If you don’t have time to read this, read this

Each month, When Growth Stalls examines why businesses and brands struggle and how they can overcome their obstacles and resume growth. Steve McKee is the president of McKee Wallwork + Co., an advertising agency that specializes in working with stalled, stuck and stale brands. The company was recognized by Advertising Age as 2015 Southwest Small Agency of the Year. McKee is also the author of “When Growth Stalls” and “Power Branding.”

SmartBrief offers more than 200 newsletters, including SmartBrief on Leadership and newsletters for small businesses and marketers and advertisers.

Remember when you were in grade school, and you’d stare at the clock on the wall hoping, wishing, the hands would move? (If you’re too young to remember analog clocks, just play along.) Time passed slowly, interminably, especially during mandatory reading time. Ugh. This. Day. Will. Never. End.

The older we get, the more we realize that school does, in fact, end, days do go by, and time even flies. It’s a realization borne of experience and maturity -- and science, believe it or not. James Broadway of the Department of Psychological and Brain Sciences at the University of California, Santa Barbara, and UC Santa Barbara graduate  Brittiney Sandoval say, “From childhood to early adulthood, we have many fresh experiences and learn countless new skills. As adults, though, our lives become more routine, and we experience fewer unfamiliar moments. As a result, our early years tend to be relatively overrepresented in our autobiographical memory and, on reflection, seem to have lasted longer.”

Well, there you go.

Despite that, we still can’t see the hands on the clock move. But what if we could? What if, through some shift in the time-space continuum, the minute hand suddenly started moving like the second hand? How would we react?

Third-graders being asked to memorize their multiplication tables (do they still do that?) would probably be thrilled, but I’m guessing the rest of us would panic. Especially at first. “There already aren’t enough hours in the day!” we’d exclaim. “Not I’m never going to get it all done!” we’d complain. “It’s all coming at me too fast!”

Once we catch our breath, however, I believe another thought might settle in: A powerful sense of prioritization. We simply wouldn’t be able to allow the urgent to crowd out the important. We’d realize how little we can actually get done and would more intentionally focus on that which would make the most difference. And in an odd way, we might even become sanguine about our lives. Coming to terms with the fact that we can’t do it all, we might re-evaluate our priorities and be at peace focusing on what’s most important.

Guess what? This isn’t just a metaphor. Time really has sped up, at least in terms of the economy. Every business, every industry is moving through the stages of disruption, acceleration, maturation, saturation and commoditization ever faster. At the end of this “Disruption Cycle” comes innovation (sometimes) or obsolescence (often). Those companies and industries that anticipate the future and adjust accordingly begin a new loop. Those that don’t, flop.

For most of the 20th century, the Disruption Cycle turned slowly, imperceptibly, like the hands on a clock. It moved so slowly that people could spend an entire career within one cycle. They didn’t even realize it was happening. It manifested itself in having one job (or at least one career) for life.

With the advent of the technological revolution, however, it became not uncommon to experience multiple Disruption Cycles over the course of a single career. In the retail world, for example, brands today have to reinvent themselves faster than ever. Gap has found itself on the downslope of late, about which one analyst quipped, “While the market is moving forward, Gap is, at best, standing still.”

Once high-flying H&M is also in the doldrums as it struggles to match the distribution muscle of online retailers, the pricing appeal of aggressive discounters and the product iteration of competitors with faster and more flexible sourcing models.

Speed
Credit: Unsplash

More broadly, some consider the advent of artificial intelligence as a death sentence for entire classes of workers. I am not in that camp. I don’t believe AI will make humans obsolete for the simple reason that time and money have always been in limited supply. The more of each that are returned to us because of technological advances, the more we will be able to reinvest them in meeting as-yet-unmet needs and wants -- two things of which human beings will never run out.

After all, there are more jobs today than ever before in human history because there are more humans than ever before. That means more wants, more needs and more human ingenuity that is being applied to both.

But that doesn’t mean we don’t have issues. The rise and fall of industries has always resulted in worker displacement, from horse-and-buggy-whip makers to typist pools. In past ages, however, business models became outmoded slowly and sporadically, allowing the gradual reabsorption of displaced workers into new occupations. For most of human history, sons and daughters almost invariably followed in the occupational footsteps of their fathers and mothers. Today, however, none of our careers are safe from rapid obsolescence -- perhaps more than once over the course of our working lives.

I was leading a seminar about this recently and was struck at how readily the participants nodded in agreement. They, like me, can almost feel the breeze of the Disruption Cycle as it spins us around like a turbocharged Ferris wheel. Yet when I asked these professionals -- who were all in senior management -- what strategies they were implementing to stay ahead of the inevitable, all I received in return were blank stares. I couldn’t tell if it was fear, nausea or a flashback to third grade when they could bury their heads in their hands and make the world disappear. Whatever the case, denial won’t do.

