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Five myths that keep you slow

Five myths that keep you slow

by Laurence HaughtonMay 2015

Do you worry about a lack of urgency at your company? If you do, you’re in very good company.

We’ve asked 11,000 successful business leaders over the last dozen years, “What keeps you awake at night?” The “lack of urgency” has consistently topped the list. 

The reason is obvious. To grow, business needs to change fast enough on the inside to keep up with change outside. And dreaming up a good strategy for growth is not enough.

“It’s hesitation and half-hearted execution that will kill our future,” execs say, “not our competition.” 

Our research found five myths that cause the majority of hesitation and half-hearted execution in organizations. Here they are:

 

Myth # 1 – Go big or go home

HP made a huge bet on Compaq and it cost them $13 billion. Merrill Lynch bet big on sub prime and it cost them their company. Time Warner and AOL was the biggest bet of the new millennium and became the biggest loser (costing them 70% of their stock’s value). Sprint and Nextel were another sad tale of go big strategies gone badly. Each was a business bust costing billions.

High-speed companies will go big. They too acquire, merge, expand, and reinvent whole categories. But before they go big they follow the first lesson for creating a happy fairy tale ending, if you want to find a prince you got to kiss a lot of frogs.

High-speed companies make many smart, bite-sized bets to help uncover big opportunities. They experiment and they prototype before they go big. They learn their customer’s stories and can read between the lines to find opportunities. They curb their egos. They have the courage to anticipate further, fail fast and to say to everyone, “It’s okay to make mistakes.” They have more buy-in. And they fill their ranks with the rarest kind of business executive – the open minded, life-long learner.

 

Myth # 2 – You must amaze and delight your customers

It’s obvious that you can’t grow fast if your good customers are leaving you. But the critical first step in keeping good customers isn’t to “amaze and delight.” 

“We’re not looking for over-the-top service to stay loyal,” 75,000 business clients and consumers told the researchers from the Corporate Executive Board. “Just don’t lose our luggage, make dealing with you a pain in the ass and deliver less than you promised us.”

In other words, just don’t suck.

High-speed companies understand all business has a blind spot that must be cured. “By the time you figure out you suck …you’ve sucked for a long, long time,” is our immutable law of suckage. Any business that’s lost good customers was disappointing them a long time before revenues headed south.

High-speed companies figure out the four or five basic expectations customers have. Then they find out if they’ve executed flawlessly (“Stop asking, ‘Do you like us, are you satisfied?’ a straight-talking CEO explained, “Ask, ‘did we do like we promised - a, b, c, and d?’ If they say no to any one of them how the hell can you think they’re satisfied?”)

And if you discover you’ve dropped the ball, take heavy action.

 

Myth #3 – Every minute of planning saves ten

Companies have taken common sense (don’t run your business by impulse and emotion) to exaggerated levels. How exaggerated is planning these days? Big organizations now spend 200,000 man-hours planning and budgeting for every one billion dollars in revenues.

Effective planning can save time and money. But as the North American President of IKEA told us, “Exaggerated planning is death.”

•       Exaggerated planning wastes time. 80% of meeting time these days addresses only 20% of what’s important.

•       Exaggerated planning causes executives to be rigid and lose flexibility as they blindly administer the “500 page plan from headquarters.”

•       And it contributes to “paralysis by analysis,” where our worry over being wrong ties individual initiative into knots.

Instead of exaggerated plans truly high-speed companies have a short list of “the shall’s and shall nots” for their business. Their guiding principles act as boundaries - increasing ethical, strategic action and motivating everyone to adapt, improvise and overcome all obstacles quickly.

 

Myth #4 - Consequences make people more accountable

When an engineer in ancient Rome finished building a bridge, by law he had to sleep under it. Centuries later the English upped the ante, making his family join him under that new bridge.

Harsh consequences made people more accountable in ancient minds - if your work was defective you and your loved ones would suffer. Some bosses totally agree.

High-speed CoBank has a better idea. Under CEO Bob Engel’s leadership the fast growing, highly profitable, incredibly productive bank uses engagement and clarity instead of blame and punishment to achieve greater accountability.

“Our leadership teams sit across the table from those expected to follow through and says, ‘This is something important and we’re going to entrust you to be accountable. Now, let us tell you what we were thinking, where we’re trying to go and let’s discuss it and find out what do you need from our end?’”

“You got to be out there,” says Engel, “and get on the same page.”

 

Myth #5 - Nothing succeeds like success

•       In 1988 one in four beers sold in America was a Budweiser. Now it’s one in twelve.

•       Between 1990 and 1999 The Gap grew sales double digits every year. Since 2004 sales have stalled.

•       Blackberry (RIM) surged, $300 million in 2003 to $20 billion eight years later. By 2014 Blackberry had tumbled to just $6.8 billion.

In all these cases and at every other high flyer that plummeted over the last four decades, success has been a double-edged sword.

Nothing beats the elation of winning, putting up big numbers and leaving the competition in the dust. But success also makes risk takers risk adverse, empowers a bureaucracy and motivates “yes men” to sweep any uncomfortable truth under the rug.

High-speed companies follow the wisdom of Franklin, Grove and Solo.

“Doubt your own infallibility,” wrote Ben Franklin.

“Only the paranoid survive,” wrote Intel’s Andy Grove.

“Great kid… don’t get cocky,” advised Han Solo. 

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