Sailors tie up small pieces of cloth on their lines to observe changes in the wind.  These pieces are called "telltales", as they give the first indications of issues which the sailor must address.  We use this analogy when looking at businesses, since we find that it is very valuable to recognize the early telltales of trouble. 

Management often gives the most glaring signs of a telltale problem.  Last week (as reported in the Chicago Tribune), Sears Holdings’ CEO, Aylwin Lewis, sent a letter to all employees.  In it he placed a ban on employees carrying bags from other retailers into their jobs.

There is no doubt that it’s good for retail employees to shop at their employers.  But, when a CEO puts such a dictum into writing, that is a telltale of a strategy, and organization, in trouble.  Such a telltale is more important than a dozen press releases of a company’s strategy, it’s intended plans or it’s anticipated results.  When a CEO takes the time to tell his employees he doesn’t like their shopping patterns it shows a leadership team struggling to defend and extend a broken Success Formula rather than find a new one.

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