by Adam Hartung | Oct 14, 2004 | General
Definition: Mind-sets and practices related to establishing a Success Formula, then improving on it and protecting it against competitors by doing it better, faster, or cheaper. D&E Management sees the historical Success Formula as the solution to the problems that arise from marketplace challenges and seeks to defend or fix it. For example, Tupperware became successful in the 1950’s using the home party model and providing high-quality products. In the 1990’s, struggling to grow revenue and profits, they continued clinging to their original model—asserting that the home party sales model was still viable and developing products so high in quality as to be bullet-proof. As a result, the company continues struggling along in the Swamp. [Source: The Phoenix Principle] See also: Phoenix Principle, challenges, Success Formula, lock-in, Swamp.
by Adam Hartung | Oct 14, 2004 | General
We’ve added a new feature to our website, what we’re calling the “Phoenixionary” (see the links in the left-hand column). This is a dictionary of terms that we’ve used in the Phoenix Principle along with terms other thought leaders have used in describing a new model for management for the 21st century economy. We’ve started populating the Phoenixionary, but eventually want it to become “open-source” so that many people can participate in defining the new world of work. If you have a contribution to suggest, just email us. Periodically, we’ll feature one of the Phoenixionary terms as a blog entry.
Business can be SOOOOO serious, don’t you think? To do our part to lighten things up a bit, you’ll notice a second link below the Phoenixionary which is for a humorous dictionary. This is our way of being playful and letting off steam. We’re creating humorous definitions of terms related to experiences in the workplace. Check it out, and feel free to share your own humorous definitions with us and we’ll add them to the site.
by Adam Hartung | Oct 13, 2004 | Lifecycle
As companies age, they lose their flexibility and their appeal to customers in the marketplace. We have described this aging process with a metaphor and created the River Lifecycle Model. Your organization’s (product, business unit, process, etc.) location on the “river” is indicative of how effective you’re being, and what it’s going to take to reinvent yourself. So that’s pretty useful to know, is it not? Well there are many ways to tell, but a clear indication is the cultural “tone” and general behavior of the employees. Take this test for yourself, which of the qualities below describes your business (department, product line, process, etc.)?
River Lifecycle Model
Qualities in Stages of the Lifecycle
Stage———People are—–Cultural tone
Wellspring —Adventurous– -Hopeful
Rapids——–Cocky———-Enthusiastic
Flats———-Arrogant ——Sarcastic
Swamp——-Defensive——Cynical
Whirlpool—–Desperate——Hopeless
(Thanks to Marsha Clark for the suggesting some of these terms.)
by Adam Hartung | Oct 8, 2004 | Quotes
The dissenter is every human being at those moments of his life when he resigns momentarily from the herd and thinks for himself.
—Archibald MacLeish, 20th century writer, poet
by Adam Hartung | Oct 8, 2004 | General
I heard a radio announcer say the phrase “Scared money is dead money.” How true! During the tough times and periods of uncertainty do you play it safe or take risks to take advantage of the disruption?
by Adam Hartung | Oct 8, 2004 | Disruptions, In the Swamp
Belo’s problems continue with a whole raft of shareholder lawsuits. So what do you do when you have a problem? You solve them.
So, when Belo admitted to the inflated circulation, it set out to solve the problem. They did that by finding guilty parties and firing them, and they made restitution to their advertisers. And in focusing on the problem they made a big (and excruciatingly common) mistake. They didn’t look for the external challenge that is the root cause behind all these problems.
What’s the challenge? The company’s Success Formula has become obsolete and they are struggling financially. So, is firing some guilty parties going to solve that? No. Maybe those people should have been fired. Fine. Now what? What will Belo do about the challenge?
Just as I wrote about Merck’s crisis, Belo has the opportunity to really take advantage of this situation. They could create a disruption by seeing this as an indictment of their strategic assumptions and decide to reinvent them. However, if they stick with the actions they’ve taken thus far, this whole unsavory event will amount to a mere disturbance—an annoyance that the company has to deal with so they can get on with business as usual. And if that happens, we may not have to wait long for the next negative headline…
by Adam Hartung | Oct 8, 2004 | Disruptions
It isn’t every day that a company loses $25 billion (yes BILLION) dollars of stock value in a single day… or a company has the courage to do the right thing even knowing they’re going to get hammered for doing so. But that’s what Merck did.
