NEWSLETTERS OF ADAM HARTUNG
The newsletters of Adam Hartung.
In the last newsletter, I talked about the importance of incorporating trends into business plans, organizations and innovation programs. An analysis of the subtle features behind a surface trend, or event, often shows they are born from changes in underlying conditions.
Most of an iceberg is below the surface. Here are two examples of surface events and understanding how they can be analyzed to expose underlying trends:
A Walmart truck critically injured comedian Tracy Morgan and killed the driver, making headlines and creating a public relations crisis for Walmart. But looking deeper suggests longer term business problems at Wal-Mart.
- Why was the driver working without sleep for 28 hours?
- Looking at the articles written about the event indicated a cultural shift where workers were being
pressured to work harder. Why?
- Was it to save labor cost? Are overall labor costs too high?
- Was it to restock empty shelves? Why? Were there problems with inventory carrying costs? Why? Were
inventories lowered to save working capital? Why? Were lower sales causing increasing overhead
allocations driving a demand for higher inventory turns?
A thorough assessment considers not only the business issues but also the human issues as well.
In 2013 Yahoo announced that workers could no longer work remotely. Leadership cited the cost savings and collaborative benefits. That’s on the surface. Dive a little deeper and ask,
- Why do people need to work nearer their boss?
- Is it so they can have their productivity measured? Is there a labor productivity issue? Why?
- Is it to create a self-enforced lay-off, and thus reduction in force? If so, why?
- Is it to eliminate individuals who feel more effective or creative working alone? How many famous
artists worked in a group? The 19th century Philosophical Breakfast Club (look it up!) might have
been a singular example, but they gathered to collaborate while succeeding as individuals.
Why eliminate employees who are good individual performers?
- Could centralization signal a cultural shift to top-down management? Why? Why the enhanced
focus on control? Why not focus on innovation?
- Not enough good ideas coming from the workforce? Not enough trust in self-determination and creativity?
Focusing on cost is a classic Status Quo Lock-in and indicates problems with the company Success Formula. Both show efforts to Defend & Extend a situation that is under stress, and leadership trying to squeeze out higher profits. They are telltale signs of worse problems likely to emerge as competition keeps putting pressure on the company.
In our consulting practice, we call such event analysis to identify underlying trends “The Whys”. Creating actionable change in a business requires looking hard at events to understand the drivers. We ask over and over, “Why?”
Once the underlying drivers to surface events trends are identified, the next step in the Status Quo Playbook is Pressure Testing your own Success Formula and Planning for Risk Impact.
The Valore National Conference on Social Change, Salvadore, Brazil
In a keynote address to Brazil’s business and government leaders I discussed the impact of disruptive innovations. Anticipating disruptive innovation helps companies and governments incorporate them to improve products and services. In the case of many South American countries the technology flow is relentless, but resources to take advantage of these technologies are limited. The task is to understand the most important trends and prioritize how to incorporate these into future plans.
NACD Battlefield to the Boardroom conference, Washington, DC
Retiring military generals and flag officers are often invited to serve on company boards to provide benefits based on their deep management experience. But these accomplished officers can have a deeper impact on governance. My keynote described how military experience is well suited to identifying and preparing for possible disruptive business impacts. Skills such as continually sensing the enemy/competition, adapting plans and using the environment to their advantage, innovating in real-time are very valuable in business today. The military is often believed to function with a top-down control model, but in reality, tactical responsibility is delegated to the commanders closest to the action and units are given latitude to adapt to changing conditions – something many companies fail to accomplish. It’s not intuitive to many civilians, but military expertise can dramatically improve corporate innovation and preparedness.
Listen to my recent interview on Business Radio Sirius XM, powered by Wharton:
“Sears Closing Stores-The beginning of the end?”