Monday, February 6, 2012
Three Types of People to Fire Immediately
Three Types of People to Fire Immediately
Want a more innovative company? Get rid of these folks. Today
By G. Michael Maddock and Raphael Louis Vitón
The Innovation Engine November 08, 2011, 2:28 PM EST
“I wanted a happy culture. So I fired all the unhappy people.”
—A very successful CEO (who asked not to be named)
We (your authors) teach our children to work hard and never, ever give up. We teach them to be grateful, to be full of wonder, to expect good things to happen, and to search for literal and figurative treasure on every beach, in every room, and in every person.
But some day, when the treasure hunt is over, we’ll also teach them to fire people. Why? After working with the most inventive people in the world for two decades, we’ve discovered the value of a certain item in the leadership toolbox: the pink slip.
Show of hands: How many of you out there in Innovationland have gotten the “what took you so long?” question from your staff when you finally said goodbye to a teammate who was seemingly always part of problems instead of solutions?
We imagine a whole bunch of hands. (Yep, ours went up, too.)
These people—and we’re going to talk about three specific types in a minute—passive-aggressively block innovation from happening and will suck the energy out of any organization.
When confronted with any of the following three people—and you have found it impossible to change their ways, say goodbye.
1. The Victims
“Can you believe what they want us to do now? And of course we have no time to do it. I don’t get paid enough for this. The boss is clueless.”
Victims are people who see problems as occasions for persecution rather than challenges to overcome. We all play the role of victim occasionally, but for some, it has turned into a way of life. These people feel persecuted by humans, processes, and inanimate objects with equal ease—they almost seem to enjoy it. They are often angry, usually annoyed, and almost always complaining. Just when you think everything is humming along perfectly, they find something, anything, to complain about. At Halloween parties, they’re Eeyore, the gloomy, pessimistic donkey from the Winnie the Pooh stories—regardless of the costume they choose.
Victims aren’t looking for opportunities; they are looking for problems. Victims can’t innovate.
So if you want an innovative team, you simply can’t include victims. Fire the victims. (Note to the HR department: Victims are also the most likely to feel the company has maliciously terminated them regardless of cause. They will often go looking for someone—anyone—who will agree that you have treated them unjustly. Lawyers are often left to play this role. So have your documentation in order before you let victims go, because chances are you will hear from their attorneys.
2. The Nonbelievers
“Why should we work so hard on this? Even if we come up with a good idea, the boss will probably kill it. If she doesn’t, the market will. I’ve seen this a hundred times before.”
We love the Henry Ford quote: “If you think you can or think you cannot, you are correct.” The difference between the winning team that makes industry-changing innovation happen and the losing one that comes up short is a lack of willpower. Said differently, the winners really believed they could do it, while the losers doubted it was possible.
In our experience, we’ve found the link between believing and succeeding incredibly powerful and real. Great leaders understand this. They find and promote believers within their organizations. They also understand the cancerous effect that nonbelievers have on a team and will cut them out of the organization quickly and without regret.
If you are a leader who says your mission is to innovate, but you have a staff that houses nonbelievers, you are either a lousy leader or in denial. Which is it? You deserve the staff you get. Terminate the nonbelievers.
3. The Know-It-Alls
“You people obviously don’t understand the business we are in. The regulations will not allow an idea like this, and our stakeholders won’t embrace it. Don’t even get me started on our IT infrastructure’s inability to support it. And then there is the problem of ….”
The best innovators are learners, not knowers. The same can be said about innovative cultures; they are learning cultures. The leaders who have built these cultures, either through intuition or experience, know that in order to discover, they must eagerly seek out things they don’t understand and jump right into the deep end of the pool. They must fail fearlessly and quickly and then learn and share their lessons with the team. When they behave this way, they empower others around them to follow suit—and presto, a culture of discovery is born and nurtured.
In school, the one who knows the most gets the best grades, goes to the best college, and gets the best salary. On the job, the person who can figure things out the quickest is often celebrated. And unfortunately, it is often this smartest, most-seasoned employee who eventually becomes expert in using his or her knowledge to explain why things are impossible rather than possible.
This employee should be challenged, retrained, and compensated for failing forward. But if this person’s habits are too deeply ingrained to change, you must let him or her go. Otherwise, this individual will unwittingly keep your team from seeing opportunity right under your noses. The folks at Blockbuster didn’t see Netflix (NFLX)‘s ascendancy. The encyclopedia companies didn’t see Google (GOOG) coming. But the problem of expert blindness existed well before the Internet.
Two of our favorites from rinkworks.com: “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” —Western Union internal memo, 1876.
And “The wireless music box has no imaginable commercial value. Who would pay for a message sent to nobody in particular?” —David Sarnoff’s associates in response to his urgings for investment in the radio in the 1920s.
At one point in his career, Thomas A. Edison had dozens of inventors working for him at the same time. He charged each with the task of failing forward and sharing the learning from each discovery. All of them needed to believe that they were part of something big. You want the same sort of people.
You don’t want the victims, nonbelievers, or know-it-alls. It is up to you to make sure they take their anti-innovative outlooks elsewhere.
Maddock is chief executive, and Vitón is president, of Maddock Douglas, an innovation consultancy that specializes in inventing and launching new products, services, and businesses. Maddock and Viton are the authors of Free the Idea Monkey (ISB Publishing, 2012), and Maddock is the author of Brand New: Solving the Innovation Paradox—How Great Brands Invent and Launch New Products, Services, and Business Models (Wiley, 2011).
http://www.businessweek.com/printer/management/three-types-of-people-to-fire-immediately-11082011.html
How the Mighty Fall: A Primer on the Warning Signs
How the Mighty Fall: A Primer on the Warning Signs
The author of Good to Great on how to spot the subtle signs that your successful company is actually on course to sputter—and how to reverse the slide before it's too late
By Jim Collins
In Autumn 2004, I received a phone call from Frances Hesselbein, founding president of the Leader to Leader Institute.
"The Conference Board and the Leader to Leader Institute would like you to come to West Point to lead a discussion with some great students," she said.
"And who are the students?" I asked, envisioning perhaps a group of cadets.
"Twelve U.S. Army generals, 12 CEOs, and 12 social sector leaders," explained Hesselbein. "They'll be sitting in groups of six, two from each sector—military, business, social—and they'll really want to dialogue about the topic."
"And what's the topic?"
"Oh, it's a good one. I think you'll really like it." She paused. "America."
America? What could I possibly teach this esteemed group about America? Then I remembered what one of my mentors, Bill Lazier, told me about effective teaching: Don't try to come up with the right answers; focus on coming up with good questions.
I pondered and puzzled and finally settled upon the question: Is America renewing its greatness, or is America dangerously on the cusp of falling from great to good? While I intended the question to be rhetorical (I believe America carries a responsibility to continuously renew itself, and it has met that responsibility throughout its history), the West Point gathering nonetheless erupted into an intense debate. Half of the participants argued that America stands as strong as ever, while the other half contended that America teeters on the edge of decline.
History shows, repeatedly, that the mighty can fall. The Egyptian Old Kingdom, the Chou Dynasty, the Hittite Empire—all fell. Athens fell. Rome fell. Even Britain, which stood a century before as a global superpower, saw its position erode. Is that the U.S.'s fate? Or will America always find a way to meet Lincoln's challenge to be the last best hope of Earth?
At a break, the chief executive of one of America's most successful companies pulled me aside. "I've been thinking about your question in the context of my company all morning," he said. "We've had tremendous success in recent years, and I worry about that. So what I want to know is: How would you know?"
"What do you mean?" I asked.
"When you are at the top of the world, the most powerful nation on Earth, the most successful company in your industry, the best player in your game, your very power and success might cover up the fact that you're already on the path of decline." That question—how would you know?—captured my imagination and became part of the inspiration for this book.
THE SILENT CREEP OF DOOM
At our research lab, we'd already been discussing the possibility of a project on corporate decline, in part because some of the great companies we'd profiled in the books Good to Great and Built to Last had subsequently lost their positions of prominence. On one level this fact didn't cause much angst; just because a company falls doesn't invalidate what we can learn by studying that company when it was at its historical best.
But on another level I found myself becoming increasingly curious: How do the mighty fall? If some of the greatest companies in history can go from iconic to irrelevant, what might we learn by studying their demise, and how can others avoid their fate? I returned from West Point inspired to turn idle curiosity into an active quest. Might it be possible to detect decline early and reverse course—or even better, might we be able to practice preventive medicine?
I've come to see institutional decline like a disease: harder to detect but easier to cure in the early stages; easier to detect but harder to cure in the later stages. An institution can look strong on the outside but already be sick on the inside, dangerously on the cusp of a precipitous fall.
