Monday, December 27, 2004

Is Business Managment about Analysis?

MBA courses and Strategy consultants operate on the assumption that Management is about analysis. Professor Henry Mintzberg has recently pointed out that it is even more about synthesis. To this, I would add that it is about insight as well. The best analysis is worthless without both of the latter.

Saturday, December 18, 2004

What do companies under attack have in common with Michael Jackson?

Over the years, from Detroit when Ralph Nader seized on them for safety, to drug companies when pharmaceuticals are found to be be dangerous; tobacco companies denied that cigarettes caused lung cancer and food companies that too much eating causes obesity, we see the same patterns. Top management thinks that if they repeat their defense often enough and loudly enough they can drown out the critics. They often even believe it is true. However, this is parallel behavior to Michael Jackson continuing to spend social time with children after being accused of pedophila. Whether true or not, the appearance of impropriety or bad behavior may be all that it needed. Unfortunately, lawyers may advise denial, but this only serves to increase the enormity of the crime in the public's eyes. The manufacturer's of silicone breast implants denied any fault, and while there is still scientific doubt, the public condemmed them. Asbestos manufacturers denied all flaws. The public believes that corporations lie, and certainly that any data which seems to prove innocence that comes from the company, or is sponsored by it, is unlikely to be true. Any inaccuracy or ambiguity in the data is the end of any credibility the company has.

Comanies should not stonewall, and have to make the public part of the solution.

Sunday, December 12, 2004

Irrational actions

People persist in trying to explain their own and the actions of others in rational, logical, terms. Sometimes, they are so clearly nonsensical that we ascribe them to psychological or characterological disorders. People may have thinking which is so distorted by psychoses, neuroses, or character issues, that that are incapable of thinking and reacting logically. However, on a lesser level, most of us behave in ways which are the result of past experiences. Just as the burnt child fears the flames, so we may associate some rational act with something which turned out badly, and so we avoid performing it.

This carries over to interpersonal relations as well as business decisions. Knowing yourself objectively is the only way to avoid this.

Sunday, December 05, 2004

Why is a 175 year old soap company in Cincinnati, Ohio, the most consistently innovative company on earth?

In each year, business magazines publish lists of the top companies in each field of excellence. Books, dating from In Search of Excellence to Built to Last, extol the virtues of this company or that. Yet over its 175 year history, Procter & Gamble has demonstrated an ongoing eagerness to challenge the accepted wisdom and reinvent itself. From organizational innovation, such as the creation of the Marketing function and invention of the Brand Manager. It has created new tools of business, from mundane promotional tools to moving close to WalMart in a new defintion of supply chsin efficiency, or creation of the Tremor process to harness word-of-mouth to build businesses. It has a record of innovation in new products, from new potato chips to the spinbrush, which is unequalled in business.

The fundamental reason for this is the company's eagerness to challenge all that has gone before. It assumes that if something has been done for a number of years, it can probably be done in a better way. This is rare in any organization, and while other companies try to copy Procter & Gamble, the very thought process of "copying" means it starts off on the wrong footing.

Thursday, December 02, 2004

Walmart's Remedial action

Today, the company announced that it would divert advertising to tell people about its low prices. On August 19th, I pointed out that the attacks on the company for not treating people well merely reinforced its image for low prices. However, WalMart put a lot of effort into telling the world how much it spends on the social good such as education, healthcare, and training. As one might expect, this effort has backfired, and the company has to shift the balance yet again.

Beware of unintended consequences. The results of an action are rarely exactly what you predict.

Wednesday, December 01, 2004

Things change all around us and we do not see it.

We are creatures of three dimensions, and all spacial ones. Although we move through time, we live in the present. We rarely have the ability to step back and see the sweep of time. a very few humans have the ability. H.G. Wells was one. Olaf Stapledon in his 1930 novel "last and First Men" covered the future history of mankind over 2 million years! In his later novel, written in 1937, "Starmaker," he covered the history of mankind in a couple of paragraphs!

So we forget thst the top ten discount retailers of 1962, the year of WalMart's foundation are none of them in existence. We find it difficult to imagine the sweep of time so that even the most imaginative prognosticators are wildly wrong. The future of the computer, the phone, film and even distribution channels and book publishing have been poorly predicted. Yet while this realization may not make us better forecasters, it does not even make us more wary about the predictions of others.

