Go to just about any business conference these days and you’re likely to see some pundit on stage telling a story about a company—often Blockbuster, Kodak or Xerox—that got blindsided by nascent trends. Apparently, the leaders who rose to the top of the corporate ladder were so foolish they just weren’t paying attention.
These stories are good for a laugh, but they usually aren’t true. People who lead successful companies are, for the most part, competent, hardworking and ambitious. That’s how they got their jobs in the first place. There are, of course, exceptions. People who have a talent for self-promotion can get to the top too.
Still it’s much better to assume competence. That’s how we learn. The truth is that we all get disrupted sooner or later. It doesn’t only happen to silly people. Every square-peg business eventually meets its round-hole world. Smart, competent people fail all the time and, if we want to have a chance at avoiding their fate, we need to understand how that happens.
read more…
“Not everything that can be counted counts and not everything that counts can be counted,” is a quote often attributed to Albert Einstein, which I think aptly sums up the past 40 years. Since the 80s, we’ve been laser-focused on numbers and missed the underlying math. We’ve become finance-obsessed but lost track of economics.
Consider Jack Welch, who Fortune magazine named “Manager of the Century.” In the article explaining why he deserved such an honor, it lauded the CEO’s ability to increase the stock price and deliver consistent earnings growth, but nowhere did it refer to a breakthrough product or impact on society.
There’s a good reason for that. As NY Times columnist David Gelles explains in, The Man Who Broke Capitalism, Welch increased profits largely by firing workers, cutting investment and “financializing” the firm. During his 20 year reign, innovation faltered and the company produced less, not more. Clearly, we need to reevaluate what we consider valuable.
read more…
When a transformational initiative fails, it’s often said that it was because people don’t like change. That’s not really true. Everywhere I go in the world, no matter what type of group I’m speaking to, people are enthusiastic about some kind of change. It’s other people’s ideas for change that they aren’t so crazy about.
Senior leaders love to tell me about their inspired visions for their enterprise, but complain that they can’t get the rank-and-file to go along. Middle managers complain that they are bursting with ideas, but can’t get the bosses to go along. As failed initiatives pile up, people talk past each other and change fatigue sets in.
It doesn’t have to be this way. There are natural laws that govern change and these laws can be learned and applied by anyone. The problem is that managers don’t study change the same way they study finance, or marketing, or strategy. Business schools don’t teach it as a discipline. But change has a lifecycle that we can learn to manage and exploit.
read more…
In every conceivable sense, the United States is a divided country. Congress, almost evenly split between two parties, seems permanently mired in rancor and gridlock . Our government struggles to put out a budget each year without shutting down. The notion that we can forge an actual vision for the future of the country often seems like some sort of nostalgic pipe dream.
That’s why the overwhelming support for the CHIPS Act is as puzzling as it is encouraging. After years of neglect of—and in some cases outright hostility to—government funding of science, the legislation, which passed the Senate by a margin of 64-33 and was signed by President Biden. It has the potential to be truly transformative.
Ironically, we may have China to thank for it. Since the end of the Cold War, the US has lacked an organizing principle and, to a great extent, a true sense of mission. Lacking a long-term vision, we’ve neglected investments in infrastructure, science and technology. Now, however, the tide may be turning and, if history is any guide, we’ll be all the better for it.
read more…
When I started this blog back in 2009, the world was a very different place. First, and perhaps most obvious, we used to come up with brand names for our blogs instead of just using our real names. Social media was just becoming a thing and there was still debate about whether digital media was a viable advertising platform.
In the early years, I argued that Facebook actually was worth the $50 billion valuation Goldman Sachs gave it. It is now with over $400 billion, even as it faces a blackout in the EU. Today, in an era that has seen pandemic, rising authoritarianism, war and strife, those times seem almost quaint. We understood so little of what kind of trouble was brewing. Now we need to figure how to fix it all.