Merck & Co. on Thursday recalled its arthritis drug Vioxx after an ongoing trial confirmed the medication increases the risk of heart attack and strokes. The news sent stock down nearly 27 percent and erased $25 billion from its market value.
Merck’s pulling of their blockbuster drug Vioxx off the market was an act of courage and integrity that is almost unheard of in an age of Enrons and Tycos . But instead of focusing on that, everyone seems to be wondering who to blame. Well that’s the wrong question and the wrong line of thought.
I would be asking, “who’s going to be the hero at Merck that seizes on this challenge and uses it as an opportunity to create a breakthrough for the company?” This event has created a disruption at Merck—there’s white space in the shadow of this disaster that will allow them to make just about any changes they want to make—and this sort of opportunity is very hard to come by.
Normally, companies are so hide-bound by their locked-in behaviors and organizational structure that they can’t break out of the status quo to make the important strategic shifts that would position them for a brighter future. SO, as bad as this situation is for Merck, it is also a golden opportunity. The big question is what will Merck do with it?
What could they do? Well they could leverage the integrity of their action to create trust with a customer base that has grown wary and cynical about drug companies—what would that be worth? They could re-examine their assumptions about the viability of the drug company model that puts them in feast-or-famine mode depending on the next great blockbuster drug to emerge from the R&D labyrinth. What changes could they make that would diverge from the industry norms and give them a real advantage?
What ideas do you have?
by Adam Hartung | Oct 6, 2004 | General
As we move into the new millennium, we’re also moving into new models of organization–interdependent, networked, organic. This change will call for different metaphors than those we’re used to, which are dominated by machine references and war words. I think women will have a lot to say in creating these new metaphors.
Check out Kirsten Osolind’s website. Kirsten offers marketing services to women-owned businesses. I find the metaphors in the cycle shown on the “process” page to be very different from those you’d normally find in business. Quite organic.
Checking out her reinvention model, you will find some steps that are usually ignored, like getting real by discussing the undiscussable. However, what isn’t evident is a step to disrupt the current mind-sets and organizational lock-in to create the space for innovation. I wonder how she addresses that?
by Adam Hartung | Oct 5, 2004 | Quotes
All great truths begin as blasphemies.
—George Bernard Shaw
by Adam Hartung | Oct 4, 2004 | Ethics
A colleague described his new employer, LRN, to me over lunch last week. LRN is one of a growing number of companies devoted to helping companies strengthen their ethical standards and compliance. In light of Sarbanes-Oxley and the post-Enron climate, businesses such as LRN are booming.
It is clear that setting standards, training people, and increasing attention on and visibility of ethics is making a difference in companies. However, I asked my colleague if there might be more to ethical breaches than just these factors. Could it be that performance pressures might lead even ethically aware people to bend or even break the rules?
We believe that the dramatic rise of ethical violations like that at Enron and others was in large part due to desperate people trying to meet their performance goals. Because the business isn’t giving customers what they want, the customers aren’t buying. As a result, desperate employees are resorting to desperate measures. This seems to be what happened at Belo Broadcasting.
According to articles published last week in Dallas Morning News, Belo Corporation, (publisher of the Dallas Morning News) has admitted to the inflation of circulation numbers that misled advertisers. Belo attributes this to “aggressive pursuit of goals set by former managers and inadequate monitoring of distribution and return practices.” Belo goes on to report that circulation for the six-month period ending today is down about 5.1 percent and 11.9 percent on Sundays compared with figures reported a year ago. A companion article reports that Belo is cutting 250 jobs due to a lag in the DFW market.
Instead of just thinking about this situation as a couple of bad apples who broke the rules, we would invite Belo to take a hard look at their business. It’s clear that their customers are going to other sources for their news. There are so many substitute providers for obtaining more timely daily news than just a newspaper. For a newspaper to compete, it has to offer something else, something different and better.
What can Belo do? Belo should turn this event into a disruption that would have them seriously rethink their business. How could they reimagine their business model to reinvigorate the business and jumpstart growth and restore profitability?
Unless Belo makes significant changes to its Success Formula, we predict that the company will continue to struggle. Perhaps they won’t have any other ethical breaches, but their problems will show up in other ways, like being forced to lay off employees due to slowing sales …
