Chris Zook’s “Ten Key Questions for Management”

In the Updated Edition of Profit from the Core published by Harvard Business Press (2010) and written with James Allen, Chris Zook provides updated key examples while adding new ones and renders “the lessons learned in a way that management teams can use can use as a tool to reflect on the way forward in today’s economy.” In the final chapter, he poses ten questions that he and Allen believe management teams should periodically ask themselves about their companies and at the start if every review of their basic growth strategy.

1. What is the most rightly defined profitable core of our business, and is it gaining or losing strength?

2. What defines the boundaries of the business that we are competing for, and where are those boundaries going to shift in the future?

3. Are there new competitors currently at the fringe of our business that pose potential longer-term threats to the core?

4. Are we certain that we are achieving the full strategic and operating potential of our core business, the “hidden value” of our core?

5. What is the full set of potential adjacencies to our core business and possible adjacency moves (single or multiple moves)? Are we looking at these in a planned, logical sequence or piecemeal?

6. What is our point of view on the future of our industry? As a team, do we have consensus? How is this point if view shaping our adjacency strategy and point of arrival?

7. Should major new growth initiatives be pursued inside, next to, or outside the core? How should we decide?

8. Is industry turbulence changing the fundamental source of future competitive advantage? How? Through new models? New segments? New Competitors? And what are we monitoring on a regular basis?

9. Are organizational enablers and inhibitors to growth in the right balance for the needed change?

10. What are the guiding strategic principles that should apply consistently to all of our major strategic and operating decisions?

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Note: Zook’s concept of “core” bears striking resemblance to Jim Collins’ concept of the “Three Circles”,” introduced in Good to Great: (a) What a company can be the best in the world at (and equally important, what it cannot be the best in the world at), (2) What drives the company’s economic engine, and (3) What those in the company care most passionately about.

Zook suggests that an organization’s core business “is that set of products, capabilities, customers, channels, and geographies that defines the essence of what the company is or aspires to be to achieve its growth mission — that is, to grow its revenue sustainably and profitably.”

Know When to Back Down From a Challenge

John Baldoni

Here is an excerpt from an article written by John Baldoni for the Harvard Business blog. To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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You don’t get medals for common sense — but perhaps you should get a pat on the back.

Edwin van Calker, driver on the Dutch four-man bobsled team, told his coach that he would not pilot the bobsled down the icy, treacherous track at Whistler Sliding Centre at the Vancouver Olympic Games. His coach Tom de la Hunty said, “I’ve never seen someone get to a major event and not compete because they’re scared. You keep your inner fears to yourself and do it.”

Not van Calker. He had crashed on the track during the two-man bobsled competition and did not think he could safely pilot the much heavier four-man sled. And he didn’t blame the track, which has seen multiple crashes and the death of a Ukrainian luger at the start of the Games. “[J]ust my lack of confidence at the moment.”

Perhaps there is a lesson for leaders in van Calker’s admission. The mettle of a leader is tested by adversity; history lauds those leaders who take on the odds and win. But savvy leaders are those who also know when to say no. Unfortunately, we brand folks like that as quitters, when it may be more correct to say they have the guts to know when they’re licked.

So how do you evaluate whether you should take on that challenge, or back down? Here are some thoughts.

Know the odds. Assess what you are up against. You can often quantify a challenge through the metrics you employ to manage your business. Weigh the costs of going forward against the costs of holding back. Try not to undercount the costs on either side. Remember, this type of equation is often used to justify mergers and acquisitions, where two businesses come together to avoid competition that will tear them apart. Yet most mergers end in failure.

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To read the complete article, check out other articles and resources, and/or sign up for a free subscription to Harvard Business Daily Alerts, please visit dailyalert@email.harvardbusiness.org.

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John Baldoni is a leadership consultant, coach, and speaker. He is the author of eight books, including Lead Your Boss: The Subtle Art of Managing Up. See his archived blog at http://blogs.hbr.org/baldoni.

And, yet – in the midst of hard and honest truths, we all need to be encouraged

Honored and not diminished. That’s how we all want to feel.
James M. Kouzes & Barry Z. Pozner, Encouraging the Heart:  A Leaders Guide to Rewarding and Encouraging Others

discourage: verb. To deprive of confidence, hope, or spirit.
encourage:  verb. To inspire with hope, courage, or confidence; hearten.

discourage: dishearten.
encourage: hearten.

I don’t remember the source, but years ago, I heard an interview with a laid off auto worker.  His plant was being shut down. He said something like this:  “I did everything right.  I worked hard.  I never missed a day of work.  I was promoted.  I did what they told me to do.  And now…,” and then he trailed off.

He sounded…  disheartened.

There really are forces beyond the control of many individual workers.  And of all the things I sense about today’s work environment, fear is seemingly omnipresent, and growing greater.  People are worried about their jobs, their careers, their futures, their mortgages, their children’s future…  It is a tough time.

So, I thought about the terrific book I read and first presented years ago, Encouraging the Heart.  But I did not just think of the content, though it is excellent.  I thought of the title itself.  I thought of the need of the hour – and I think that need is the need for encouragement.  People are discouraged, disheartened.  And they need to be heartened.

Whatever else a leader brings to his or her workers, encouragement needs to be at the top of the list.

Do you lead people?  Are you encouraging them – or discouraging them?

Here’s how I worded it in my introduction for my presentation for Encouraging the Heart:

we all need to be encouraged to do our best. Literally — we need to be encouraged; we need to receive encouragement, in order to do our best.

And this much is clear — no leader should ever do any discouraging.  There will be more than enough discouragement coming from other sources…

Shooting the Messenger – Not a good idea (wisdom from Robert Tedlow)

Bob Morris has interviewed Richard Tedlow, the author of Denial: Why Business Leaders Fail to Look Facts in the Face—and What to Do About It, here.  Here is a quote from Tedlow, excerpted from the book in Business Week, Book Excerpt: Denial at Sears:

There appears to be a persistent belief in once-great companies that have lost their way that if you simply avoid speaking the blunt truth, all the problems will just go away. It is almost as if by telling the truth, you are endowing problems with a reality that they would not otherwise have. It is this brand of magical thinking that leads to shooting the messenger.

There is a long history of companies silencing the messengers.  We have stronger and stronger “whistle blower laws,” but companies still find ways to punish, to silence, to “discredit” whistle blowers.  And, yes, there are times that whistle blowers are on a personal vendetta, and want to hurt rather than help.

But not always.

When the warnings are clear, and grow louder, of problems around the bend, that is a pretty time to start listening.

For some reason, I think about Scripture more on the weekends, and if you have never read the book of Amos,  it may be the purest “here is where things are bad, and we need to face up to this problem and do something about it” piece ever written.

In it is Dr. Martin Luther King’s most well-known quote from Scripture:  “But let justice roll on like a river, righteousness like a never-failing stream!” (Amos 5:24).  But the short, entire book is quite an “it’s time to get honest, and face the music, and make some changes” piece of writing.

So, this is a simple reminder – sometimes we need to hear painful truth.  And when we choose not to listen, we are not being very smart.