Of course, if anyone could predict the future their dreams would be dismissed as signs of insanity.

Sunday, November 14, 2004

Too old or too young?

It sometimes feels that the world is biased against people who either are too young, or too old. Particularly if you are very young you see all the older people getting all the key positions and if you are older, you see all the young people getting all the opportunities. In fact, we may have a bifurcated system , where the average person at either end of the spectrum is thought of as either immature, or in case of older people, rigid and out of date. However, we do not have to look far to see Donald Rumsfeld, Alan Greenspan, Rupert Murdoch and others you are well beyond the "normal" retiring age and performing with vigor and effectiveness, whether or not you agree with what they do. So perhaps the key is to be a lifelong learner who advances rapidly when young and continues to learn when older. The key to this is to accept that there is always something to learn and to challenge oneself all the time. We do nothing as well as we could!

Assume that and spend time on how to improve all which we do.

A changing world - in unexpected ways!

The past is a poor predictor of the future. In 1972, the Club of Rome published a book, "The Limits to Growth." The book predicted that if the world continued as it was, resources would run out within a century. The book sold 12 million copies in 37 languages. During the 1950 and '60s, the world could not feed itself. However, now we worry about global warming, and since the Green Revolution (started by the Rockefeller foundation in 1944), the world can produce more food than it needs. Countires in which many people starved to death became food exporters. The West now worries about an epidemic of obesity and diabetes, while in less developed countiries wars are the only barrier to distribution of food. It is fair to say that most long-term predictions by experts are wrong. No-one fifty years ago foresaw genetic engineering, or laseer surgery, nor did anyone seventy-five years ago predict antibiotics.

Yet companies fail because they rely on predictions by experts. Railroads did, airlines are doing so now. Electronics companies and car companies persist in extrapolating the past. It will be interesting to see if we ever get away from this.

Tuesday, October 26, 2004

Is the election getting exciting?

Election day is eight days away. For many the excitement is growing, yet for others, burnout is setting in. We will shortly have a new US President - either George W. Bush again, or John Kerry. Will life change for most people? You bet it will! Yet most voters will be casting their ballots based on impressions, not on a clear and accurate understandingof the implications. Most people know more about what to expect from their detergent than political candidates.
In our society, the marketplace is more of a pure democracy than politics. We have multiple choices of detergents, or dog food, or toothpaste, and we can test the alternatives at low risk and with the ability to replace it if we don't like it. This is why commerce is more exciting than politics.

Saturday, October 23, 2004

Is business losing control?

I read recently in the Wall Street Journal that in the Comsumer Packaged Goods industry, 17.4% of revenues are being spent to buy shelf space. These companies have been gradually losing control of their business over the past thirty years.
Equally, we read that major corporations such as Marsh & McLennan or Citicorp are engaging in dubious practices and indictments against Corporate Officers are being considered. If so, they will simply join management from Adelphia, ENRON, Peregrine Systems, CA and many others.
The inmates are indeed running the asylum and we have to take back control.

Wednesday, October 20, 2004

Lipservice to customer satisfaction

We keep on hearing about how important customer satisfaction is to many companies, yet their actions suggest that it really is not very important. Business often acts as though it believes that customer satisfaction and shareholder return are mutually exclusive.
Objective evidence shows that companies which believe in product quality and customer satisfaction perform better than companies which do not. However, many people do not believe it as it seems to be counter-intuitve. Sometimes things are counter-intuitive. If they were not we would not need data and analysis.

Tuesday, October 12, 2004

Why are people their own worst enemy?

So often we see that people behave in ways which hinder their own success. We see people being rude to others when the only possible result is to enrage them. We see people fail to co-operate or to help each other and end up with a suboptimum result. Why do people not see that ego can hurt themselves? Are glory and recognition so important that many will sacrifice their own interests for them? We hear that it is better to share in a success than wholly own a failure, yet so many act as though they would rather own the failure.
I see with so many alumni and networking groups that a few people do the work while most others simply enjoy the results. Yet the people who do the work rarely are rewarded. Perhaps by continuing to provide unpaid effort, they are rewarding and training for selfish behavior. I continue to believe that peopl ehave good intentions. It is a pity that they do not see the value of contributing.

