I’m a midwestern guy – born in Oklahoma, college in Kansas and now a long-time resident of Illinois. I love Chicago.  But, I have to admit, some things have been concerning me lately.

Illinois lost jobs last year.  In fact, Illinois has had a net job loss since 2000.  That’s a Telltale of problems.  The marketplace is shifting, and it’s not clear Chicago is creating an effective new Success Formula.

Across the business landscape, there are lots of signs of problems.  Former bellweather Kraft has been locked in a turnaround for 5 years, without much progress.  In 2004 the company closed 20 plants and laid off 5,500.  Recently it’s announced plans to shut another 20 plants and lay off 8,000 more.  Crosstown, Sara Lee has been struggling as it has sold off business after business in search of "focus," yet it has not been able to improve results.  Revenues are predicted to halve over the next 5 years in this prolonged turnaround effort – apparently in plans to shrink itself into success.

Sears has shown misstep after misstep since being acquired by K-Mart.  It announced in 2005 it would convert 400 KMart stores into Sears Essentials – but as sales fell 20% in the first 40 conversions that decision has now been abandoned.  Sears can’t even buy it’s own Canadian operations, having had its offer turned down by the Canadian Board!  And McDonald’s is under attack for everything from bad fat in its food, to unannounced ingredients causing asthma attacks and a 30-something hedge fund manager trying to force management to restructure its operations in order to add value to a stuck stock.

For years, I’ve heard people talk about "midwestern paternalistic companies,"  "mature management in mature industries," and "old fashioned values exemplified by careful management"  when talking about Chicago.  Unfortunately, these are a pleasant veneering over of unpleasantly Locked-in management teams.  Too many companies are blaming a "midwestern culture" for an inability to Disrupt their failing Success Formulas and implement White Space.  Too few new products are being created and introduced, and too few new innovations are being introduced into operations.

Do midwesterners lack innovation?  Of course not.  Go to any of a number of Chicago area angel investing groups, or entrepreneur groups, or venture clubs and you’ll see, literally, dozens of new ideas for businesses of all types.  Ask those entrepreneurs where they go for corporate support and you hear "the coasts.  None of these big Chicago companies want to get involved with local innovators."  And, alas, you don’t see these companies sending representatives to any of these networking events.  These venerable laggards keep looking inward for all the answers, instead of looking outward – where White Space creates a flourishing market of innovation.

I would think that the apparent Challenges – the loss of jobs, or the declining stock prices, or the frustration of limited growth – would lead these company executives to do something different.  To Disrupt their ineffective operations.  But so far, they have remained Locked-in to those old Success Formulas – and the price is being paid (quoting a famous line from It’s a Wonderful Life) "by those people who do most of the working, and eating, and living, and dying in this town."

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