What will? Well, a little panic is understandable. But once you realize how unproductive that is, better to reflect and reprioritize. Better to think a step (or two) ahead and anticipate the coming disruptions. Better to be the disruptor rather than the disruptee.

For the first time in history, it now does pay to keep our eyes on the clock. The sooner we realize those hands are spinning with increasing velocity, the better and more nimbly we can anticipate change and respond to it -- or even lead it. We may have all graduated from grade school, but the test-taking never ends. And in this economy, there’s no grading on the curve. It’s pass/fail.

Why employment branding doesn’t work — and what you should do instead

The U.S. unemployment rate is at an 18-year low. There are more job openings than there are eligible workers to fill them. Employers face rising labor costs amid stagnant productivity. It's no wonder that many companies have prioritized employment branding as a critical talent strategy.

Employment or employer branding -- efforts to promote a company as desirable employer -- has grown as a means for attracting employees and competing in the current war for talent that rages in many sectors. Many companies have developed elaborate positioning strategies and communications campaigns to recruit prospective employees. But many employers also struggle to determine the most effective employment branding approaches, and many of their efforts fail to attract the type and quantity of candidates they seek.

Most employment branding approaches don't work because they aren't aligned and integrated with the company's customer brand strategy. Companies usually assign HR executives to develop the organization's employment brand and, not surprisingly, these managers take a narrow talent-centric approach.

Typically, they try to discern the messages that would appeal most to desired candidates and develop recruitment campaigns to promote them. These efforts often try to woo recruits with promises of an uplifting workplace culture, attractive perks and benefits, and lots of career potential. But these appeals turn out to be ineffective because they have nothing to do with core brand identity the company uses to engage customers.

An employment brand that is disconnected from a company's "customer brand" produces challenges and consequences, not the least of which is confusion and skepticism among its audience. That's because, in many cases, a company's customers and prospective employees are one and the same. This is true not only for retail companies, whose best employees are often customers first, but also for: a technology firm whose user base is people with the specific skills and interests the company needs to develop its products; an agency or professional services firm that recruits industry insiders; and other companies that operate in partner ecosystems.

If an organization is promoting values and experiences for employees that are out of sync with what customers know about it, people will doubt the company's focus, authenticity and integrity.

Developing an employment brand solely through the lens of talent attraction also usually leads to a gap between what prospective employees experience during the recruiting process and what they eventually experience as employees. This experience gap leads to high levels of employee disappointment and dissatisfaction, which, in turn, leads to high turnover and poor reviews on employment sites like Glassdoor.

When recruitment efforts aren't grounded in the cultural foundations, competitive aspirations and business priorities that drive the majority of the company's efforts -- in other words, its brand strategy -- they're misleading and wasteful.

These efforts also end up promoting the wrong aspects and painting an incomplete picture of the company and workplace. HR managers try to devise perks and offer benefits that they believe will motivate prospective employees and then make them the focus of their recruiting efforts. Or, employment branding campaigns promote the company's philanthropic activities and employees' involvement in its corporate social responsibility efforts.

But employees generally judge the former as nice-to-haves. And, while the latter might make people feel good about the company, both fail to convey what most people care about: the reality of their day-to-day work and how that connects to the core mission of the company.

What's in it for me?

Ultimately, the problem with employment branding is the concept itself. It suggests a separate standalone effort. Instead of developing a disconnected employment brand, you should have a sole brand identity that you interpret into different but related value propositions and experiences for customers, recruits, employees, and other stakeholder groups and audiences.

For example, when I headed up brand and strategy at Sony Electronics' US business, we articulated that the core of our brand was about "creating technologies that inspire people to dream and find joy." We then interpreted that core identity in our marketing efforts to show how our products inspired customers, and HR applied that same identity in its recruitment efforts for employees by relaying opportunities to do inspiring work and to pursue their dreams.

We did the same with our brand values, which included, "We do what others don't," helping customers see the uniqueness of our products and helping employees see the opportunity to do unique work in a unique style. By integrating and aligning our employee and customer efforts with a single core brand identity, we appealed to the desires of both groups to be a part of something with a higher purpose and ideals.

Once you ground your talent attraction efforts in the core of your brand, use talent strategies and approaches similar to those you use to engage customers with it. Ensure your outreach is focused on those you are recruiting and their needs and wants, not on your company.

Too often, employment branding takes on a form of corporate chest-pounding, with companies running campaigns that showcase their awards and achievements and promote how terrific they are. But just as customers are attracted with appeals that put them at the center and make them feel like smart and savvy shoppers, employees are more likely to respond to messages that highlight the importance of their skills and contributions and make them feel like heroes. Now more than ever, employees judge potential employers through the filter of WIFM -- what's in it for me.