Wednesday, October 06, 2004


I have been preaching simplicity for many years now. Simplicityhas many benefits, it tends to reduce costs for all in the chain. It will speed up all activities. It will increase customer satisfaction, and it will make it easier to fix something whrn it goes wrong. Over 15 years ago, I was talking about "disintermediation", where the reducition of steps and intermediaries makes all more effective. Dell computer showed us how! About five years ago, I endorsed the book "Simplicity" and its companion "Work 2.0," by Bill Jensen. Now I would endorse David Teten's blog which extends the concepts very effectively.
We lose so much when we complicate life and business. So much that is really simple is presented as complex and made that way. Like Alexander the Great sclicing through the Gordian knot, a razor sharp blade is often more effective than a complex activity.
Let us apply this to every activity. I am not suggesting simple-mindedness. Simplicity is often quite difficult, and requires a lot of work.

Sunday, October 03, 2004

Is Marketing Obsolete?

In the 1960s, 70s and 80s, Marketing was "hot". Following the introduction of the brand management sytem as P&G in 1922, the marketing philosophy had been slow to spread until many years later it exploded. For several decades, it looked as though it would be universally adopted. However, less than half of the Fortune 500 companies havc a Chief Marketing Officer, whereas virtually all have a Chief Financial Officer. Marketing became more technical, specialised and tactical. For many marketers, they saw their major challenge to be getting more money to spend. As Nirmalya Kumar, Professor of Marketing at London Business School has suggested, although the understanding of Marketing Strategy has spread to CEO and CFO, the function of Marketing has become less relevant. Since anyone thinks they can do Marketing Strategy, the need for a CMO is far from obvious as long as technical experts are in the organization to execute. So while other functions have become more strategic, perhaps Marketing has become a technical specialty. In many industries and companies, Marketing has been split into Product Management, Channel Marketing and Marketing Communications. Strategy and Financial consultants not only feel qualified to assist clients on Marketing issues better than Marketing consultants, but many clients agree.

Sub-optimization rules

It is amazing how businesses resist learning from others. I see frequently that companies persist in reinventing the wheel - badly. Yesterday I was on a Delta Airlines flight. This airline boards by a large number of "zones" which seem to be assigned inorder of how much you pay for your ticket. American Airlines uses a smaller number of Zones, and while Zone 1 does consist of higher fare and premium frequent flyer members, the rest seem to flow in spacial sequence of seat assignments. Of course, Southwestm which manages to board planes faster than anyone, simply uses open seating and assigns groups by when you show up at the airport. There should logically be one solution which is best for a given profile of flight. Southwest may have a different one from an international carrier, but if two airlines are flying coast to coast, then one of the systems employed must be the best. Yet each airline invents its own.

Thursday, September 30, 2004

"The truth about..."

During this political campaign season, much information purporting to be the truth about some candidate or another has been disseminated. It seems that most of it has been successfully disputed by others. Have we lost touch with what the truth is, or is the truth so subjective that different people genuinely see it differently? Whether you are a George W. Bush or John Kerry supported seems to have an effect on your view of the world (or perhaps your view of the world forces youto support one or the other). Since no one person can know everything, does this mean that our selection of a candidate is inherently flawed? As in jury trials, I think that the theory is that the imperfections cancel each other out. The same applies to business or our personal life. Certainty is a powerful force in persuading others to support us, but some small measure of scepticism is useful in reaching the correct conclusion.

Sunday, September 19, 2004

In many fields some win by focus

Over the past weekend, The New York Times had stories about Barry Bonds as he hit his 700th homer, and Heather Locklear in her new role in the series "LAX." Examining the careers of these two apparently different people, it is clear that each of them has shown focus and determination. In their professions they face much public scrutiny, and so many lose their way. People wifh extraordinary talent can lose a sense of direction. This weekend, we also read about the arrest of Mcauley Culkin on drug charges. The career of Orson Welles exemplified that of a man with unusual abilities who never fulfilled his promise. We see so many with talent who never succeed and wonder why. While we cannot discount the place of luck - being in the right place at the right time - there are many who never take advantage of the opportunities which come their way. Furthermore, many people make their own luck.
Winning is not just a matter of being lucky or working hard. It comes from being thoughtful and focused. Focus is difficult to achieve as it requires abandoning some goals we may also have. Many gifted people have a wide variety of things which interest them and this can be an impediment to success.
The approach I recommend requires focus and strategy rather than simple hard work.