Still, I remain optimistic. Looking through old Digital Tonto “birthday” posts I noticed that we used to assume that we could change the world by creating more powerful technology. Now it’s more clear that our challenge is change itself, which we really suck at. This week, Digital Tonto turns 13 and, like in previous years, I’m sharing some of my favorite posts.
read more…
When Lou Gerstner was chosen to lead IBM in 1993, he was an unlikely revolutionary. A McKinsey consultant and then the successful CEO of RJR Nabisco, he was considered to be a pillar of the establishment. He would, however, turn out to be as subversive as any activist, transforming the company and saving it from near-death.
Yet there was more to what he achieved than simply turning red ink to black. “The Gerstner revolution wasn’t about technology or strategy, it was about transforming our values and our culture to be in greater harmony with the market,” Irving Wladawsky-Berger, one of his chief lieutenants, told me.
Values are essential to how an enterprise honors its mission. They represent choices of what an organization will and will not do, what it rewards and what it punishes and how it defines success and failure. Perhaps most importantly, values will determine an enterprise’s relationships with other stakeholders, how it collaborates and what it can achieve.
read more…
In the summer of 1982, Poland was under strict martial law. The leaders of the revolutionary Solidarity movement were either in jail or in hiding. As the regime tightened its grip, any kind of protest risked arrest. People were demoralized, forced to sit in their homes with nothing to do but watch propaganda-laden “news” and old movies.
Yet the resident’s of Świdnik, a small city in central Poland, refused to take it sitting down. Instead, they walked. Every night at 7:30, when the evening news program began to spew the regime’s lies, they went for a walk and, just to put a fine point on the matter, some took their TV sets with them, in wheelbarrows and baby carriages.
It was fun—and funny. Similar “walking protests” soon spread virally to cities across Poland, which put the regime in a bind, they either had to shut the protests down or let people thumb their nose at the regime. This is what’s known as a dilemma action, a brilliant strategy that allows you to avoid conflict while at the same time putting your opposition into a bad spot.
read more…
We live in an automated age. From the news we read and the items we shop for, to who we date and what companies we choose to work for, algorithms help drive every facet of modern life. Such rapid technological advancement has led some to predict that we’re headed for a jobless future, where there is no more need for humans.
Yet in their new book Radically Human, Accenture’s Paul Daugherty and H. James Wilson argue exactly the opposite. In their work guiding technology strategy for many of the world’s top corporations, they have found that, in many cases, the robots need us more than we need them. Automation is no panacea.
For over a century, pundits have been trying to apply an engineering mindset to human affairs with the hope of taking a more “scientific approach.” So far, those efforts have failed. In reality, these ideas have less to do with science than denying the value of human agency and limiting the impact of human judgment. We need to stop making the same mistake.
read more…
When we’re passionate about something, we want to take action. We want to launch an initiative, start a business, hit the streets, get stuff done. Yet our bias for action can be a trap that undermines—or even completely derail—our efforts. No matter what our intentions, actions without a sound strategy are doomed to fail.
Corporate change initiatives often start with a big kick-off campaign. These rarely convince anybody of anything, but can trigger opposition and kill the effort before it ever really gets started. People who feel strongly about social change often start by organizing a march. Yet marches are a very flawed tactic, vulnerable to sabotage and rarely achieve anything substantial.
Effective transformation strategy always involves mobilizing people to influence institutions. That’s where you start. Once you’ve determined what your strategy needs to be targeted at, you can begin to design potent tactics. There are time-tested tools that have proven out over decades that can help you do this. If you’re serious about change, you should learn them.
read more…
Wherever I go in the world to speak and advise organizations, I always get the same question: “How can I get people to listen to my ideas?” The truth is that no one wants to listen to your ideas unless they solve a problem that is meaningful to them. So many initiatives fail because leaders get so focused on their passion for an idea that they fail to communicate it effectively.
People already have enough going on in their lives with their own responsibilities, ambitions and dreams. They have families to take care of, friends that they want to spend time with and their own ideas that they want to pursue. The status quo always has inertia on its side and never yields its power gracefully.
The truth is that good ideas fail all the time. In the two decades I have been researching and advising leaders about transformation, what I have found is that few have trouble coming up with new concepts. The hard part is to get others to buy in and work together towards a common purpose. That can only be done in the context of shared sense of values and mission.
read more…