Also instead of or in addition targeting prospective employees by job or function, consider a more consumer-like segmentation. By grouping them into segments based on their values, aspirations, needs, and lifestages and lifestyles, you will be able to develop your appeals to resonate more deeply and target your tactics more efficiently.

Perhaps the best way to ensure your recruiting efforts are on-brand is to forge a tight integration between your HR and marketing groups. HR managers would learn how your company's brand identity can be used to attract employees by showing how different jobs and work contribute to the value that customers receive. HR can also learn from marketers' experience in developing targeted, emotionally resonant and differentiating campaigns and messages.

Plus, both groups can benefit from enrolling existing employees to advocate for the company to prospective employees and customers -- and coordinate their efforts to do so.

Prospective employees bring a certain consumerism to their job searches these days. You need to be strategic and savvy about how to attract top talent, but employment branding is not the answer. Your core brand identity and on-brand strategies and approaches are.

 

Denise Lee Yohn is the go-to expert on brand leadership for national media outlets, an in-demand speaker and consultant, and the author of the bestselling book "FUSION: How Integrating Brand and Culture Powers the World's Greatest Companies."

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Mid-split devices enable 5-85MHz and align with DOCSIS, MoCA

This post is sponsored by Antronix.

The 5-42MHz return band has historically been the upstream standard for cable operators, but subscriber demand for streaming and other services requires a substantial improvement of existing upstream data capacity.

“While growth of upstream data traffic has not quite kept the same pace as downstream traffic, it is growing far beyond the current capacity of HFC DOCSIS networks,” Antronix President Neil Tang said. “[Upstream capacity] will need to expand significantly to approach expected demand as peer-to-peer content, IoT, video conferencing, interactive, and other services become more relevant.”

 

Expanding the spectrum

A 5-85MHz bandwidth expansion project is one way service providers can expand system upstream capacity.

“An increase in the mid-split crossover point between the upstream and downstream adds more upstream spectrum, and allows for higher order modulation,” said Richard Gregory, an applications engineer with Antronix. “An 85MHz upstream split can support legacy DOCSIS 3.0 signals and/or also DOCSIS 3.1 OFDM signals.”

One challenge with the 5-42MHz spectrum is unpredictable interference from shortwave radio signals, communications-band radio signals, electrical lighting, electric motors and more. The higher frequencies of the mid-split contain the noise and interference from the lower levels, reclaiming even the lowest end of the return spectrum.

“Generally speaking, 5-15MHz is considered no man’s land due to the noise and interference that is common at these low frequencies,” Gregory added. “With DOCSIS 3.1 supporting multiple modulation profiles, the 5-15 MHz portion of the return spectrum can be reclaimed by modulating signals in this region at a lower modulation rate.”

 

Making the business case

The mid-split option is a cost-effective capital expenditure that enables service providers to meet subscriber expectations on a basic level.

Deploying mid-split technology may, in some cases, require a few plant modifications including new CPE equipment, on top of reallocation of bandwidth and access network modifications. The move also involves new diplexers in nodes and amplifiers.

A MoCA-enhanced VoIP residential amplifier mid-split is a central hub solution for the physical connections in subscribers’ homes. It reduces installation complexity, supports DOCSIS mid-split expanded bandwidth applications and ensures maximum data rates for MoCA -enabled devices.

“The device is also consistent with a home network solution where MoCA and enhanced DOCSIS 3.1 coexist for an optimal in-home network architecture, which is becoming more heavily reliant on streaming and native content services,” Tang said.

The time to begin these enhancements is now, Tang asserted.

“MSOs will require far more substantial modifications to their upstream performance offering in the coming years…to keep pace with ever increasing data demand in the upstream path,” Tang said. “A move to a mid-split 5-85 MHz upstream band - with the additional benefits of DOCSIS 3.1 higher order modulation - will improve spectral density and enable more capacity over existing spectrum.  This will be just the beginning of a series of upgrades that will eventually enable symmetrical gigabit performance over existing HFC networks.”

 

What if you are the lead dog?

Each month, When Growth Stalls examines why businesses and brands struggle and how they can overcome their obstacles and resume growth. Steve McKee is the president of McKee Wallwork + Co., an advertising agency that specializes in working with stalled, stuck and stale brands. The company was recognized by Advertising Age as 2015 Southwest Small Agency of the Year. McKee is also the author of “When Growth Stalls” and “Power Branding.”

SmartBrief offers more than 200 newsletters, including SmartBrief on Leadership and newsletters for small businesses and marketers and advertisers.

You’ve heard it a thousand times: “If you’re not the lead dog, the view never changes.” As pithy as that sounds, it’s true, and it offers the encouragement we all occasionally need to step up and break out of the pack.

But what if you are the lead dog? No one ever seems to talk about that.