Wednesday, September 15, 2004

Optimal Thinking

The most important message I stress is that we are not victims, but can take control of our lives. No one should ever rely on luck or a deus ex machina to make them happy. That lottery ticket will not make you happy. That does not mean becoming Polyanna and ignoring all sad or bad events. We need to face and recognize negatives and weaknesses, but move beyond them in a positive way to explore all the possibilities. The book "Optimal Thinking" contains some excellent self diagnosis tests and processes to gain this ability. I heartily recommend it to all.

Sunday, September 12, 2004


Why do people procrastinate? By doing so, they give up responsibility for what happens to them. They lose control of an aspect of their destiny. If a job is worth doing, it is worth doing not only well, but also as promptly as it can be.
I see this is so often linked to a victim mentality. By delaying doing something, one can absolve oneself of responsibility. Sadly, this is not true. Inaction is a decision, and often the wrong one.

Saturday, September 04, 2004

Online Networking - no flip-flopping

I have been known to be simultaneously a proponent of online networking and issue warnings about it. To be clear, I am a believer in the potential for it and that the software is improving fast. However, I do caution people not to expect too much from it. The flaw in the system is more likely to be driven by human factors than by technology. People can be unresponsive, selfish, uncomprehending and incomprehensible. I do believe it will improve as more people become used to using it. For the younger generation, it will become second nature. One of the most useful resources on this topic is
In brief, I encourage everyone to use it, use it with energy and good judgment, but not to expect it to be a panacea.

Monday, August 30, 2004

Discontinuity creates opportunity

Most people fear discontinuity brought on by technology, legislation or competition. However, for many it provides great opportunity. It tends to be the biggest threat to dominating organizations, whether Ma Bell or Union Pacific Railroads, but to new organizations such as Charles Schwab or SouthWest Airlines, it can provide huge opportunity. As individuals also, it is threatening for those who are rigid in their thinking and do not continue to learn new skills. However, for many, not all young, it is a tremendous and exciting way to change ones position, job or even career path. The same applies to personal change too. Whether this is marrriage, divorce or relocation, the more open-minded will find opportunity in it.

Thursday, August 26, 2004

You need some distance to see things clearly

The biggest challenge for those who are trying to take a clear and objective look at our society, markets, politics and beliefs, is that we participate in them. As a result we observe it through a tinted pair of glasses. We are more likely to have clear vision if we have seen and participated in other societies. This is the principel behind anthroplogy - that an outsider can be a more accurate observer than a participant. Yet we continue to believe that we can interpret the society in which we live to others and ourselves. We need to understand that even a brief period of time spent in another country provides greater clarity, and living elsewhere for a while is the most useful thing we can do to appreciate and understand the culture where our roots lie.

Saturday, August 21, 2004

The social cost of inconsistent laws and regulations

When we see laws and regulations vary by geography, that teaches us that they are arbitrary and not necessarily based on facts or logic. When in one state, driving laws are different from the next, we learn that perhaps neither are correct. When regulators establish one set of rules for utilities in one state than in an other, we see that these too are arbitrary. For many people who see multiple laws and rules as based on whim or lobbying, they conclude that perhaps others are as well. In the end, this weakens respect for law and encourages people in their professional and personal lives, to skirt or break the law.
Unfortunately, most of the law-makers have not had the experience of living in multiple places and seen the absurdity of it all, and even less likely that enforcement officials have.

Thursday, August 19, 2004

How the more Walmart is attacked, the more successful it is

Increasingly, communities are fighting Walmart, or at least the people who run the communities do. Furthermore, the press, unions and others attack the company for paying too little, providing low benefits and treating employees badly. Yet customers continue to flock to Walmart. I believe that the more Walmart is attacked on these grounds the more consumers believe that it has the lowest prices. Consumers are not altruistic, if they see Walmart skimping pennies, they take it to mean that costs and therefore, prices, are low. The more Walmart is attacked, the stronger its brand positioning becomes.
Perhaps if unions and communities want to be successful in attacking it they need to point out ways in which Walmart does not provide value!

