most brilliant innovators and marketers on the planet. So, mere mortals like myself – and perhaps you – should stick to achieving growth in a more practical and sure way.
– Robert Bloom, The Inside Advantage
(In case you couldn’t tell, I put myself — and, I hate to tell you, but you, the reader, too — in the category of mere mortals).
In two previously published books, Profit from the Core (2001) and then Beyond the Core (2004), Chris Zook shares what several years of extensive and intensive research revealed about “how companies fail to recognize the potential of their core business and, as a result, prematurely abandon it in pursuit of hot markets or sexy new ideas, only to realize their error – often, when it is too late.” He suggests a systematic way for organizations to assess their full potential and to make certain, also, that they do not fall into “this common, and typically human, trap.”
In this volume, Zook draws upon an even wider and deeper wealth of research sources that include about fifty interviews, mostly of CEOs. The title is explained by the fact that he and his associates chose to study most closely those companies “that beat the odds. We also analyzed patterns of failure and estimated the odds of success offered by various paths in various situations.” He goes on to observe that all of the success stories built their renewal on their “hidden assets” that had been previously been undervalued, unrecognized, and/or underutilized. “These assets were not central to the strategy of the past, but they held the key to the future. Furthermore, the older and more complex the company, the greater was the likelihood of finding promising hidden assets.” In other words, many companies already “hold most of the cards for “a winning hand” but do not realize it.
No company is forever “unstoppable” but most (if not all) companies can take full advantage of the information and counsel Zook provides in this book to find correct answers to all three of these questions achieve core renewal without “leaps to distant and hot new markets, …being the first adopter of a pioneering new strategy,..[or making] a ‘big bang’ acquisition.” In fact, unless a given organization has “beaten the odds” by sustaining profitable growth, it should first define or redefine its core assets and then grow or renew them, before committing any resources to organizational and/or territorial expansion.
Although hidden assets are the “real key” to redefinition and capabilities are “the building blocks of renewal,” and I agree with Zook that they are, it is important to keep in mind that transformation and renewal initiatives should never end. Zook asserts that “the real focus of business should be external – on competitors, shifts in technology, and customer dynamics.” However, ironically, for many companies now searching for profitable growth, some “of their most challenging demons are internal” and their “most difficult foes” are often themselves. Unless they identify and then leverage the hidden assets they already have or to which they have easy access, they will either be out-of-business or acquired by another company within the next ten years.
Rarely do I re-read a business book but recently made an exception with Jim Collins’ How the Mighty Fall because I wanted to correlate his five-stage process of decline with what Richard Tedlow has to say about once-great companies whose leaders could not “confront the brutal facts” (one of the Good to Great principles) that Tedlow rigorously examines in his latest book, Denial: Why Business Leaders Fail to Look Facts in the Face — and What to Do About It.
In How the Mighty Fall, Collins addresses these questions: How do the mighty fall? Can decline be detected early and avoided? How far can a company fall before the path toward doom becomes inevitable and unshakable? How can companies reverse course? Contrary to what several reviews of this book suggest, Collins offers hope to organizations in a death spiral (Stage 1 does not inevitably lead to Stage 5). Here are the five stages of decline:
1. Hubris born of success: Faith and confidence become pride and arrogance. Leaders become careless and workers become complacent. “We’re so great we can do anything!”
2. Undisciplined pursuit of more: That is, more scale, more growth, more acclaim, “more of whatever those in power see as `success’ [and allow their companies to] stray from the disciplined creativity that led them to greatness in the first place.”
3. Denial of Risk and Peril: Although internal warning signs begin to mount, they are ignored because “external results remain strong enough to `explain away’ disturbing data or to suggest that the difficulties are `temporary’ or `cyclic’ or `not that bad,’ and `nothing is fundamentally wrong.’”
4. Grasping for salvation: “The cumulative signs of peril and/or evidence of risks-gone-bad” force leaders to decide: return immediately to being and doing what achieved greatness before or “grasp for salvation”? If the latter, the company will fall into Stage 4.
5. Capitulation to irrelevance or death: “The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward.” The process of erosion and deterioration continues until either the leaders just sell out or “the institution atrophies into utter insignificance; and in most cases, the enterprise simply dies outright.”
In Denial, Tedlow analyzes Henry Ford and the Model T, the radial tire “revolution,” and A&P’s and Sears’s non-response or insufficient response to paradigm shifts within their respective industries. These are stunning examples of the process of decline on which Collins focuses in his book, especially Stage 3. Although presumably that was not Tedlow’s intention, his own research and analysis support Collins’ conclusions and the process by which he arrived at them. Having re-read How the Mighty Fall, I think even more highly of it and of its author now than I did before.
That’s an easy question to answer: Your company today.
No matter what you do and how well you do it today, out there somewhere, another company will be doing it better, faster, and cheaper tomorrow.
So here’s the challenge…and the opportunity: Be that company.
It really is true that “good is the enemy of great.”
It really is true that most organizational wounds are self-inflicted, that most failed companies are not the victims of circumstances or casualties of competition: They commit suicide.