Sure, the view changes when you’re out in front. But it’s not all sunshine and packed powder. The lead dog gets to bear the full brunt of the wind, snow, sleet, near-zero visibility, uncertainty about which way the sled is heading, and second-guessing of the rest of the team.

A case in point:

  • “[We] had never done anything this massive before.”
  • “It was all new. I was so nervous about it.”
  • “It was so cumbersome it was like ‘this is never going to work.’”
  • “This isn’t good enough. This is not good enough.”
  • “That team worked 168 hours a week for two weeks. They never stopped.”
  • “Our reward...was to kill ourselves over the next two-and-a-half years.”
  • “If we would have known then what we know now...we would have done this differently and this differently and this differently.”
  • “It’s a roller coaster ride. And if it ain’t scary it ain’t fun.”

Those are a handful of quotes from the “lead dogs” responsible for developing the iPhone, recounting what it the process of invention was like. We’re so used to companies like Apple leading the way that we may assume it’s second nature to them. Not true. They know that victory can be perennial but it’s never permanent; just ask Budweiser, Mattel and McDonald’s, three longtime industry leaders feeling the effects of inevitable decline. Apple’s turn is coming soon.

For those who head up the seven out of 10 companies who (according to our research) are experiencing healthy growth, it’s not so bad being the lead dog. They can see where they’re going. They’re making good progress. They’re running in stride with their team and outpacing their competitors. But inevitably for them, and painfully immediate for the other 30%, comes a slog -- a long, hard, sometimes blinding and often frightening slog. 

My firm specializes in working with struggling companies in need of a turnaround, and many of the leaders we work with would love the predictability of bringing up the back. But they can’t choose the timing of their trials. Circumstances have forced them to choose a new direction where the right direction isn’t readily apparent. They have to set and maintain a workable pace for an uncertain trek. And they must stay focused despite the chaotic and incessant barking of the dogs behind them.

We’re working with a CEO who is doing all of that and more as he oversees the rapid and dramatic evolution of his company’s business model. His organization had been in the distribution business for several decades, enjoying many years of steady, stable success, financing its growth with debt.

But then the Great Recession hit. Orders ground to a halt. Employees were scared and confused. Management was shell-shocked. Cash flow was rapidly heading in the wrong direction while the debt continued compounding. The company went through as close of a near-death experience as I’ve ever heard of.

Somehow, the company made it through, refinancing its debt as things slowly started to improve. But the recession lingered on, and the industry changed. The company was no longer as relevant as it once was. Its value proposition was in decline. Having worked so hard to save it, the CEO now has to reinvent it. Not so easy to be the lead dog there.

Another client is a manufacturer in a rapidly commoditizing industry, dealing with rising costs of raw materials and uncertain trade policy, among many other challenges. Its “lead dog” has developed a bold vision to transform the organization, but the pathway there is anything but obvious to him or his team. Sometimes they come to a clearing and it’s easy sledding. Sometimes they’ve run into a snowdrift. A few times they’ve nearly tumbled into a crevasse. It looks like this company is going to get where it needs to go, but it has required an immense amount of vision, courage and perseverance.

Speaking of Apple, The Wall Street Journal published a rare and revealing recording of Steve jobs trying to explain the revolutionary impact of the App Store to a reporter just 30 days after it had launched back in 2008.

Today, it’s easy to appreciate how game changing it actually was. But back then, Jobs saw something others didn’t; you can hear it in his voice as he strains to convince the reporter of its significance. Lead dogs are often lonely, even when they’re right.

Ever tried to raise money for a startup? Create a prototype? Change a policy? Launch a product? Turn a company around? Reinvent an industry? We’re all lead dogs -- or need to be.

As a lead dog myself, I can testify that it does beat the view never changing, and I take comfort in the fact that, as in all things in life, there’s a wiser being who’s really in control of the reins. Still, it can be as exhausting as it is invigorating to run ahead of the pack. Sometimes you just want to take a nap.

Decision-making 101

Executives are hired to make decisions. As such, it’s a topic worthy of study.

Evaluate your assumptions. Before you can move ahead, you need to know where you stand. What is prompting you to make a decision? What is the basis for your thinking?

Consider the alternatives. Knowing your assumptions, what choices do you have? Why would you pursue those choices? Sometimes there are not good alternatives. For example, shutting down a plant or laying off people. Neither is good, but one solution might be better for the health of the organization.

Game-plan the possibilities. When time permits, you can narrow your options to one, two or three choices. Consider what happens in each instance. It’s a bit like stacking dominoes.

Make a decision. Leaders are judged by their decisiveness. When an executive wavers over a major decision, the organization remains in stasis. Nothing happens. Therefore, a leader must choose what do it and why to do it. Next, the leader must communicate that decision widely so everyone knows what happens next.

Only the future will determine if a decision made today was the best choice, but when a leader makes time to think, that is all you can ask.