Consider the rise and fall of one of the most storied companies in U.S. business history.
In the wake of the 1906 San Francisco earthquake, A.P. Giannini, founder of the fledgling Bank of Italy, found himself at odds with other bankers who wanted to impose up to a six-month moratorium on lending. His response: putting a plank across two barrels right in the middle of a busy pier and opening for business. "We are going to rebuild San Francisco," he proclaimed.
Giannini lent to the little guy when the little guy needed it most, and his bank, later renamed Bank of America (BAC), gained momentum—little guy by little guy, loan by loan, deposit by deposit, branch by branch, expanding ever outward from San Francisco. By 1945 it had surpassed Chase National Bank as the largest commercial bank in the world, and by the late 1970s it had grown to more than a thousand branches in more than a hundred countries. Along the way it became admired not just for its size but also for its quality of management. (Note of clarification: In 1998, NationsBank acquired Bank of America and took the name; the Bank of America described here is a different company than NationsBank.)
Entering the 1980s, Bank of America held a revered position and was widely regarded as one of the greatest companies in the world. Within eight years it would post some of the biggest losses in U.S. banking history, rattle the financial markets to the point of briefly depressing the U.S. dollar, watch its cumulative stock performance fall more than 80% behind the general stock market, face a serious takeover threat from a rival California bank, cut its dividend for the first time in 53 years, sell off its corporate headquarters to help meet capital requirements, see the last Giannini family board member resign in outrage, oust its chief executive, bring a former CEO out of retirement to save the company, and endure a barrage of critical articles in the business press, with titles such as "The Incredible Shrinking Bank" and "Better Stewards (Corporate and Otherwise) Went Down on the Titanic." Anyone predicting such a fall as the decade began would have been viewed as a pessimistic outlier.
If a company as powerful and well-positioned as Bank of America in the late 1970s could fall so far, so hard, so quickly, then any company can. If companies such as Motorola (MOT), Circuit City (CCTYQ), and Fannie Mae (FNM)—icons that once served as paragons of excellence—can succumb to the forces of gravity, then no one is immune. If companies such as Zenith and A&P, once the unquestioned champions in their fields, can plummet from great to irrelevant, then we should be wary about our own success.
Every institution is vulnerable, no matter how great. There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall, and most eventually do.
But all is not gloom. By understanding the five stages of decline we uncovered in our research for How the Mighty Fall, leaders can substantially increase the odds of reversing decline before it is too late—or even better, stave off decline in the first place. Decline can be avoided. The seeds of decline can be detected early. And decline can be reversed (as we've seen with notable cases such as IBM (IBM), Hewlett-Packard (HPQ), Merck (MRK), and Nucor (NUE)). The mighty can fall, but they can often rise again.
FIVE STAGES OF DECLINE
I feel a bit like a snake that swallowed two watermelons at once. I'd started this project as a diversion to engage my pen while completing the research for my next full-sized book on what it takes to endure and prevail when the world around you spins out of control (based on a six-year research project with my colleague Morten Hansen). But after my West Point visit, the question of how the mighty fall evolved into a topic of passionate curiosity channeled into a research effort that led to this small book.
In one sense, my research colleagues and I have been studying failure and mediocrity for years. Our research methodology relies on contrast, studying those companies that became great in contrast to those that did not and asking: "What's different?" But we had not explicitly delved into the question: Why do some great companies fall, and how far can a company fall and still come back? I began to joke with my colleagues: "We're turning to the dark side."
We had a substantial amount of data collected from prior research studies, consisting of more than 6,000 years of combined corporate history. From this data set, we identified a set of once-great companies that fell and constructed a set of "success contrasts" that had risen in the same industries during the era when our primary study companies declined. Our principal effort focused on a two-part question: What happened leading up to the point at which decline became visible, and what did the company do once it began to fall?
Our comparative and historical analysis yielded a descriptive model of how the mighty fall that consists of five stages that proceed in sequence. And here's the really scary part: You do not visibly fall until Stage 4! Companies can be well into Stage 3 decline and still look and feel great, yet be right on the cusp of a huge fall. Decline can sneak up on you, and—seemingly all of a sudden—you're in big trouble.
Even so, I ultimately see this as a work of well-founded hope. With a road map to decline in hand, institutions heading downhill might be able to apply the brakes early and reverse course. We've found companies that recovered—in some cases, coming back even stronger—after having crashed down into the depths of Stage 4. Our research indicates that organizational decline is largely self-inflicted, and recovery largely within our own control. So long as you never fall all the way to Stage 5, you can rebuild.
While a full exploration of the five stages is beyond the scope of this excerpt, here is a brief summary:
STAGE 1: HUBRIS BORN OF SUCCESS
Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success ("We're successful because we do these specific things") replaces penetrating understanding and insight ("We're successful because we understand why we do these specific things and under what conditions they would no longer work"), decline will very likely follow. Luck and chance play a role in many successful outcomes, and those who fail to acknowledge the role luck may have played in their success—and thereby overestimate their own merit and capabilities—have succumbed to hubris.
The best leaders we've studied never presume they've reached ultimate understanding of all the factors that brought them success. For one thing, they retain a somewhat irrational fear that perhaps their success stems in large part from fortuitous circumstance. Suppose you discount your own success ("We might have been just really lucky/were in the right place at the right time/have been living off momentum/have been operating without serious competition") and thereby worry incessantly about how to make yourself stronger and better-positioned for the day your good luck runs out. What's the downside if you're wrong? Minimal: If you're wrong, you'll just be that much stronger by virtue of your disciplined approach. But suppose instead you succumb to hubris and attribute success to your own superior qualities ("We deserve success because we're so good/so smart/so innovative/so amazing"). What's the downside if you're wrong? Significant. You just might find yourself surprised and unprepared when you wake up to discover your vulnerabilities too late.
STAGE 2: UNDISCIPLINED PURSUIT OF MORE
Hubris from Stage 1 ("We're so great, we can do anything!") leads right to Stage 2, the Undisciplined Pursuit of More—more scale, more growth, more acclaim, more of whatever those in power see as "success." Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence—or both. When an organization grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall. Although complacency and resistance to change remain dangers to any successful enterprise, overreaching better captures how the mighty fall.
Discontinuous leaps into areas in which you have no burning passion is undisciplined. Taking action inconsistent with your core values is undisciplined. Investing heavily in new arenas where you cannot attain distinctive capability, better than your competitors, is undisciplined. Launching headlong into activities that do not fit with your economic or resource engine is undisciplined. Addiction to scale is undisciplined. To neglect your core business while you leap after exciting new adventures is undisciplined. To use the organization primarily as a vehicle to increase your own personal success—more wealth, more fame, more power—at the expense of its long-term success is undisciplined. To compromise your values or lose sight of your core purpose in pursuit of growth and expansion is undisciplined.
STAGE 3: DENIAL OF RISK AND PERIL
As companies move into Stage 3, internal warning signs begin to mount, yet 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." In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether. When those in power begin to imperil the enterprise by taking outsize risks and acting in a way that denies the consequences of those risks, they are headed straight for Stage 4.
Bill Gore, founder of W.L. Gore & Associates, articulated a helpful concept for decision-making and risk-taking, what he called the "waterline" principle. Think of being on a ship, and imagine that any decision gone bad will blow a hole in the side of the ship. If you blow a hole above the waterline (where the ship won't take on water and possibly sink), you can patch the hole, learn from the experience, and sail on. But if you blow a hole below the waterline, you can find yourself facing gushers of water pouring in, pulling you toward the ocean floor. And if it's a big enough hole, you might go down really fast, just like some of the financial firm catastrophes of 2008. To be clear, great enterprises do make big bets, but they avoid big bets that could blow holes below the waterline.
STAGE 4: GRASPING FOR SALVATION
The cumulative peril and/or risks gone bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is: How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about greatness in the first place? Those who grasp for salvation have fallen into Stage 4. Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game-changing" acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.
When we find ourselves in trouble, when we find ourselves on the cusp of falling, our survival instinct and our fear can prompt lurching—reactive behavior absolutely contrary to survival. The very moment when we need to take calm, deliberate action, we run the risk of doing the exact opposite and bringing about the very outcomes we most fear. By grasping about in fearful, frantic reaction, late Stage 4 companies accelerate their own demise. Of course, their leaders can later claim: "But look at everything we did. We changed everything. We tried everything we could think of. We fired every shot we had, and we still fell. You can't blame us for not trying." They fail to see that leaders atop companies in the late stages of decline need to get back to a calm, clear-headed, and focused approach. If you want to reverse decline, be rigorous about what not to do.
STAGE 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. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases the company's leader just sells out; in other cases the institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.
