Why Your Strategy and Culture Sucks

Myrtle Beach Marketing Agency

In a an op-ed piece that should be required reading in the halls of all boardrooms and universities, Michael Dell lays out a brief but concise argument around the impact of short-term thinking not just on our financial markets, but on our society.    My favorite quote from the piece “We find ourselves in a world increasing afflicted with myopia-governments that can’t see beyond the next election, an education system that can’t see beyond the next round of standardized tests, and public financial markets that can’t see beyond the next trade”.   This is exactly what Dell faced as he managed a rapidly growing and innovative company that turned itself into a mirror of his very reflection.   Innovation was stifled, R&D suffered and shareholder and customer interest bifurcated.

Contrast this short term thinking approach with that of Alibaba’s Chairman Jack Ma approach which is brilliantly highlighted in the article “The Gospel According to Alibaba’s Ma: Love Amazon as Thyself” By Bloomberg News  Nov 20, 2014  I have extracted the key points below and the entire article can be read at: http://www.bloomberg.com/news/2014-11-20/the-gospel-according-to-alibaba-s-ma-love-amazon-as-thyself.html

As Alibaba Chairman Jack Ma finished up his 40-minute address to the World Internet Conference in Wuzhen, China, he took time for one question: How will the company compete in the U.S. with e-commerce giants such as Amazon and eBay?

The question was straightforward, but his answer wasn’t. He warmed up to it by waxing philosophical on Christianity, Confucianism and Daoism, and how they produce different managerial styles in China and the West.

“I think the management strategy and philosophy in the West is based on Christianity,” Ma began. “They always want to find a rival. Having a rival is very important.”

Ma related how early on with Alibaba, he met with western venture capitalists who asked, “Who are your rivals?” Ma said he couldn’t answer the question.

“In China, we often talk about harmony between man and nature,” said Ma, the founder of Alibaba. “Confucianism, Daoism often stress coordination and a balanced relationship between man and nature, between man and man. We embrace Western philosophy and at the same time inherited a Chinese philosophy.”

After that brief discourse on some 2,600 or so years of Eastern and Western philosophies, Ma addressed the meat of the question.

“When we go to the U.S., we do not want to compete with eBay and Amazon,” Ma said. “We will find opportunities but we have to come to realize that we do not want to compete with eBay or Amazon in the United States.”

With about 7 billion people in the world and only about 500 million shopping online, there are lots of opportunities around the world, Ma said. And opportunities to work together.

The genius in his approach is he recognizes that Alibaba has a unique personality, a unique set of skills, and a unique competitive advantage.   They will focus on what makes them unique and what allows them to serve their customers better.

I have sat in the boardroom of Fortune 500 companies, startup organizations, and in the offices of Venture Capitalist on both coasts. If you have dealt with VC you understand my need to high “both coasts”.   What I find amazing is the constant obsession with phrases like:   We are the Amazon of X, The Uber of Y, or the AirBnB of Z.      These well meaning sales hook or elevator pitches have overcome the American psyche.        I watch leaders demand their businesses be more like these media darlings, benchmarks shift from building a lasting business to creating Uber and Amazon frontend features that fail miserable when layered on their current business model, culture, and infrastructure.   This leads to a cycle of more aggressive goals, leadership changes, and  the inevitable death spiral.  A spiral that leads to further divergence from their loyal customers and a failure to attract the new customers they so desperately desire.    Why do all these extremely intelligent leaders make these seemingly obvious blunders?  Go back and read Michael Dells comments above.   Although Dell’s comets are accurate, the cause of such thinking is a bit more complex and actually runs deeper.

Most of the leadership problems I see are the direct result of delusions of grandeur that most executives have.   To steal a poker analogy, they approach their businesses as if they are the “Big Stack” at the table when in fact they are the “small stack”.  What strong successful leader wakes up and says I can’t wait to get to the office and play the small stack.   Their egos self correct and they enter a perpetual state of “confirmation biases” seeking any data point that confirms their big stack self perception and discarding anything that fails to support their elevated self image.   They apply strategies that make sense for a big stack player, but are devastating for a small stack player.   They implement 10x growth strategies   when they have years of declining sales.   They implement these hyper growth strategies while completely ignoring the need for stabilization strategies.  They remodel the house on a crumbling foundation and point to curb appeal awards as validation of their new approach.     Their egos define the current state like this.  We are the leader in XYZ market share, if we just tweak this or that our profits will sore and our stock price will follow.   The reality is actually – you have lost 50% market share to the competition over the last decade, you have pulled back on quality and innovation to make your quarterly numbers, your leaders are more focused on their bonuses than their customers and if you don’t make drastic changes you will lose your leading market share in two years time.  Great strategies applied at the wrong time can and often are catastrophic.

If you have worked for a startup or a new emerging company you can feel the enthusiasm, energy and excitement as every employee and leader in the building can recite the company vision and their plans to change the world.   They will discuss how their company will shape the future and have a positive impact on the lives of others.   They are full of hope and expectation of success.  It as if they have a shared heartbeat of inspiration and sense of destiny that is shaping all their collective action.Watch Shark Exorcist (2016) Full Movie Online Streaming Online and Download

Go into just about any large company, one that has been around for a decade or more and you will hear things like continuous improvement, business process re-engineering, voice of the customer, total quality this and that, committee for ………, streamlining, empowering, teamwork, fast tracking, culture of you fill in the blank.  Talk to any employee who has been there a while and they usually can cite a long history of similar initiatives with different names that changed every year or two as results continued to decline.   The blame game soon starts as somebody must be a fault for not executing the leadership’s sound strategy.  It starts slowly but begins to spread through the organization.  Everyone starts to focus on saving costs as an easier way to hit their numbers.   They reduce investments to avoid failure and the inevitable spotlight that would follow.  They employ strategies to raise prices in order to make quarterly numbers.   They focus on improving margins, not declining sales.   A culture of fear takes over as the continued cycle of layoffs and cost cutting sends everyone under cover.   A general feeling of impending doom permeates the entire culture.  New leaders come in and inject new ideas that turn out to be the same ideas prior leaders had but could not or would not attempt to implement as they were already standing on thin ice.    This is why turnarounds are so hard and leaders like Alan Mulally so rare.   Mr. Mulally understood in order to turn things around; you had to uncover the core problems, the true issues, not the symptoms, not the perception of reality, the very essences of the problems must be understood, treated, and corrective measure taken to create a new shared vision and culture.

With 2014 coming to an end, will you find the courage to look in the mirror and see not what you want to see, but what others see?   Will you find the clarity to ground yourself and commit to aligning your business and life’s strategies with your actual current state?  Will you find the faith and strength to commit to the future not the next quarter?    I believe you will and more importantly the world needs to believe!

Thanks for your time and I look forward to hearing your thoughts here or on Twitter @dennisstemmle