Anything that delays you from adapting to irresistible
forces (factors outside of your control that drive your
market and environment) will create stalled profit
performance. Let's look at three common attitudes that
result in such delays.
"Circle the Wagons!" --The Defensiveness Stall
Although some organizations avoid being left helpless by
irresistible forces, they may fall prey to turning their
attention inward too much in creating bulwarks against the
impact of the irresistible force. By focusing on a
defensive posture, they delay adapting to the new
conditions and risk falling behind or even not surviving at
all.
Many companies whose stock prices carry low price-earnings
valuations will proudly describe what they are doing as a
"value-improving" strategy. When asked about the fact that
investors are deserting this strategy in droves, the CFO
will often confidently reply that it will all turn out in
the end.
On further inspection, the result is more often being taken
over by another company at a bargain price. The new owner
will immediately initiate a better strategy that does
translate into significant, sustained stock-price growth
that the earlier management could also have done.
"We Can Do It All!" --The Independence Stall
When new irresistible forces arrive or existing ones change
their impact, enterprises may find themselves compelled by
the need to adapt as quickly as possible. In their rush to
respond, the organization's leaders may tend to rely on
people or practices that have worked successfully in the
past. They may not stop to consider whether the enterprise
has the right resources to accomplish the now-required
tasks.
Many Internet start-ups have a sound marketing and value
model, but do not yet understand how one has to support
that model with effective sourcing, supply, and service.
Soon they find themselves falling further and further
behind in meeting customer expectations with no clear idea
about to solve the mountain of fulfillment problems.
"How Can We Miss?" --The Overoptimism Stall
A sense of certainty about success or that an enterprise is
well prepared for the future, or simply viewing the world
through rose-colored glasses can result in rigid commitment
down the wrong path. Successful enterprises are most
likely to become subject to this stall, which is one reason
why they have such a hard time anticipating and adapting to
new circumstances.
Everyone in the company assumes success and is slow to
perceive that progress is not occurring from the
organization's new initiatives. Press reports indicated
that Digital Equipment founder and CEO, Ken Olsen, had
little regard for the potential of personal computers,
likening them to toys that would never be serious tools for
engineers.
During this time, Digital dominated the market for
minicomputers, and had been successful in replacing
mainframe computers in many applications. The same forces
that allowed the company to prosper as a minicomputer
specialist doomed the company to being replaced by
competitors making smaller, cheaper machines with the same
functionality.
A few years after Olsen was replaced by the board, the
company was sold to Compaq Computer, one of the producers
of those smaller, cheaper machines. Compaq, in turn, had
problems with wishful thinking, and as a result had trouble
integrating the two companies and keeping up with Dell
Computer's build-to-order business. Compaq's CEO soon lost
his job as profits and market share faltered. Compaq in
turn was acquired by Hewlett-Packard in a controversial
transaction that ultimately cost Hewlett-Packard's CEO her
job.
Instead, be on the lookout for irresistible forces and
develop strategies that cause you to prosper regardless of
what direction the forces take.
Copyright 2008 Donald W. Mitchell, All Rights Reserved
----------------------------------------------------
Donald Mitchell is chairman of Mitchell and Company, a
strategy and financial consulting firm in Weston, MA. He is
coauthor of seven books including Adventures of an
Optimist, The Irresistible Growth Enterprise, and The
Ultimate Competitive Advantage. You can find free tips for
accomplishing 20 times more by registering at:
====> http://www.2000percentsolution.com .
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