The point of the struggle is not just to survive, but to build an enterprise that makes such a distinctive impact on the world it touches (and does so with such superior performance) that it would leave a gaping hole—a hole that could not be easily filled by any other institution—if it ceased to exist. To accomplish this requires leaders who retain faith that they can find a way to prevail in pursuit of a cause larger than mere survival (and larger than themselves) while also maintaining the stoic will needed to take whatever actions must be taken, however excruciating, for the sake of that cause.
WELL-FOUNDED HOPE
When Anne Mulcahy became chief executive of Xerox (XRX) in 2001, she inherited a company mired in Stage 4. With Xerox's debt-to-equity ratio above 900%, Moody's (MCO) rated its bonds as junk. With $19 billion in debt and only $100 million in cash, Mulcahy described the situation as "terrifying."
Mulcahy had never planned or expected to become CEO, describing her ascension as a total surprise. The consummate insider, she'd worked for nearly a quarter-century at Xerox, never drawing outside attention. For Mulcahy, it was all about Xerox, not about her. In fact, we found only four feature articles about Mulcahy during her first three years as CEO, a surprisingly small number given how few women become CEOs of storied companies.
Some observers questioned whether this insider, this unknown team player who had Xerox DNA baked into her chromosomes, would have the ferocious will needed to save the company. They needn't have worried. Their first clue might have come from reading her favorite book, Caroline Alexander's The Endurance, which chronicles how, against all odds, adventurer Ernest Shackleton rescued his men after their ship splintered into thousands of pieces as Antarctic ice crushed in around it in 1916. Drawing inspiration from Shackleton, Mulcahy didn't take a weekend off for two years. She shut down a number of businesses, including the inkjet-printer unit she'd championed earlier in her career, and cut $2.5 billion out of Xerox's cost structure. Not that she found these decisions easy—"I don't think I want them to get easy," she later reflected—but they were necessary to stave off utter catastrophe. During its darkest days, Xerox faced the very real threat of bankruptcy, yet Mulcahy rebuffed with steely silence her advisers' repeated suggestions that she consider Chapter 11. She also held fast against a torrent of advice from outsiders to cut research and development to save the company, noting that a return to greatness depended on both tough cost-cutting and long-term investment. She actually increased R&D as a percentage of sales during that bleak period.
For 2000 and 2001, Xerox posted a total of nearly $367 million in losses. By 2006, Xerox posted profits in excess of $1 billion and sported a much stronger balance sheet. And in 2008, Chief Executive magazine selected Mulcahy as CEO of the Year. At the time of this writing in 2008, Xerox's transition has been going strong for seven years—no guarantee, of course, that it will continue to climb, but an impressive recovery from the early 2000s.
Xerox. HP. Nucor. IBM. Merck. Texas Instruments (TXN). Pitney Bowes (PBI). Nordstrom (JWN). Disney (DIS). Boeing (BA). What do these companies have in common? Each took at least one tremendous fall at some point in its history and recovered. Sometimes the tumble came early, when they were small and vulnerable, and sometimes the tumble came when they were large, established enterprises. But in every case, leaders emerged who broke the trajectory of decline and simply refused to give up on the idea of not only survival but ultimate triumph, despite the most extreme odds.
The signature of the truly great vs. the merely successful is not the absence of difficulty. It's the ability to come back from setbacks, even cataclysmic catastrophes, stronger than before. Great nations can decline and recover. Great companies can fall and recover. Great social institutions can fall and recover. And great individuals can fall and recover. As long as you never get entirely knocked out of the game, there remains hope.
We all need beacons of light as we struggle with the inevitable setbacks of life and work. For me, that light has often come from studying Winston Churchill. In the early 1930s, Churchill's career had descended into what biographer Virginia Cowles called "a quagmire from which there seemed to be no rescue."
At the end of Volume I of his series, The Last Lion, William Manchester captures Churchill's position in 1932. Lady Astor visited with Joseph Stalin, who quizzed her on the political landscape in Britain. Astor prattled on about the powerful, the up-and-coming, naming Neville Chamberlain as the star.
"What about Churchill?" asked Stalin.
"Churchill?" Astor's eyes widened. Then with a disdainful wrinkle of her nose, "Oh, he's finished."
Not only would Churchill redeem himself by giving voice to Britain's resolve to stand against the Axis powers during World War II, he also went on to win the Nobel Prize in Literature, return again as Prime Minister at age 77, be knighted by the Queen, and sear into the Cold War lexicon the term "Iron Curtain" in his prescient warning about Soviet aggression. Churchill's simple mantra: Never give in—never, never, never, never.
Never give in. Be willing to kill failed business ideas, even to shutter big operations you've been in for a long time, but never give up on the idea of building a great company. Be willing to evolve into an entirely different portfolio of activities, even to the point of zero overlap with what you do today, but never give up on the principles that define your culture. Be willing to embrace loss, to endure pain, to temporarily lose freedoms, but never give up faith in your ability to prevail. Be willing to form alliances with former adversaries, to accept necessary compromise, but never—ever—give up on your core values.
The path out of darkness begins with those exasperatingly persistent individuals who are constitutionally incapable of capitulation. It's one thing to suffer a staggering defeat—as will likely happen to every enduring business and social enterprise at some point in its history—and entirely another to give up on the values and aspirations that make the protracted struggle worthwhile. Failure is not so much a physical state as a state of mind; success is falling down—and getting up one more time—without end.
From the book, How the Mighty Fall and Why Some Companies Never Give In By Jim Collins, © 2009 By Jim Collins
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http://www.businessweek.com/magazine/content/09_21/b4132026786379.htm
The author of Good to Great on how to spot the subtle signs that your successful company is actually on course to sputter—and how to reverse the slide before it's too late
By Jim Collins
In Autumn 2004, I received a phone call from Frances Hesselbein, founding president of the Leader to Leader Institute.
"The Conference Board and the Leader to Leader Institute would like you to come to West Point to lead a discussion with some great students," she said.
"And who are the students?" I asked, envisioning perhaps a group of cadets.
"Twelve U.S. Army generals, 12 CEOs, and 12 social sector leaders," explained Hesselbein. "They'll be sitting in groups of six, two from each sector—military, business, social—and they'll really want to dialogue about the topic."
"And what's the topic?"
"Oh, it's a good one. I think you'll really like it." She paused. "America."
America? What could I possibly teach this esteemed group about America? Then I remembered what one of my mentors, Bill Lazier, told me about effective teaching: Don't try to come up with the right answers; focus on coming up with good questions.
I pondered and puzzled and finally settled upon the question: Is America renewing its greatness, or is America dangerously on the cusp of falling from great to good? While I intended the question to be rhetorical (I believe America carries a responsibility to continuously renew itself, and it has met that responsibility throughout its history), the West Point gathering nonetheless erupted into an intense debate. Half of the participants argued that America stands as strong as ever, while the other half contended that America teeters on the edge of decline.
History shows, repeatedly, that the mighty can fall. The Egyptian Old Kingdom, the Chou Dynasty, the Hittite Empire—all fell. Athens fell. Rome fell. Even Britain, which stood a century before as a global superpower, saw its position erode. Is that the U.S.'s fate? Or will America always find a way to meet Lincoln's challenge to be the last best hope of Earth?
At a break, the chief executive of one of America's most successful companies pulled me aside. "I've been thinking about your question in the context of my company all morning," he said. "We've had tremendous success in recent years, and I worry about that. So what I want to know is: How would you know?"
"What do you mean?" I asked.
"When you are at the top of the world, the most powerful nation on Earth, the most successful company in your industry, the best player in your game, your very power and success might cover up the fact that you're already on the path of decline." That question—how would you know?—captured my imagination and became part of the inspiration for this book.
THE SILENT CREEP OF DOOM
At our research lab, we'd already been discussing the possibility of a project on corporate decline, in part because some of the great companies we'd profiled in the books Good to Great and Built to Last had subsequently lost their positions of prominence. On one level this fact didn't cause much angst; just because a company falls doesn't invalidate what we can learn by studying that company when it was at its historical best.
But on another level I found myself becoming increasingly curious: How do the mighty fall? If some of the greatest companies in history can go from iconic to irrelevant, what might we learn by studying their demise, and how can others avoid their fate? I returned from West Point inspired to turn idle curiosity into an active quest. Might it be possible to detect decline early and reverse course—or even better, might we be able to practice preventive medicine?
I've come to see institutional decline like a disease: harder to detect but easier to cure in the early stages; easier to detect but harder to cure in the later stages. An institution can look strong on the outside but already be sick on the inside, dangerously on the cusp of a precipitous fall.
Consider the rise and fall of one of the most storied companies in U.S. business history.