John Baldoni is an internationally recognized leadership educator and executive coach. In 2018, Trust Across America honored him with a Lifetime Achievement Award in Trust. Also in 2018, Inc.com named Baldoni a Top 100 Leadership Speaker. Global Gurus ranked him No. 22 on its list of top 30 global experts, a list he has been on since 2007. In 2014, Inc.com named Baldoni to its list of top 50 leadership experts. He is the author of more than a dozen books, including his newest, “MOXIE: The Secret to Bold and Gutsy Leadership.”

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Are you an innovation skinny-dipper?

Lead Change is a leadership media destination with a unique editorial focus on driving change within organizations, teams, and individuals. Lead Change, a division of Weaving Influence, publishes twice monthly with SmartBrief. Today's post is by Chip R. Bell.

 

I grew up in the rural South. Most every farm had a pond created for water for cows, especially during a dry spell. It was often the water source for irrigation and the recreation source for fishing and swimming. When a group of boys gathered at a pond with an “I dare you” mentality on a summer day, the challenge to skinny dip was never far away.

Typically, all ultimately participated. But, the ones to strip off first and head for the water were considered the pacesetters. It had little to do with anatomical pride; it was an attitude of adventure and courage.

We live in a time when incremental improvement will not suffice to retain competitive advantage. Winners are the innovators willing to take risks and boldly go beyond what peers are unlikely to even try. It is not foolhardy recklessness like jaywalking on a busy street. When Elon Musk launched a Tesla roadster into space, it was symbol of bravery. When Tim Cook lead Apple’s launching of the Apple Watch, it was less about what the watch actually was and more about a gallant vision of what the watch could become—a wearable portal to practically every facet of life!

One of my favorite innovator stories is skinny-dipper Samuel Colt. Sam grew up on his grandfather’s farm. One of young Colt’s chores was taking a horse and wagon into the shipbuilding town of Glastonbury, Conn., for supplies. On one trip, Sam listened to soldiers rave about the prowess of the double-barreled rifle, boasting the impossibility of anyone ever devising a firearm that could shoot more than two times without reloading.

It was a watershed moment for the 12-year-old Colt, who vowed to become the person who would craft an “Impossible gun.”

Pursuing that childhood dream, he created a pistol (the Peacemaker) that could shoot six rounds successively without reloading. With an order from the Texas Rangers to quickly produce 1,000 pistols, he realized the “one-at-a-time” artisan approach to gun making would never work. However, a pistol with interchangeable parts would be more efficient and help him realize his dream of an assembly-line process for greater productivity.

He wrote to his father in 1836: “The first workman would receive two or three of the most important parts and would affix these and pass them on to the next who would add a part and pass the growing article on to another who would do the same, and so on until the complete arm is put together.”

Henry Ford in 1913 reasoned that Colt’s two concepts (interchangeable parts and assembly line production) could be a way to provide automobiles for the masses. He improved on the process by making it movable. It became the factory operation approach for all industries. With the advent of railroads and the availability of labor, especially immigrant workers, America quickly became the industrial capital of the world, exporting goods cheaply due to efficiencies gained by mass production.

We can thank skinny-dipper Sam for starting a chain reaction that today produces smartphones, IBM's Watson technology and Tesla electric cars that can accelerate as fast as a Ferrari!

“Life is either a daring adventure or nothing,” wrote Helen Keller. “To keep our faces toward change and behave like free spirits in the presence of fate, is strength undefeatable.”

Let go of your anxiety of being rebuked, the concern for potential failure and the challenge of going unclothed into ambiguous waters. Surface your inner bravery and dive into the waters of uncertainty to confidently swim in the pond of innovation.

 

Chip R. Bell is a keynote speaker on leadership, and customer loyalty topics, as well as trainer and best-selling author. He has worked with a range of Fortune 500 companies, associations, and government organizations. He’s also authored several best-selling books, including "Mangers as Mentors," with Marshall Goldsmith. Visit his website.

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Why you (and GE) are feeling dizzy

Each month, When Growth Stalls examines why businesses and brands struggle and how they can overcome their obstacles and resume growth. Steve McKee is the president of McKee Wallwork + Co., an advertising agency that specializes in working with stalled, stuck and stale brands. The company was recognized by Advertising Age as 2015 Southwest Small Agency of the Year. McKee is also the author of “When Growth Stalls” and “Power Branding.”

SmartBrief offers more than 200 newsletters, including SmartBrief on Leadership and newsletters for small businesses and marketers and advertisers.

After more than 100 years as one of its cornerstone members, General Electric was just drummed out of the Dow Jones Industrial Average. It was a good, long run. The longest, in fact, of any organization in history.