Sunday, August 15, 2004

Do we have to be victims?

As I scan the headlines, I see so many events in which the participants have not taken control over their environment. The headlines in the New York Times refer to the aftermath of a hurricane in Florida, the breakdown of truce talks in Iraq, and the destruction if children's lives in the Sudan. The essential randomness of these events is guaranteed to increase the feelings of insecurity so many people have. In turn, this paralyzes our ability to take the leadership role and shape our own destiny. It is critical that we all, move beyond these feelings and act to change our environment.

Tuesday, August 03, 2004

How the airline industry has got into trouble

It has been said that since its inception the airline industry has not, in aggregate, made money. We hear that "hub and spoke" systems are the answer, then we are told that "point to point" is the solution. As a student of airlines, both as an advisor and a frequent traveller, it seems that there is one other key difference between the traditional carriers and the new, low cost carriers in addition to investment or cost structure. The older carriers treat the work-force as primarily a cost, to be cajoled, browbeaten and suffered. The newer carriers regard the work force as a marketing tool which can create or destroy customer satisfaction and loyalty. The ex-CEO of Scandinavian Airlines, Jan Carlson, who coined the phrase "moments of truth" to describe the times when a member of the work force was face to face with a customer. Yet, the airline industry has never internalized this fully.

Monday, August 02, 2004

Change is inevitable

For most people change is uncomfortable. We belive that if things chance we will somehow lose by it. Yet if we look back we see that change is inevitable and by welcoming it, we can prosper. When whale-hunting was clearly starting to drive their numbers down in the 19th century, it actually provided opportnities for many. Oil companies were formed to replace whale oil lamps with kerosene lamps, whalebone stays were replaced by stays made from processes turkey feathers. Fortunately for the whales, this made need for whale hunting obsolete. Yet just as this made the skills of so many people obsolete, we complain when we see skills of today made obsolete. Hard as it is, change is inevitable, and we can either reisist it and fail, or welcome it and put ourselves in the vanguard. Every change allows people and institutions that were not in the forefront to become movers and shakers. Not only Bill Gates and Steve Jobs, who helped to invent the future, but so many who are unsung, took control of change.

Friday, July 30, 2004

When politicians become "statesmen", scientists, discoverers.

Following the Democratic National Convention, it reinforced for me that while one can become a successful politician by following the polls and the focus groups, the man or woman who does this in our "first past the post" system has to minimize real conviction. The people who have made the biggest impact on the political world have not compromised on their convictions even though it may have meant for Lincoln or Churchill that for a long time failure followed failure. Whether you are Ghandi or Margaret Thatcher, the singleminded pursuit of your ideals is the way to reshape the world. It is important to differentiate betwen popularity and success. Focus groups cannot tell you how to believe. Whether in life, politics, science or business, conviction is critical. On July 28th, Francis Crick, co-discoverer of the structure of DNA, died. Now, like most of the scientific greats, "experts" kept telling him and Watson that they were wrong. However, convinced of the truth of their convictions, they went on and were ultimatley proved right.

For the rest of us mortals also, we do ourselves a disservice by allowing ourselves to do or think that which is popular. If we do not challenge conventional wisdom, we can make no progress.

Pass it on...

I have always wondered why more people do not help each other. It surprises me that evenwhen someone has the opportunity to help another, and can do so without effort, time or cost, so many do nothing. I have come to the conclusion that subconsciously, at least, most of us think ot life a s "zero-sum" game and therefore, if someone else has good fortune, somehow there is the potential that bad luck will come the Good Samaritan's way. Of course, nothing could be further from the truth. Good fortune grows as it spreads. You get more control by being considerate than by being unhelpful.

Thursday, July 29, 2004

Yes, you can take Control

Many people see themselves as passive victims. Sometimes it certainly feels like we are. However, I have been constantly struck by how many people have taken control of their lives or their businesses and shaped them around a vision. While there often does not seem to be a common thread connecting these people, there is. These people share a belief that they can have an impact on the world. Doubting oneself is a handicap. Belief and visualization only of success is empowering. Seeing this over many years of my career, I wrote a book: How to Get What You Most Want in Life, and decided to spread the word on my website: I will be posting further thoughts which go beyond my book and observations on life and business over times to come.