In the wake of the 1906 San Francisco earthquake, A.P. Giannini, founder of the fledgling Bank of Italy, found himself at odds with other bankers who wanted to impose up to a six-month moratorium on lending. His response: putting a plank across two barrels right in the middle of a busy pier and opening for business. "We are going to rebuild San Francisco," he proclaimed.
Giannini lent to the little guy when the little guy needed it most, and his bank, later renamed Bank of America (BAC), gained momentum—little guy by little guy, loan by loan, deposit by deposit, branch by branch, expanding ever outward from San Francisco. By 1945 it had surpassed Chase National Bank as the largest commercial bank in the world, and by the late 1970s it had grown to more than a thousand branches in more than a hundred countries. Along the way it became admired not just for its size but also for its quality of management. (Note of clarification: In 1998, NationsBank acquired Bank of America and took the name; the Bank of America described here is a different company than NationsBank.)
Entering the 1980s, Bank of America held a revered position and was widely regarded as one of the greatest companies in the world. Within eight years it would post some of the biggest losses in U.S. banking history, rattle the financial markets to the point of briefly depressing the U.S. dollar, watch its cumulative stock performance fall more than 80% behind the general stock market, face a serious takeover threat from a rival California bank, cut its dividend for the first time in 53 years, sell off its corporate headquarters to help meet capital requirements, see the last Giannini family board member resign in outrage, oust its chief executive, bring a former CEO out of retirement to save the company, and endure a barrage of critical articles in the business press, with titles such as "The Incredible Shrinking Bank" and "Better Stewards (Corporate and Otherwise) Went Down on the Titanic." Anyone predicting such a fall as the decade began would have been viewed as a pessimistic outlier.
If a company as powerful and well-positioned as Bank of America in the late 1970s could fall so far, so hard, so quickly, then any company can. If companies such as Motorola (MOT), Circuit City (CCTYQ), and Fannie Mae (FNM)—icons that once served as paragons of excellence—can succumb to the forces of gravity, then no one is immune. If companies such as Zenith and A&P, once the unquestioned champions in their fields, can plummet from great to irrelevant, then we should be wary about our own success.
Every institution is vulnerable, no matter how great. There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall, and most eventually do.
But all is not gloom. By understanding the five stages of decline we uncovered in our research for How the Mighty Fall, leaders can substantially increase the odds of reversing decline before it is too late—or even better, stave off decline in the first place. Decline can be avoided. The seeds of decline can be detected early. And decline can be reversed (as we've seen with notable cases such as IBM (IBM), Hewlett-Packard (HPQ), Merck (MRK), and Nucor (NUE)). The mighty can fall, but they can often rise again.
FIVE STAGES OF DECLINE
I feel a bit like a snake that swallowed two watermelons at once. I'd started this project as a diversion to engage my pen while completing the research for my next full-sized book on what it takes to endure and prevail when the world around you spins out of control (based on a six-year research project with my colleague Morten Hansen). But after my West Point visit, the question of how the mighty fall evolved into a topic of passionate curiosity channeled into a research effort that led to this small book.
In one sense, my research colleagues and I have been studying failure and mediocrity for years. Our research methodology relies on contrast, studying those companies that became great in contrast to those that did not and asking: "What's different?" But we had not explicitly delved into the question: Why do some great companies fall, and how far can a company fall and still come back? I began to joke with my colleagues: "We're turning to the dark side."
We had a substantial amount of data collected from prior research studies, consisting of more than 6,000 years of combined corporate history. From this data set, we identified a set of once-great companies that fell and constructed a set of "success contrasts" that had risen in the same industries during the era when our primary study companies declined. Our principal effort focused on a two-part question: What happened leading up to the point at which decline became visible, and what did the company do once it began to fall?
Our comparative and historical analysis yielded a descriptive model of how the mighty fall that consists of five stages that proceed in sequence. And here's the really scary part: You do not visibly fall until Stage 4! Companies can be well into Stage 3 decline and still look and feel great, yet be right on the cusp of a huge fall. Decline can sneak up on you, and—seemingly all of a sudden—you're in big trouble.
Even so, I ultimately see this as a work of well-founded hope. With a road map to decline in hand, institutions heading downhill might be able to apply the brakes early and reverse course. We've found companies that recovered—in some cases, coming back even stronger—after having crashed down into the depths of Stage 4. Our research indicates that organizational decline is largely self-inflicted, and recovery largely within our own control. So long as you never fall all the way to Stage 5, you can rebuild.
While a full exploration of the five stages is beyond the scope of this excerpt, here is a brief summary:
STAGE 1: HUBRIS BORN OF SUCCESS
Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success ("We're successful because we do these specific things") replaces penetrating understanding and insight ("We're successful because we understand why we do these specific things and under what conditions they would no longer work"), decline will very likely follow. Luck and chance play a role in many successful outcomes, and those who fail to acknowledge the role luck may have played in their success—and thereby overestimate their own merit and capabilities—have succumbed to hubris.
The best leaders we've studied never presume they've reached ultimate understanding of all the factors that brought them success. For one thing, they retain a somewhat irrational fear that perhaps their success stems in large part from fortuitous circumstance. Suppose you discount your own success ("We might have been just really lucky/were in the right place at the right time/have been living off momentum/have been operating without serious competition") and thereby worry incessantly about how to make yourself stronger and better-positioned for the day your good luck runs out. What's the downside if you're wrong? Minimal: If you're wrong, you'll just be that much stronger by virtue of your disciplined approach. But suppose instead you succumb to hubris and attribute success to your own superior qualities ("We deserve success because we're so good/so smart/so innovative/so amazing"). What's the downside if you're wrong? Significant. You just might find yourself surprised and unprepared when you wake up to discover your vulnerabilities too late.
STAGE 2: UNDISCIPLINED PURSUIT OF MORE
Hubris from Stage 1 ("We're so great, we can do anything!") leads right to Stage 2, the Undisciplined Pursuit of More—more scale, more growth, more acclaim, more of whatever those in power see as "success." Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence—or both. When an organization grows beyond its ability to fill its key seats with the right people, it has set itself up for a fall. Although complacency and resistance to change remain dangers to any successful enterprise, overreaching better captures how the mighty fall.
Discontinuous leaps into areas in which you have no burning passion is undisciplined. Taking action inconsistent with your core values is undisciplined. Investing heavily in new arenas where you cannot attain distinctive capability, better than your competitors, is undisciplined. Launching headlong into activities that do not fit with your economic or resource engine is undisciplined. Addiction to scale is undisciplined. To neglect your core business while you leap after exciting new adventures is undisciplined. To use the organization primarily as a vehicle to increase your own personal success—more wealth, more fame, more power—at the expense of its long-term success is undisciplined. To compromise your values or lose sight of your core purpose in pursuit of growth and expansion is undisciplined.
STAGE 3: DENIAL OF RISK AND PERIL
As companies move into Stage 3, internal warning signs begin to mount, yet 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." In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility. The vigorous, fact-based dialogue that characterizes high-performance teams dwindles or disappears altogether. When those in power begin to imperil the enterprise by taking outsize risks and acting in a way that denies the consequences of those risks, they are headed straight for Stage 4.
Bill Gore, founder of W.L. Gore & Associates, articulated a helpful concept for decision-making and risk-taking, what he called the "waterline" principle. Think of being on a ship, and imagine that any decision gone bad will blow a hole in the side of the ship. If you blow a hole above the waterline (where the ship won't take on water and possibly sink), you can patch the hole, learn from the experience, and sail on. But if you blow a hole below the waterline, you can find yourself facing gushers of water pouring in, pulling you toward the ocean floor. And if it's a big enough hole, you might go down really fast, just like some of the financial firm catastrophes of 2008. To be clear, great enterprises do make big bets, but they avoid big bets that could blow holes below the waterline.
STAGE 4: GRASPING FOR SALVATION
The cumulative peril and/or risks gone bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is: How does its leadership respond? By lurching for a quick salvation or by getting back to the disciplines that brought about greatness in the first place? Those who grasp for salvation have fallen into Stage 4. Common "saviors" include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution, a hoped-for blockbuster product, a "game-changing" acquisition, or any number of other silver-bullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.
When we find ourselves in trouble, when we find ourselves on the cusp of falling, our survival instinct and our fear can prompt lurching—reactive behavior absolutely contrary to survival. The very moment when we need to take calm, deliberate action, we run the risk of doing the exact opposite and bringing about the very outcomes we most fear. By grasping about in fearful, frantic reaction, late Stage 4 companies accelerate their own demise. Of course, their leaders can later claim: "But look at everything we did. We changed everything. We tried everything we could think of. We fired every shot we had, and we still fell. You can't blame us for not trying." They fail to see that leaders atop companies in the late stages of decline need to get back to a calm, clear-headed, and focused approach. If you want to reverse decline, be rigorous about what not to do.