If you feel no sense of urgency, think about the businessman in Ernest Hemingway’s novel, The Sun Also Rises, whose company failed. He was asked how it happened. “Gradually and then suddenly.”
Tick tock, tick tock, tick tock….
Yes, it is rapidly becoming that free agent nation that we keep hearing about. Here’s a quote from the article about ABC news, describing the bold, new world…
“In newsmagazines and long-form programming, we will move to a more flexible blend of staff and freelancers” said ABC News president David Westin.
Anna Wintour is a genuine legend in the field of fashion. (disclosure – Fashion is a subject which I know less than nothing about). Editor-in-chief of American Vogue, Wintour is omnipresent in the fashion industry. The novel and movie The Devil Wears Prada are described as fictionalized accounts of her style (Wikipedia has a few paragraphs on the connection), but there is an actual movie about her that apparently is far more revealing. How influential is she? Here’s a quote from R. J. Cutler, the director of the documentary film about Wintour, The September Issue:
“Well, you can make a film in Hollywood without Steven Spielberg’s blessing, and you can publish software in Silicon Valley without Bill Gates’ blessing, but it’s pretty clear to me that you can’t succeed in the fashion industry without Anna Wintour’s blessing.”
I was being dramatic, of course, and all rules have their exceptions, but the point was clear — if you’re going to get ahead in fashion, you’d best have Anna on your side. As viewers of The September Issue have seen, even Burt Tansky, the enormously powerful CEO of Neiman Marcus, turned to Anna for help in speeding up delivery of fashion product to his stores. Her absolute power over a single industry reminded me of Mike Ovitz when he did, in fact, rule Hollywood and all deals seemed to somehow pass through his desk. Or of Frank Rich when he was the Head Drama Critic for the New York Times and his review alone determined a new production’s fate — advance sales, other critical responses and celebrity names on the marquee be damned.
The movie documented her work to bring out the September, 2007 issue of the magazine. That issue:
was 840 pages long and weighed in at just under five pounds. Now safely identified as a relic from another era (oh how long ago that was), this particular edition of Vogue turned out to be the single largest issue of a magazine that has ever been published.
He wrote about his experience on The Huffington Post, What I Learned From Anna Wintour, and summarized what he learned from watching Wintour up close. Here are his four lessons about management that he learned from Anna Wintour:
Lesson 1: Keep Meetings Short
In Anna’s world, meetings often start a few minutes before they’re scheduled. If you arrive five minutes late, chances are you’ll have missed it entirely.
Lesson 2: Trust Your Instincts
It’s quintessential Anna Wintour: knowing what she wants, making clear decisions and moving on. I once asked her about her creative process and she answered with some frustration. “I can’t explain it,” she said, “I just do it.” To me it was all very telling — here is someone who knows that her gut instincts have gotten her to where she is, so she listens to them, trusts them and isn’t afraid to put them on the line.
Lesson 3: Surround Yourself with Great Talent
The September Issue is really a film about Anna Wintour’s relationship with long time Vogue Creative Director Grace Coddington. The two of them have been working together for two decades and the extraordinary symbiosis between them has left an indelible mark on the fashion industry. But if Anna’s collaboration with Grace is remarkable (and it is), equally impressive is the astounding level of talent represented by all of the other senior members of her team at Vogue. Seriously, filming The September Issue was like walking into the clubhouse of the 1927 Yankees… The lesson is clear — Anna Wintour knows that you’re only as good as the people who work for you, that bad leaders are threatened by strong team members, and that success comes from surrounding yourself with the most talented people you can find.
Lesson 4: Don’t Look Back
If I had to choose a statement that summarizes Anna’s management style, it might come from her own comment at the end of The September Issue, when she says, “Fashion’s not about looking back. It’s always about looking forward.” Or it might come from Karl Lagerfeld whose favorite expression, Anna once told me, is “On to the next.”
This article is worth reading in full.
I commend Dutta and Folden on the scope and depth of their understanding of how to locate, obtain, and then manage high value outsourcing opportunities as well as their skill in organizing and then presenting their material within twelve chapters, any one of which is worth much more than the cost of the entire book.
They respond to questions such as these:
1. How to create and then strengthen the foundation for “Big Deals” based on “some essential concepts of the human element of management”?
2. How to locate and evaluate prospective “Big Deals” that offer high value?
3. How to use a Third-Party Advisor (TPA) to achieve strategic objectives?
4. How to influence the process by “leading from the rear”?
5. How to use “the art of pricing” to structure deals appropriately?
6. How to formulate a contract to best advantage?
7. How to close on a “Big Deal”?
8. How to manage transitions and changes by following the right “stepping stones”?
9. How to manage integrated programs effectively?
10. What are the most frequent mistakes made when attempting to clinch a “Big Deal”?
11. How to avoid or overcome those mistakes?
After carefully identifying the “what,” Dutta and Folden focus almost entirely on explaining how to achieve the desired objectives. They offer evidence-driven insights and recommendations, based on a wealth of real-world experience with research, due diligence, all phases of negotiation, and then program leadership and management once a “Big Deal” has been consummated. I again suggest that much (most?) of the information and advice provided in this book will be helpful to those involved in competitive deal making, whatever the size, nature, and context of the given deal may be.