General Electric was one of the original corporations tracked by Dow Jones when it created its “Industrial Average” al the way back in 1896. But like American Tobacco, National Lead, and Tennessee Coal and Iron before it, GE’s role in the economy has become something less than it once was.

Corporate membership in the S&P 500 tells a similar tale: Five decades ago, the average tenure of companies in the index was 33 years. Two decades ago, it was 20 years. Over the coming decade, it's forecast to shrink to 14 years. What’s going on? The business cycle -- disruption, acceleration, maturation, saturation, commoditization, disruption again -- is spinning ever faster.

A Deloitte study of the UK census discovered that telephone and telegraph operators enjoyed a full century of growth before jobs began to decline. Similarly, a Harvard Business Review analysis of how many decades it took various 20th-century innovations to mature noted that it took 64 years for telephones to reach 40% penetration. By contrast, smartphones achieved the same result in a single decade (by then telephone and telegraph operators had all but disappeared).

That’s why we’re all feeling a bit dizzy. The disruption cycle continues to gain velocity. Business models that once lasted for decades can now become irrelevant in one or two. Just 20 years ago in my industry, for example, digital agencies were hot growth companies. Advances in technology have already put them on the ropes.

In industry after industry, companies with whom we consult find themselves facing a new normal. Call it continuous disruption, as oxymoronic as that sounds.

A few years back, my firm worked with a brand that was struggling with long-term changes in consumer behavior that were making it less relevant every day. We identified an opening that would enable the company to rapidly but sensibly change its offering to lead the evolution of consumer tastes rather than fighting it. The management team’s response? Nah. It required too much mental energy. The company is now defunct.

The mandate to embrace continuous disruption is as real as it is difficult to accept. Just the other day, I ran into a CEO whose retail operation is going slowly, inexorably, out of business. The crazy thing is, he knows it. He also knows a pathway to resurgence that has a pretty good shot of working, but he can’t bring himself to pursue it. It involves too much change, too fast.

Tragic tales such as these offer valuable lessons. If we accept the reality of continuous disruption, we’ll be better able to regularly refresh our relevance. If we don’t -- if we get stuck in our ways and became too comfortable with old, familiar business models -- we’ll end up like those that went down before us. By the time we recognize the urgency of our situations, we won’t have the energy, the courage and -- likely -- the resources to pull it off.

To its credit, GE is belatedly but boldly trying to respond to the forces of disruption by pursuing new CEO John Flannery’s aggressive $20 billion divestiture plan. The company has already shed its locomotive manufacturing operation and its healthcare IT business, and, in what might be the most poetic move of all, may be looking to exit the light bulb business. 

Think about that. GE -- a brand as synonymous with the light bulb as any -- will soon quit making light bulbs. The company already stopped manufacturing incandescent bulbs a few years ago in favor of longer-lasting and more efficient LEDs. That was a courageous decision for an organization so identified with such an iconic product. And it was equally impressive that a technology not invented until the 1990s could have caused such a disruption.

Speaking of 1990s inventions, do you know what the number one US television network is? Here’s a hint: it began as a mail-order DVD rental service. According to Turner Broadcasting, when measured by “gross streaming hours,” Netflix outperforms all other TV networks. That’s one reason why both Amazon and Apple have joined the chase and are spending billions of dollars developing original video content. ABC, CBS and NBC never saw it coming.

GE. The incandescent bulb. Traditional TV networks. They all had a pretty good run, wouldn’t you say?

But sometime over the past few decades, something fundamentally changed. The cycle sped up. Disruption became the norm rather than the exception. Today, industries are born, thrive and decline over a shorter time span than the average professional’s career, which explains why this generation has a lot less job stability.

It’s tough to keep business going in an industry when the industry itself can’t stay in business.  But like the jet engines that GE continues to manufacture, wear and tear (not to mention fuel inefficiency) mostly occur during takeoffs and landings. Once a plane is flying, it requires a lot less effort and energy to change course.

That’s an instructive metaphor. The days when change happened in decades-long fits and starts are long gone, but it doesn’t mean we can’t adapt. Once we recognize what’s happening, we can adjust to it. Our task is to stay aloft by refueling in mid-air.

 

Steve McKee is the president of McKee Wallwork + Co., an advertising agency that specializes in working with stalled, stuck and stale brands that was recently recognized by Advertising Age as Southwest Small Agency of the Year. He’s the author of When Growth Stalls and Power Branding.

 

 

Should You Charge More for Your Business or Service?

Resist the urge to sell your product or service short.

How broken is your business model?

Each month, When Growth Stalls examines why businesses and brands struggle and how they can overcome their obstacles and resume growth. Steve McKee is the president of McKee Wallwork + Co., an advertising agency that specializes in working with stalled, stuck and stale brands. The company was recognized by Advertising Age as 2015 Southwest Small Agency of the Year. McKee is also the author of “When Growth Stalls” and “Power Branding.”