STAGE 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. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future. In some cases the company's leader just sells out; in other cases the institution atrophies into utter insignificance; and in the most extreme cases the enterprise simply dies outright.
The point of the struggle is not just to survive, but to build an enterprise that makes such a distinctive impact on the world it touches (and does so with such superior performance) that it would leave a gaping hole—a hole that could not be easily filled by any other institution—if it ceased to exist. To accomplish this requires leaders who retain faith that they can find a way to prevail in pursuit of a cause larger than mere survival (and larger than themselves) while also maintaining the stoic will needed to take whatever actions must be taken, however excruciating, for the sake of that cause.
WELL-FOUNDED HOPE
When Anne Mulcahy became chief executive of Xerox (XRX) in 2001, she inherited a company mired in Stage 4. With Xerox's debt-to-equity ratio above 900%, Moody's (MCO) rated its bonds as junk. With $19 billion in debt and only $100 million in cash, Mulcahy described the situation as "terrifying."
Mulcahy had never planned or expected to become CEO, describing her ascension as a total surprise. The consummate insider, she'd worked for nearly a quarter-century at Xerox, never drawing outside attention. For Mulcahy, it was all about Xerox, not about her. In fact, we found only four feature articles about Mulcahy during her first three years as CEO, a surprisingly small number given how few women become CEOs of storied companies.
Some observers questioned whether this insider, this unknown team player who had Xerox DNA baked into her chromosomes, would have the ferocious will needed to save the company. They needn't have worried. Their first clue might have come from reading her favorite book, Caroline Alexander's The Endurance, which chronicles how, against all odds, adventurer Ernest Shackleton rescued his men after their ship splintered into thousands of pieces as Antarctic ice crushed in around it in 1916. Drawing inspiration from Shackleton, Mulcahy didn't take a weekend off for two years. She shut down a number of businesses, including the inkjet-printer unit she'd championed earlier in her career, and cut $2.5 billion out of Xerox's cost structure. Not that she found these decisions easy—"I don't think I want them to get easy," she later reflected—but they were necessary to stave off utter catastrophe. During its darkest days, Xerox faced the very real threat of bankruptcy, yet Mulcahy rebuffed with steely silence her advisers' repeated suggestions that she consider Chapter 11. She also held fast against a torrent of advice from outsiders to cut research and development to save the company, noting that a return to greatness depended on both tough cost-cutting and long-term investment. She actually increased R&D as a percentage of sales during that bleak period.
For 2000 and 2001, Xerox posted a total of nearly $367 million in losses. By 2006, Xerox posted profits in excess of $1 billion and sported a much stronger balance sheet. And in 2008, Chief Executive magazine selected Mulcahy as CEO of the Year. At the time of this writing in 2008, Xerox's transition has been going strong for seven years—no guarantee, of course, that it will continue to climb, but an impressive recovery from the early 2000s.
Xerox. HP. Nucor. IBM. Merck. Texas Instruments (TXN). Pitney Bowes (PBI). Nordstrom (JWN). Disney (DIS). Boeing (BA). What do these companies have in common? Each took at least one tremendous fall at some point in its history and recovered. Sometimes the tumble came early, when they were small and vulnerable, and sometimes the tumble came when they were large, established enterprises. But in every case, leaders emerged who broke the trajectory of decline and simply refused to give up on the idea of not only survival but ultimate triumph, despite the most extreme odds.
The signature of the truly great vs. the merely successful is not the absence of difficulty. It's the ability to come back from setbacks, even cataclysmic catastrophes, stronger than before. Great nations can decline and recover. Great companies can fall and recover. Great social institutions can fall and recover. And great individuals can fall and recover. As long as you never get entirely knocked out of the game, there remains hope.
We all need beacons of light as we struggle with the inevitable setbacks of life and work. For me, that light has often come from studying Winston Churchill. In the early 1930s, Churchill's career had descended into what biographer Virginia Cowles called "a quagmire from which there seemed to be no rescue."
At the end of Volume I of his series, The Last Lion, William Manchester captures Churchill's position in 1932. Lady Astor visited with Joseph Stalin, who quizzed her on the political landscape in Britain. Astor prattled on about the powerful, the up-and-coming, naming Neville Chamberlain as the star.
"What about Churchill?" asked Stalin.
"Churchill?" Astor's eyes widened. Then with a disdainful wrinkle of her nose, "Oh, he's finished."
Not only would Churchill redeem himself by giving voice to Britain's resolve to stand against the Axis powers during World War II, he also went on to win the Nobel Prize in Literature, return again as Prime Minister at age 77, be knighted by the Queen, and sear into the Cold War lexicon the term "Iron Curtain" in his prescient warning about Soviet aggression. Churchill's simple mantra: Never give in—never, never, never, never.
Never give in. Be willing to kill failed business ideas, even to shutter big operations you've been in for a long time, but never give up on the idea of building a great company. Be willing to evolve into an entirely different portfolio of activities, even to the point of zero overlap with what you do today, but never give up on the principles that define your culture. Be willing to embrace loss, to endure pain, to temporarily lose freedoms, but never give up faith in your ability to prevail. Be willing to form alliances with former adversaries, to accept necessary compromise, but never—ever—give up on your core values.
The path out of darkness begins with those exasperatingly persistent individuals who are constitutionally incapable of capitulation. It's one thing to suffer a staggering defeat—as will likely happen to every enduring business and social enterprise at some point in its history—and entirely another to give up on the values and aspirations that make the protracted struggle worthwhile. Failure is not so much a physical state as a state of mind; success is falling down—and getting up one more time—without end.
From the book, How the Mighty Fall and Why Some Companies Never Give In By Jim Collins, © 2009 By Jim Collins
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http://www.businessweek.com/magazine/content/09_21/b4132026786379.htm
Thursday, January 5, 2012
COMMUNICATION - How to Be a Great Communicator
"Nothing can add more power
to your life than concentrating all your energies on a limited set of targets."
—Nido Qubein: is a businessman and motivational speaker
The ability to communicate is a rare and valuable skill.
Most people think "talking" and "communicating" are the same thing. Yet they are very different.
For those who learn to truly communicate, the rewards are great, both financially and personally.
Those rewards are real and well within YOUR grasp right now, regardless of your age, education, background, or job.
Dear Friend,
No matter how strong you are in other areas, if you are a weak communicator, you just can't expect to be successful.
If you can't get your thoughts and ideas across clearly, succinctly, and convincingly to others, how can you expect to advance... in your job, or in your personal life?
Poor communication skills are the reason why so many people never reach the financial and career goals they set for themselves, and why so many people never achieve their full potential.
But for those who can truly communicate, the rewards are tremendous:
Good communicators are able to exercise influence over others. They're able to get more people to like them and respond favorably to their requests.
Good communicators can help others to understand ideas and beliefs important to them.
Good communicators can lift the spirits of others, give them hope, and bring comfort and inspiration.
Good communicators become natural leaders.
It's time for YOU to master
the art and skill of great communication!
We offer a unique audio program by the remarkable and incomparable Nido Qubein titled How to Be a Great Communicator, that will teach you to become a master of this enormously powerful and highly advantageous skill. You'll discover:
How to get people to want to pay attention to you. (There are three surprisingly easy techniques.)
How to listen. (Most of us are so busy planning what we're going to say next, we don't listen.)
How to build charisma. (You may think you have the charisma of a clam, but the seven strategies you'll learn will turn you around 180 degrees.)
How to make an effective speech. (This one session alone could be invaluable because most people don't know how to speak effectively.)
All of this is organized into an impactful program that makes this critical skill easy to learn. As a matter of fact, you will astounded by how quickly you absorb so much immediately-applicable information.
That's because Nido Qubein has mastered the highest level of teaching. He is an extremely successful entrepreneur, business leader, investor, and currently the Dean of High Point University.
How to Be a Great Communicator gives you an extraordinary opportunity to learn a skill few people have. Learning that skill will give you a huge advantage in life and bring you rich rewards, both financial and emotional.
Get a head start on being a better communicator tomorrow, by ordering this transformational program today!
Sincerely,
to your life than concentrating all your energies on a limited set of targets."
—Nido Qubein: is a businessman and motivational speaker
The ability to communicate is a rare and valuable skill.
Most people think "talking" and "communicating" are the same thing. Yet they are very different.
For those who learn to truly communicate, the rewards are great, both financially and personally.
Those rewards are real and well within YOUR grasp right now, regardless of your age, education, background, or job.
