How can we trust people who will tell us what they think we want to hear?

Many people fear upsetting others, or perhaps fear their anger. It does not matter which. If you have a peer, a subordinate, or someone important in your personal life who does this, watch out. People like these will get you into trouble. Eventually, they will withold some key information from you because you will be upset by it. Then you will make a wrong decision, and you will be hurt far more. Expect everyone around you to tell you the truth, and make sure you do not punish them for telling you what they believe to be true, even if it turns out to be wrong. You need to hear it.

Also, be one of the people who is open and honest with those around you. Do not allow someone to make a poor decision because of lack of information.

Cultural differences we do not see

Ethnocentricism blinds us to differences. It is to some extent obvious that Americans are different from Chinese or Indians, though we often fail to see them accurately, or the similarities. However, we are particularly poor at recognizing differences between nations and cultures with much in common. For example, while the majority of people in the US believe in God and practise a religion (usually Chirstianity), in the UK, a Guardian poll a month ago showed that 82% believe that religion does more harm than good, and 63% describe themselves as not religious. This has a huge impact on many of the activities of daily life. So much in politics, education and business reflects implicit beliefs, that a culturally different underpinning will change how people live.

Some companies are completely clueless

I have written before about how people do not know what they do not know. One interesting example is Indymac Bank's expansion of retail banking. In a market which is becoming eincreasingly competitive, they have decided to expand their retail banking presence. However, in a classic expression of "build it and they will come," the new branches are undifferentiated and all but invisible. They have failed to learn from the existing leaders in the marketplace and do not seem to even know how weak their "stores" are.

Conflict avoidance is not conflict resolution

If there is a disagreement, it does not go away if you simply do not address it. Often, taking the bull by the horms results in a solution and agreement which is far easier than you imagine. Avoiding it is likely to make it worse.

Managers leave money on the table when they ignore Brand Value

Brand Value represents a large part of the value of a company. In the case of a consumer goods or service business, it may exceed all other constitutents combined. In the case of a Business to Business company, it may be less important, but may still be well over 10-20% of the value. Yet, top management frequently does not act as though it is so critical. Some Private Equity firms now understand this well, paying a premium for a strong brand, and focusing on building the brand. However, most specialized turnaround management experts do not yet understand it, and have even less idea of how to manage it.

We fully expect this to change in the next few years. Managers will come to realize that a brand is valuable and can be made even more so.

So what does Target do right?

It is not easy to put your finger on why the companies which do things right, get them right. I ascribe it to a closeness to the market, a sort of finger tip sensitivity and identification with the consumer. This does not mean that management has to be the same as the target market, but it needs to have a humility in listening to the market. As soon as a company thinks it has cracked the code and can do no wrong, it starts to falter. This is very difficult to reverse, as panic starts to set in. Toyota gets it right, GM does not. Toyota, while prospering, constantly is thinking of ways to do better. BMW does the same, while Ford allowed itself to become complacent. In retailing, Sears and A&P were behemoths standing astride their markets, until they started to take their consumer for granted. The old IBM did the same, and it took an outsider to the industry to change and save it.