SmartBrief offers more than 200 newsletters, including SmartBrief on Leadership and newsletters for small businesses and marketers and advertisers.

Hasbro recently reported a double-digit decline in revenue and a big internal overhaul. That followed Mattel’s news that it will be hiring its fourth CEO in as many years as it also tries to overcome slumping sales. Why are the behemoths of the toy business in such trouble? Because their most significant historical distribution channel, Toys R Us, declared bankruptcy.

Why did Toys R Us declare bankruptcy? Because of Amazon.

It’s true that other factors contributed to the decline of all three companies, including an ill-timed leveraged buyout that loaded Toys R Us with debt. But it was the advent of e-commerce in general, and Amazon in particular, that is dealing the heaviest blow. Toys R Us’ demise means that Hasbro and Mattel must find a way to adjust to the same distribution dynamics that a year earlier felled Sports Authority and caused Whole Foods to wave the white flag.

While the winds of change have always been unrelenting, never before have they created such noticeable gusts. We feel them in the marketing consulting business; for example, Google, Facebook and their ilk rapidly continue to sweep up ad dollars that used to come our industry’s way, causing a permanent shift to which firms like mine must adjust. I suspect you feel the breeze in your business as well.

In research we conducted this year, a plurality of corporate leaders confessed to unprecedented difficulties in managing (and even understanding) what’s happening to their businesses, with more than four in 10 going as far as to say they need an entirely new business model. It was especially true of companies whose growth is slowing and/or who are struggling with the “Amazonification” (nee: commoditization) of their industries.

Clearly, this is no time to be complacent. Because there is no time to be complacent. It’s all happening too fast.

Corporate strategy used to largely focus on carving out a defensible competitive position within an industry. Today it’s not enough to think in terms of the niche alone, or even of the industry. It really is a question of business model. As one of my partners recently quipped, we’ve got to stop defending the gates and focus on building the tower. We have to be willing to sacrifice branches to save the tree.

We must become the destructor rather than the destructed. It’s on us to question everything about the business proposition we’re putting forth into the world, granting no quarter to sacred cows.

For example, as Hasbro and Mattel face what amount to existential challenges, what business model, exactly, should they be pursuing? To the casual observer, they both look like toy manufacturers. Is that what they really are, or should remain? Are they toy developers? Toy market-makers? Are they in the business of play? Entertainment? Education? Should they pursue vertical integration? Disintermediation? Cooperation?

These are deep and consequential questions, and the more of them they explore, the more additional ones may surface, at least for a time.

Which leads to the question for you: How broken is your business model? If you say “not at all,” I say you’re probably not paying attention. You may be out in front of your competition, but these days you’re less likely to spot them in the rearview mirror as you are darting out from a side street, arising out of the dust or dropping from the sky. We’re now in a “butterfly effect” economy in which a shift in one business model can affect all others.

Most leaders I know don’t have their heads in the sand; they have some sense of where their business model is being threatened, up to and including obsolescence. That’s a good sign. To paraphrase Samuel Johnson, nothing focuses the mind like the sight of the gallows. But most also struggle with what to do about it.

That expertise, in fact, is the “tower” my company continues to build. Ironically, our changing business model is to help other companies identify and leverage their changing business models. It’s nothing if not relevant to the times.

There’s a cliche that says every family is dysfunctional in its own way. Similarly, every business model is broken -- or breaking -- in its own way. If you’re feeling the marketplace shifting under your feet, you’re not alone. Nothing, it appears, is beyond disruption or off limits to the forces of creative destruction. Not to pick on Amazon, but the company just announced it’s going to start delivering packages straight to the trunk of our cars, for crying out loud.

So yes, every company should ask itself, “How broken is our business model?” But there’s a second, more important question: “How might we break someone else’s?” All it takes to transform threat into opportunity is the proper mindset.

Whatever the case, don’t ignore the very real (if sometimes imperceptible) likelihood that your business model is becoming obsolete. Even if your company is cruising along, someone or something is coming after, hovering over or undermining it.

Don’t let data trick you if you want to create a new future

I want to begin by saying I don’t believe in judgment calls. Or, better said, I don’t believe that when we make judgment calls, we are judging with our guts. No, I believe that what we call “judgment calls” are just decisions where factors other than facts and past evidence are considered in the decision-making process.

What we should be asking is: When do we allow factors others than facts and evidence to be considered in the decision-making process? Do these other factors belong in the decision-making process? How do we know when to consider those other factors when decision-making?

Consider my situation: On a Friday, I was invited to facilitate a three-day retreat with the top management of a nonprofit organization I’ve never worked with before. Because it was a new organization (to me) and considering the high stakes of the work (the nonprofit was considering closing its doors), I would normally take a few weeks to prep (as past failures have taught me the importance of distinguishing between the espoused purpose and outcome of a retreat versus the real reason for having it.)  But the CEO said the retreat was in two Mondays. Knowing the risk involved, knowing that — rationally speaking — it was not a good idea, I decided to take the assignment. Why?