Dear Friend,
No matter how strong you are in other areas, if you are a weak communicator, you just can't expect to be successful.
If you can't get your thoughts and ideas across clearly, succinctly, and convincingly to others, how can you expect to advance... in your job, or in your personal life?
Poor communication skills are the reason why so many people never reach the financial and career goals they set for themselves, and why so many people never achieve their full potential.
But for those who can truly communicate, the rewards are tremendous:
Good communicators are able to exercise influence over others. They're able to get more people to like them and respond favorably to their requests.
Good communicators can help others to understand ideas and beliefs important to them.
Good communicators can lift the spirits of others, give them hope, and bring comfort and inspiration.
Good communicators become natural leaders.
It's time for YOU to master
the art and skill of great communication!
We offer a unique audio program by the remarkable and incomparable Nido Qubein titled How to Be a Great Communicator, that will teach you to become a master of this enormously powerful and highly advantageous skill. You'll discover:
How to get people to want to pay attention to you. (There are three surprisingly easy techniques.)
How to listen. (Most of us are so busy planning what we're going to say next, we don't listen.)
How to build charisma. (You may think you have the charisma of a clam, but the seven strategies you'll learn will turn you around 180 degrees.)
How to make an effective speech. (This one session alone could be invaluable because most people don't know how to speak effectively.)
All of this is organized into an impactful program that makes this critical skill easy to learn. As a matter of fact, you will astounded by how quickly you absorb so much immediately-applicable information.
That's because Nido Qubein has mastered the highest level of teaching. He is an extremely successful entrepreneur, business leader, investor, and currently the Dean of High Point University.
How to Be a Great Communicator gives you an extraordinary opportunity to learn a skill few people have. Learning that skill will give you a huge advantage in life and bring you rich rewards, both financial and emotional.
Get a head start on being a better communicator tomorrow, by ordering this transformational program today!
Sincerely,
Tragedy at Toyota: How Not to Lead in Crisis
Tragedy at Toyota: How Not to Lead in Crisis
Posted by Bill George | 0 Comments | Filed in: 7 Lessons, Business, Crisis, Leadership
Originally Posted in Harvard Business School Working Knowledge on February 22, 2010
Toyota's ever-widening problems are a tragic case study in how not to lead in crisis.
Under the media spotlight, Toyota CEO Akio Toyoda, grandson of the founder, went into hiding and sent American CEO Jim Lentz to make apologies. (Editor's note: Toyoda has agreed to appear before a Congressional inquiry this week.) Meanwhile, he let serious product quality issues spiral out of control by understating safety risks and product problems. This left the media, politicians, and consumers to dictate the conversation, while Toyota fumbled the responses.
Disingenuous quasi-apologies and disjointed plans for resolution have been Toyota's substitute for crisis response. As accounts pour in about declining quality, the company parades out relatively unknown mid-level managers to quell the firestorm.
It won't work. "You live by the sword; you die by the sword." Toyota's weapon of choice has always been quality, a competitive advantage that prompted many Americans to stop buying GM and Ford brands. Toyota can only regain its footing by transforming itself from top to bottom to deliver the highest quality automobiles.
When terrorists laced Tylenol capsules with cyanide in the mid-1980s, Johnson & Johnson CEO Jim Burke understood his company credo challenged him to put the needs of customers first. Although J&J was not responsible for these problems, Burke nevertheless recalled every Tylenol product from the market.
This is not a crisis of faulty brakes and accelerators, but a leadership crisis. During Chrysler's 1980s crisis, CEO Lee Iacocca took charge, restoring consumer trust and prosperity. When General Motors emerged from bankruptcy last summer, Chairman Ed Whitacre became the trustworthy, determined face of the company's comeback.
Toyota needs a credible leader with a strong, cohesive plan. Mr. Toyoda is anything but. His uninspired words of optimism from Davos only unnerved customers and U.S. regulators. Meanwhile, Ford and GM are working hard to regain the market share they lost at Toyota's expense.
How can Akio Toyoda get Toyota back on track? I offer recommendations based on my recent book, 7 Lessons for Leading in Crisis.
1: Face reality, starting with yourself. Faced with multiple reports of accidents from sticking accelerators, Toyota blamed the problems on stuck floor mats and panicky drivers. Instead, Toyota should acknowledge that its vaunted quality system failed. CEO Toyoda should take personal responsibility by saying that he pushed too hard for growth and neglected quality. By admitting his errors, he gives every Toyota employee permission to acknowledge mistakes and to get on with correcting them, instead of denying reality.
2: Don't be Atlas; get the world off your shoulders. Toyoda cannot expect to solve problems of this magnitude himself. Instead, he needs a crisis team reporting directly to him, working 24/7 to get problems fixed—permanently. He also needs outside counsel, as he appears to be listening only to insiders who are defensive about criticism. He should add the world's top quality experts to his fix-it team and listen carefully to their advice.
3: Dig deep for the root cause. When Toyota's problems first surfaced, the company blamed a symptom—loose floor mats—and exonerated the accelerators. Instead, management should have required its best engineers to get to the root cause of this problem and every other quality problem being reported. This is basic engineering and quality discipline.
4: Get ready for the long haul. These problems won't just fade away. In fact, they are likely to get worse before getting better. Just as the seeds were sown over the past ten years by placing growth ahead of customer concerns and quality, digging deep into problems will likely uncover more quality concerns that will take years to resolve. Toyota must invest heavily in corrective actions while its sales shrink and profits implode, requiring major cash resources until its reputation can be restored.
5: Never waste a good crisis. For all the pain Toyota is experiencing, this crisis provides a unique opportunity to make fundamental changes required to restore Toyota quality. The crisis is melting away the denial and resistance that existed in recent years. Employees are ready for new direction, and they are willing to make radical changes to renew the company. With Toyoda's leadership, Toyota automobiles can be restored to the world's highest quality.
6: You're in the spotlight: follow True North. In a crisis, people insist on hearing from the leader. Akio Toyoda can't send out public relations specialists or his American executives to explain what happened. Having lost sight of his company's True North—its values and principles—Toyoda must come out of hiding, take personal responsibility, and subject himself to intense questioning by regulators and the media. Then he should make a personal commitment to every Toyota customer to repair the damage, including buying back defective cars.
7: Go on offense; focus on winning now. Coming out of this crisis, the market will never look the same. GM and Ford are rapidly regaining market share, while the confidence of Toyota's loyal customers is badly shaken. Toyota cannot wait until all its quality problems are resolved. It must play defense and offense simultaneously. To win, Toyota has to offer advanced features and superior quality, better value for consumers, greater safety, and improved fuel efficiency.
This is a challenging menu, and this crisis is the true test of Akio Toyoda's leadership. Is Toyota up to these challenges? I believe this is a great company that will resurrect its reputation and restore its leadership.
http://www.billgeorge.org/blog/category/7%20Lessons
Posted by Bill George | 0 Comments | Filed in: 7 Lessons, Business, Crisis, Leadership
Originally Posted in Harvard Business School Working Knowledge on February 22, 2010
Toyota's ever-widening problems are a tragic case study in how not to lead in crisis.
Under the media spotlight, Toyota CEO Akio Toyoda, grandson of the founder, went into hiding and sent American CEO Jim Lentz to make apologies. (Editor's note: Toyoda has agreed to appear before a Congressional inquiry this week.) Meanwhile, he let serious product quality issues spiral out of control by understating safety risks and product problems. This left the media, politicians, and consumers to dictate the conversation, while Toyota fumbled the responses.
Disingenuous quasi-apologies and disjointed plans for resolution have been Toyota's substitute for crisis response. As accounts pour in about declining quality, the company parades out relatively unknown mid-level managers to quell the firestorm.
It won't work. "You live by the sword; you die by the sword." Toyota's weapon of choice has always been quality, a competitive advantage that prompted many Americans to stop buying GM and Ford brands. Toyota can only regain its footing by transforming itself from top to bottom to deliver the highest quality automobiles.
When terrorists laced Tylenol capsules with cyanide in the mid-1980s, Johnson & Johnson CEO Jim Burke understood his company credo challenged him to put the needs of customers first. Although J&J was not responsible for these problems, Burke nevertheless recalled every Tylenol product from the market.
This is not a crisis of faulty brakes and accelerators, but a leadership crisis. During Chrysler's 1980s crisis, CEO Lee Iacocca took charge, restoring consumer trust and prosperity. When General Motors emerged from bankruptcy last summer, Chairman Ed Whitacre became the trustworthy, determined face of the company's comeback.
Toyota needs a credible leader with a strong, cohesive plan. Mr. Toyoda is anything but. His uninspired words of optimism from Davos only unnerved customers and U.S. regulators. Meanwhile, Ford and GM are working hard to regain the market share they lost at Toyota's expense.
