The Hindu Business Line : Good companies go bad but great managers remake them

"THERE are more books today written about business success than there are successful businesses, and the books often outlast the companies they describe." Thus describes Richard E. Cavanagh the prevailing scenario, before complimenting a recent book titled Revival of the Fittest by Donald N. Sull. The book "reverses the trend by explaining how successful companies can falter and then recover their leadership positions". Sumantra Ghoshal too praises the book: "Well-written, clearly illustrated, and intellectually rigorous." Excerpts:

Companies trapped in active inertia can exhibit some strange behaviour. They engage expensive consulting firms but fail to implement their recommendations. They adopt new technologies or business models without abandoning the old. They take a series of half steps that are too small to fix the fundamental problems but large enough to exhaust the management team and convince them they are doing something. The situation resembles a car with its back wheels stuck in a rut. Managers step on the gas, only to dig the hole deeper.

Just as magazine editors refer to the cover curse, business academics have long observed the `guru jinx', which occurs when leading management thinkers single out a company as outstanding. For instance, "In search of excellence" identified in 1982 a set of US companies that had excelled over the preceding decade. Subsequently, several of these companies — including Digital, Kodak, Wang and Kmart — suffered high-profile declines, leading Business Week to publish its famous "OOPS!" cover. The problem with the guru jinx lies in the underlying assumption that the showcased competitive formulas will work in perpetuity.

If you know what to do and believe that you yourself should do it, then what stops you? Why wait? Whenever I interview a manager who manager who made transforming commitments — successful or not — I always close with the same question, "What would you have done differently?" Almost all reply the same: I would have started and moved faster than I did. So why wait?

Logos consists of fact-based logical arguments that convince the listeners intellectually. Strategic consultants — and managers drawn from their ranks — are exemplary practitioners of this mode. Rhetoric based on logos need not be complicated to be effective. The most persuasive ideas are often the simplest (but not the most simple-minded). One recurrent theme in Jack Welch's rhetoric at GE was the "need for speed". Every single-digit improvement in inventory turns, he explained, freed $1 billion in cash. Such uncomplicated illustration succeeds by appealing to the audience's intellect.

Too much big-picture thinking at the expense of detailed execution can hinder the progress of a transformation effort. If you consider yourself a bold, creative strategist, then you should consider how you would handle the inevitable deluge of operational problems that follow a bold commitment. A good CFO and COO will help, but you may also consider whether you are the right person to lead the change.

A book on how not to go mad when good companies go bad, because great managers remake them.

All-in-one guide

MANAGERS looking for a comprehensive guide to key skills, here is the Manager's Handbook from DK, edited by Robert Heller. It has "everything you need to know about how business and management work". Such as reading a balance sheet, leading a team, understanding new technology, communicating effectively and so on. A sampler:

Employees increasingly expect a good balance between work and life. This can be achieved by hot-desking, flexible hours, contracting-out, part-time, home working, tele-working, sabbaticals, open contracts on self-managed careers, and "school-term" years. These are all practised by progressive companies that treat their employees like human beings, and get the best out of people as a result.

A thoughtless reduction of the "experience base" of an organisation weakens its motivation to learn, and leads ultimately to "organisational amnesia". By the time this stage is reached, few people really know, or care, how the organisation works any more. Then everybody is forced to keep relearning, expensively, what had previously been known.

Quality costing is a powerful technique for monitoring the real effect of failing to achieve requirements. If a requirement is not achieved "right first time", the full-cost impact of this non-conformance must be measured — in money, not in statistics or percentages. Experience has shown that there is no "economic quality level", meaning an acceptable trade-off between quality and cost. It is always cheaper to get it right first time.

Always remember that the Internet can commoditise products: that is, with little to choose between competing brands, the customer usually opts for the cheapest. This is the other side of the open market coin, and can corrode your customers' loyalty.

Time can be structured in two ways. In the sequentialist approach, time moves forward, second by second, minute by minute, in a straight line. In the synchoronistic approach, time moves round in cycles: of minutes, hours, days, weeks, months, and years. People structuring time sequentially tend to do one thing at a time. They view time as a narrow line of distinct consecutive segments. For them, time is tangible and divisible; time commitments are taken seriously, and staying on schedule is a must. Conversely, people structuring time synchronically usually do several things at a time. To them, time is a wide ribbon, allowing many things to take place simultaneously. They value the satisfactory completion of interactions with others. Promptness depends on the type of relationship. The whole philosophy of Just-in-Time (JIT) management derived from the highly synchronic Japanese.

A compact and valuable addition for managers.

Dream big

WHEN a millionaire talks, you better listen. And this millionaire writes too. Dexter Yager — a millionaire `many times over' — is a frequent speaker on how to manage money to achieve financial success. His recent book is titled Everything I know at the top I learned at the bottom which is as much the whole story in a line. Yager's tips are on how to keep your momentum, importance of big-league thinking, and how you can prevent your dream from getting the best of you. More picks:

Discover the goal behind the goal. What is your biggest goal right now? Picture it. Now imagine that this week you reached it. It's done — you did it. Now that you have it, what is it doing for you? What result is it producing? When you identify that result, you'll know the goal behind the goal.

Escape the temperament trap. This is when you identify yourself as having a certain personality that seems to be fixed in cement. If your personality is fixed in cement, so will be your progress, your journey toward your dream. Probably the clearest sign of failure in a person's life is when he or she says, "I can't help it. It's the way I am. I was born this way."

If you want your dreams to work, the quick-fix mentality has got to go. If your goal is to become wealthy, don't think it's going to happen overnight. If you're trying to become a great businessman, don't aim to achieve success in a few months or a year. If you're trying to become a great father and husband, don't think that a few days of changed behaviour will turn around years of neglecting your wife and children. The quick-fix mentality just won't cut it.

Here is a clever technique: A-B-GO. That means right now you are at point A, and you want to get to point B. Decide how to get there and go. A-B-GO.

Whenever you get stuck or lazy or frustrated, you're going to whisper to yourself: A (that's going to remind you where you are), B (that's going to remind you where you're going), and GO (that's going to remind you what you have to do to get there). It's simple but effective. Try it!

Don't win battles — solve problems. That should be your approach with other people. Don't go in to win a battle — because if you do win the battle and lose the relationship, you've really lost the war. Winning battles is not why you have a business; that's not why you have a marriage. Many people fight to win battles because they have intense feelings of inferiority. They fight all the time.

Part of the art of social intelligence is to remember that you're not in this to win battles; you're in this to solve problems.

It is good Yager is giving away clues to earn millions, rather than doling out cash.

(Books courtesy: Fountainhead, Chennai. E-mail: fhbooks@satyam.net.in)

Tailpiece

"I prefer small-size hard-bound books."

"What a fine taste of reading!"

"No, I use them as paperweights."

hindubusinessline@hotmail.com

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