The factors that played a role in my judgment call to facilitate the retreat:

  • I wanted the new client and was determined to make it work.
  • I wanted to test my own ability to improvise with little information.
  • I engaged with a sense of adventure and the thrill of getting into a potentially risky situation.
  • I was curious to experiment with shorter preparation time and wanted to see how I would bring a typically much longer preparation process to bear in only five days.

Now, I am not a big believer in asking why people do things because I think we often make up answers. We tend to answer with the noblest explanation — “I did the retreat because I am risk-adverse and flexible” — and discard the less complimentary one —“I need a new client” or “I am crazy.” But we do the exact opposite when we have to explain why other people do things. We tend to discard their noble explanations and often believe the less generous ones.

I will put this objection on hold for a moment and will continue, despite the impossibility of considering every factor in my decision and being fully aware of my limited capacity for an objective account of my own decision-making process.

No doubts: based on past data I should have said no. Yet if I were to rely on past data only and not on those other factors, I would have foregone an opportunity to learn about myself and given up a great experience for my client’s organization.

I believe that the challenge of creating a future for ourselves and others lives in a different domain than relying on fixing, changing or re-engineering based on past data. Simply, it relies on creating. That starts right in the decision-making moment of saying yes!

(I should confess: During that decision-making process, I felt the thrill of the possible failure, and like a gambler ready to lose all his money for just one more bet, I was OK with it. I had no idea how I would handle it, but my answer to “How?” was “Yes!” Yes, I was ready to lose it all.)

Data
Credit: Stencil

In business, like in personal life, we rely on data. Yet data is about yesterday, not tomorrow. Data can identify patterns and illuminate future choices, but relying exclusively on data is like driving relying only on the rearview mirror.

Based on the past, I should not have accepted the job. So, clearly the decision to facilitate the retreat was a different kind of decision — the kind of decision where faith has a role because it was about creating a new future. I had faith that this retreat was a way to stretch myself and experiment with the intention of helping others. I had faith in the power of coming together to create a new future for this organization. I had faith in people’s ability in that organization in crisis to make things better for themselves.

This raises the question: When should we rely on faith to make decisions in business? I believe the answer is every time we are creating the future rather than fixing the past, every time we are trying to answer questions we don’t even know we have. (I am sure you would admit that this is pretty weird territory!) We should rely on faith every time the work is not about not knowing in the domain of fixing — because if it were, we would simply look for an answer — but about not knowing about not knowing, in the domain of creating the future.

This is a strange place to be for business-oriented, fact-finding, strategy-minded, brilliant people!  Yet when we are in a place where we aren’t looking for answers but for better questions, when inquiry takes over it brings unexpected insights on our way of being in the world. And we soon discover that these kinds of decisions aren’t about “what to do” but more about “who we are.”

Data has been on the wrong side of history every time the world has changed. Data tells us that Goliath always has and will win against David, that 13 small colonies under British rule have no business asking for independence and will not prevail against the biggest empire on Earth, that women have never voted before and should not have the right now. Real entrepreneurship, even in large organizations, is about creation. Corporations, organizations and communities like to make decisions based on data, yet the entrepreneurial spirit of the founders who gave birth to those companies, organizations or communities is often the result of the courage of upholding dreams -- that goes well beyond the present data, to make connections, establish patterns and venture into unpredictable, frustrating and uncomfortable territory to create a place of possibilities.

That’s not to say we shouldn’t take into account data or that there aren’t more or less effective ways when we are in this strange, new territory of creating a future.  The decision-making process in this domain is less about data and more about adopting a different mindset, another way of being like: being faithful and idealistic about the future, being open to being wrong, having the courage to face reality, thriving in uncertainty, creating clear parameters for what success and failure look like, being committed to the experiment.

If I were to discuss the process I used when making a judgment call that couldn’t be analyzed entirely on past data, I would say: “I don’t know why I say 'yes' to the retreat. All I know is I wanted to create a new future for myself and that organization and felt that facilitating the retreat was the way to start doing it.”

 

Adriano Pianesi is a leadership practitioner, faculty member of the Carey Business School, Johns Hopkins University, where he also teaches for the Office of Executive Education. Through ParticipAction Consulting, his consulting practice, he helps diverse groups of people come together to solve tough problems, and helps leaders work for change by harnessing the powers of conflict, diversity and complexity. He is a faculty member of the World Bank "Team Leadership Program" and of the State Department "Experiential Learning Program". He is the author of the e‐book “Teachable Moments of Leadership” where he describes a state‐of‐the‐art experiential leadership learning methodology that gets real results. Visit his website.

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