How can Akio Toyoda get Toyota back on track? I offer recommendations based on my recent book, 7 Lessons for Leading in Crisis.
1: Face reality, starting with yourself. Faced with multiple reports of accidents from sticking accelerators, Toyota blamed the problems on stuck floor mats and panicky drivers. Instead, Toyota should acknowledge that its vaunted quality system failed. CEO Toyoda should take personal responsibility by saying that he pushed too hard for growth and neglected quality. By admitting his errors, he gives every Toyota employee permission to acknowledge mistakes and to get on with correcting them, instead of denying reality.
2: Don't be Atlas; get the world off your shoulders. Toyoda cannot expect to solve problems of this magnitude himself. Instead, he needs a crisis team reporting directly to him, working 24/7 to get problems fixed—permanently. He also needs outside counsel, as he appears to be listening only to insiders who are defensive about criticism. He should add the world's top quality experts to his fix-it team and listen carefully to their advice.
3: Dig deep for the root cause. When Toyota's problems first surfaced, the company blamed a symptom—loose floor mats—and exonerated the accelerators. Instead, management should have required its best engineers to get to the root cause of this problem and every other quality problem being reported. This is basic engineering and quality discipline.
4: Get ready for the long haul. These problems won't just fade away. In fact, they are likely to get worse before getting better. Just as the seeds were sown over the past ten years by placing growth ahead of customer concerns and quality, digging deep into problems will likely uncover more quality concerns that will take years to resolve. Toyota must invest heavily in corrective actions while its sales shrink and profits implode, requiring major cash resources until its reputation can be restored.
5: Never waste a good crisis. For all the pain Toyota is experiencing, this crisis provides a unique opportunity to make fundamental changes required to restore Toyota quality. The crisis is melting away the denial and resistance that existed in recent years. Employees are ready for new direction, and they are willing to make radical changes to renew the company. With Toyoda's leadership, Toyota automobiles can be restored to the world's highest quality.
6: You're in the spotlight: follow True North. In a crisis, people insist on hearing from the leader. Akio Toyoda can't send out public relations specialists or his American executives to explain what happened. Having lost sight of his company's True North—its values and principles—Toyoda must come out of hiding, take personal responsibility, and subject himself to intense questioning by regulators and the media. Then he should make a personal commitment to every Toyota customer to repair the damage, including buying back defective cars.
7: Go on offense; focus on winning now. Coming out of this crisis, the market will never look the same. GM and Ford are rapidly regaining market share, while the confidence of Toyota's loyal customers is badly shaken. Toyota cannot wait until all its quality problems are resolved. It must play defense and offense simultaneously. To win, Toyota has to offer advanced features and superior quality, better value for consumers, greater safety, and improved fuel efficiency.
This is a challenging menu, and this crisis is the true test of Akio Toyoda's leadership. Is Toyota up to these challenges? I believe this is a great company that will resurrect its reputation and restore its leadership.
http://www.billgeorge.org/blog/category/7%20Lessons
Five Resolutions for Aspiring Leaders
Five Resolutions for Aspiring Leaders
Posted Dec 31, 2011 by Bill George & John Coleman | 0 Comments | Filed in: Leadership
Originially Posted on 0 Comments
December 30, 2011
As the New Year approaches, people will be making resolutions to eat better, exercise more, get that promotion at work, or spend more time with their families. While these are worthwhile goals, we have a more important challenge for young people: Think seriously about your development as a leader.
These are tough times. Many leaders of the baby boomer generation have failed in their responsibilities by placing their self-interest ahead of their organizations. In so doing, they have failed to serve society's best interests. As a result, more young leaders from Gen X and the Millennials are being asked to take on major leadership responsibilities. To be prepared for the challenges you will face, we propose the following resolutions this New Year's:
Find a trustworthy mentor: Mentorship is a critical component of your development as a leader. A 2004 study showed that young leaders with mentors were more likely succeed professionally and experience career satisfaction. The essence of effective mentoring is developing a trusting relationship between the mentor and mentee. Identify someone with whom you have a genuine chemistry and who is committed to your development. Although many mentees do not realize it, a sound relationship is a two-way street that benefits both parties — not just the mentee. We suggest looking for mentors whom you admire for their values and character more than their success.
Form a leadership development group: Most of us have little time to reflect on the values and characteristics we want to define us as leaders, the difficulties we're facing, or the long-term impact we hope to have. Forming a leadership development group can give you the space you need to think deeply about these subjects. Leadership development groups are groups of six to eight people who meet to share their personal challenges and discuss the most important questions in their lives. Find people you can trust, and make a commitment to be one another's confidential counselors. Meet regularly, and share openly your life stories, crucibles, passions and fears, while offering each other honest feedback.
Volunteer in a civic or service organization: Have you served your community this year? In the Facebook era it's easy to lose touch with our real-world neighbors. Long hours often cause us to avoid volunteer opportunities. Participating in local organizations — from religious organizations to civic groups — can give you early leadership experiences, provide real connection to your neighbors, and offer opportunities to serve others. It adds a dimension to your life that work can't, and helps you develop and solidify your character while giving back to the community. You will find your time serving a community organization is highly rewarding while broadening your outlook on people and life.
Work in or travel to one new country: "The world is flat," as Tom Friedman puts it, so it has never been more important to get global experience. In the future cultural sensitivity will be a more important characteristic for leaders than pure intellectual ability. John's survey of more than 500 top MBAs found that on average they had worked in four countries prior to entering graduate school and expect to work in five more in the next ten years. Having a global mindset and the ability to collaborate effectively across cultures are essential qualities for aspiring leaders of global organizations.
Finally, ask more questions than you answer: With the high velocity of change in the world, it is impossible to have answers to all the important questions. Much more important is a deep curiosity about the world and the ability to frame the right questions in profound ways. The world's toughest problems cannot be solved by you or any one organization. Your role will be to bring the right people together to address the challenging issues you raise. Our research demonstrates that the biggest mistakes result from decisions made by people without deep consideration of thoughtful questions.
Young leaders will soon be asked to take on major leadership responsibilities in their organizations and their communities. We believe it is essential that they take steps like these in order to be prepared for the difficult leadership challenges they will face. There's no better time to get started than the coming year.
http://www.billgeorge.org/page/five-resolutions-for-aspiring-leaders
Posted Dec 31, 2011 by Bill George & John Coleman | 0 Comments | Filed in: Leadership
Originially Posted on 0 Comments
December 30, 2011
As the New Year approaches, people will be making resolutions to eat better, exercise more, get that promotion at work, or spend more time with their families. While these are worthwhile goals, we have a more important challenge for young people: Think seriously about your development as a leader.
These are tough times. Many leaders of the baby boomer generation have failed in their responsibilities by placing their self-interest ahead of their organizations. In so doing, they have failed to serve society's best interests. As a result, more young leaders from Gen X and the Millennials are being asked to take on major leadership responsibilities. To be prepared for the challenges you will face, we propose the following resolutions this New Year's:
Find a trustworthy mentor: Mentorship is a critical component of your development as a leader. A 2004 study showed that young leaders with mentors were more likely succeed professionally and experience career satisfaction. The essence of effective mentoring is developing a trusting relationship between the mentor and mentee. Identify someone with whom you have a genuine chemistry and who is committed to your development. Although many mentees do not realize it, a sound relationship is a two-way street that benefits both parties — not just the mentee. We suggest looking for mentors whom you admire for their values and character more than their success.
Form a leadership development group: Most of us have little time to reflect on the values and characteristics we want to define us as leaders, the difficulties we're facing, or the long-term impact we hope to have. Forming a leadership development group can give you the space you need to think deeply about these subjects. Leadership development groups are groups of six to eight people who meet to share their personal challenges and discuss the most important questions in their lives. Find people you can trust, and make a commitment to be one another's confidential counselors. Meet regularly, and share openly your life stories, crucibles, passions and fears, while offering each other honest feedback.
Volunteer in a civic or service organization: Have you served your community this year? In the Facebook era it's easy to lose touch with our real-world neighbors. Long hours often cause us to avoid volunteer opportunities. Participating in local organizations — from religious organizations to civic groups — can give you early leadership experiences, provide real connection to your neighbors, and offer opportunities to serve others. It adds a dimension to your life that work can't, and helps you develop and solidify your character while giving back to the community. You will find your time serving a community organization is highly rewarding while broadening your outlook on people and life.
Work in or travel to one new country: "The world is flat," as Tom Friedman puts it, so it has never been more important to get global experience. In the future cultural sensitivity will be a more important characteristic for leaders than pure intellectual ability. John's survey of more than 500 top MBAs found that on average they had worked in four countries prior to entering graduate school and expect to work in five more in the next ten years. Having a global mindset and the ability to collaborate effectively across cultures are essential qualities for aspiring leaders of global organizations.
Finally, ask more questions than you answer: With the high velocity of change in the world, it is impossible to have answers to all the important questions. Much more important is a deep curiosity about the world and the ability to frame the right questions in profound ways. The world's toughest problems cannot be solved by you or any one organization. Your role will be to bring the right people together to address the challenging issues you raise. Our research demonstrates that the biggest mistakes result from decisions made by people without deep consideration of thoughtful questions.
Young leaders will soon be asked to take on major leadership responsibilities in their organizations and their communities. We believe it is essential that they take steps like these in order to be prepared for the difficult leadership challenges they will face. There's no better time to get started than the coming year.
http://www.billgeorge.org/page/five-resolutions-for-aspiring-leaders
Monday, January 2, 2012
The Seven Learnable Traits Of The Fantastically Wealthy
Written by Jonny August 12th, 2010
The wealthy all have some defining characteristics that have been responsible for their wealth. These are learnable.
Why Read (1000 Words)
The wealthy all have some defining characteristics that have been responsible for their wealth. These are learnable.
The Money Non Secret
I don’t think it is a secret that most people would like to own a lot of money. Most people would like to be rich, have lots of mulah, coinage or dough. However, there is a difference between being rich and being wealthy. The wealthy are indeed rich, but the rich are not always wealthy. Cryptic I know, but stick with me a few more sentences.
You can win the lottery, become famous or earn a huge paycheck and become rich, but not necessarily wealthy. Millions can easily disappear within a few years which is why most lottery winners return to their previous level of wealth within 5 years of winning and American football stars are, on average, bankrupt within 4 years of giving up the game . Britney Spears career anyone?
Having money is not the same as being wealthy, being wealthy is about being able to create money and look after money for many generations. You can be lucky and get rich, but it is unlikely, far better to learn how to become wealthy and ensure you become rich and that those riches will last. Here’s some traits of the wealthy to get you started.
Who You Need To Be
The Wealthy Are All The Same, The Poor Are All The Same
There is a mold for wealthy and successful people, a predisposition some would say. Wealthy and successful people are different from poor people. They think differently and they act differently. Many of us do not share the mold of the wealthy but it is one you will have to squeeze yourself into as money does not hang around the out of shape. The 7 essential attributes that all wealthy individuals, generally agreed by most that have studied the lives of the wealthy extensively, share are listed below.
The 7 Traits
Low Emotion: When it comes to money and wealth, emotions are going to get you into trouble. The wealthy understand this and learn to control their emotions and think logically when it comes to financial decisions. High emotions tend to lower your financial intelligence and it is your financial intelligence that ultimately makes you wealthy.
Immense Boldness – We all have self doubt from time to time. The difference between the wealthy and the poor is that the wealthy face it head on and conquer their fears, the poor run and hide from them. Boldness is not about having no fear, it is about what you do with that fear. Do you let it cloud your judgement and shy away from profitable decisions or do you use it to help clarify and take decisive action when a deal presents itself.
Great Salesmen – Sales and salesmen have negative connotations to most people but this is the very reason many talented and intelligent people do not see the recognition or success they deserve. Most people are just one skill away from wealth – sales. Wealthy people are great salespeople. No one becomes wealthy on their own, and so it is critical to sell your ideas well, whether this is for a company, a product or an investment.
Great Leaders – Great leaders are great inspirers and managers of people. Without exception, almost all wealthy individuals are great leaders of people – of their staff, of the people they work with, of the teams they create. If leading people fills you with fear then you need to find a way to control that fear. No-one creates great wealth alone and no one is going to follow you in your path to riches if you cannot lead them well.
Excellent Communicators – It is communications skills such as writing, speaking and negotiating that are crucial to a life of success. You can have the greatest ideas and the best laid plans but unless you can communicate them well to others and create and inspire teams to help you achieve your goals then you might as well be pushing against a brick wall. The wealthy are great people persons, that is one of the secrets to their success.
Failure Connoisseurs – No one likes to fail, not the poor and definitely not the wealthy. There are two ways you can react to failure, it can defeat you or it can help you to grow. Failure falls on both the wealthy and the poor but the fundamental difference is that it helps the wealthy to grow whereas it defeats the poor. If you wish to become wealthy then failure is part and parcel of the game. There is no wealthy person in history who has not failed and not lost money, it is part of the process. Failing is not the issue, not learning from failure is a problem.
Responsibility Takers – With great wealth comes great responsibility. The life of the wealthy is not all fun and games, they are responsible for many organisations, investments and most importantly people. The wealthy know that when the chips are down then it falls on their heads, they are there for everything, not just the successes. The wealthy don’t make excuses, try to shirk the blame or overlook their failings. They take responsibility for their actions and decisions, whether they turned out well or not. Taking responsibility and being a person of integrity is vital in becoming the person you need to be in order to be a good steward of money.
To Sum Up
If you currently can’t see yourself as one of these people that share these characteristics then some serious personal work needs to be done. These are the skills one needs to develop in order to become wealthy. It takes time, but the payoff is worth it.
Key Notes
The 7 Key Characteristics of the wealthy are that they Have Low Emotion, Have Immense Boldness, Are Great Salesmen, Are Great Leaders, Have Excellent Communicators, Are Failure Connoisseurs and Take Responsibility
Here’s to your foundation of wealth.
Choose: Master Of Money Or Slave To It
If you want to start on the road t
o being fantastically wealthy then look out for my new ebook. It launches shortly so here is a sneak preview on the goodiness you can expect. Click on the image for a larger view.
Help Me Out
I give all this advice out for free and so if you like what I write and it help you, please help me out by letting others know. On this site, it has been scientifically proven that by doing so you will become instantly twice as attractive to the opposite sex. Can’t argue with science.
http://thelifething.com/how-to-be-rich/the-seven-learnable-traits-of-the-fantastically-wealthy/
The Bamboo Oracle —-Chao-Hsiu Chen
The Bamboo Oracle —-Chao-Hsiu Chen
leave a comment »
Sebutlah sifat bambu yang tidak memiliki bunga dan buah.
Tidak sama dengan pohon lainnya yang senantiasa sombong dengan bunga dan buahnya,
bambu tetap berdiri tegak tanpa sumber kesombongan terakhir.
Disamping berakar kuat ke dalam, bambu juga senantiasa hidup dalam keheningan dan kerendahhatian.
Lihatlah ketika angin bertiup, ia hanya bergesek-gesek kecil dengan sahabatnya dan kemudian menimbulkan suara desis yang hening.
Ketika angin lembut datang, ia berdesis hening,
ketika angin ribut datang ia juga berdesis hening.
Mirip dengan bambu yang kuat dan kokoh karena berakar ke dalam,
demikian juga kehidupan banyak orang yang berakar ke dalam.
Tidak ada satupun kekuatan dari luar yang bisa merobohkannya.
Berbeda dengan orang yang berakar keluar,
orang-orang yang didikte kesombongan dan kecongkakan,
amat dan sangat tergantung pada komentar,pendapat, pujian dan makian orang lain.
Ketika dipuji bersinar cerah , tatkala dikritisi gelap gulita mood – nya …
http://rezapuradiredja.wordpress.com/2009/12/24/the-bamboo-oracle-chao-hsiu-chen/
leave a comment »
Sebutlah sifat bambu yang tidak memiliki bunga dan buah.
Tidak sama dengan pohon lainnya yang senantiasa sombong dengan bunga dan buahnya,
bambu tetap berdiri tegak tanpa sumber kesombongan terakhir.
Disamping berakar kuat ke dalam, bambu juga senantiasa hidup dalam keheningan dan kerendahhatian.
Lihatlah ketika angin bertiup, ia hanya bergesek-gesek kecil dengan sahabatnya dan kemudian menimbulkan suara desis yang hening.
Ketika angin lembut datang, ia berdesis hening,
ketika angin ribut datang ia juga berdesis hening.
Mirip dengan bambu yang kuat dan kokoh karena berakar ke dalam,
demikian juga kehidupan banyak orang yang berakar ke dalam.
Tidak ada satupun kekuatan dari luar yang bisa merobohkannya.
Berbeda dengan orang yang berakar keluar,
orang-orang yang didikte kesombongan dan kecongkakan,
amat dan sangat tergantung pada komentar,pendapat, pujian dan makian orang lain.
Ketika dipuji bersinar cerah , tatkala dikritisi gelap gulita mood – nya …
http://rezapuradiredja.wordpress.com/2009/12/24/the-bamboo-oracle-chao-hsiu-chen/
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