Umer Toor Blog: Summries from Harvard Business Review

When Established Superiority Isn't everything !!

Posted By Muhammad Umer Toor, 21-Nov-2008.

Always keep in mind what first paragraph of page # 199, 227 (exhibit 8-7) of Management book [1] states, whenever you're in the business. Even when your organization is touching skies or, worst, in a downturn, and if you cease to bring innovation, cease to find new directions and so on and so fourth - this is a worst pitfall. Becoming best is one thing, and trudging along a constant line is not a safe strategy. Because, whenever you find that everything is going smooth, actually something is going wrong there. This happens mainly with those companies whose tasks demand optimum performance; when everything around them is changing without any notices. What I learnt from Stanely Hainsworth, 'former creative genius behind campaigns for Lego, Nike and Starbacks' [2], is that eternal reconstruction is the price of success for any brand. Editor at Entrepreneur magazine calls it as 'Survival of Fittest' [3]!

The basic idea behind finding new directions or cracking innovation, a necessity of established companies and else, is well explained by Hainsworth, and in his own words:

"Many [companies] wait until a crisis hits and then go through the cycle of
ahiring freeze, cost-cutting and
layoffs. [Refocus] while you're strong, while have the resources and before you
start cutting."[4]

This happens (-unexpected shocks-) mainly becuase of 'market-shifts', customer choices change (like our favorite ice-cream example!), and of course, due to dynamic enviornment, generally. [5] Doing something ahead of hard times isn't at all a weak idea. It's an expert view as well as well-researched thesis. (To quote you one more example). According to a research done [6] on the four common causes of growth stall, two majors reasons given for growth stalls confirm Hainsworth point of view.

One big reason, according to HBR [7], is that 'innocvation management breaks'. Second, because 'company lacks a strong talent bench'. [8]

Once, I asked a senior student of criminal psychology, "What is the remedy for a criminal-minded person?" And, his reply, which I found quite witty, was, "You shouldn't be criminal in the first place." 'That's the best strategy', he whispered to me without even whispering! And, business studies are no exceptions!

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Notes:

[1] Page 199 (Chapter # 7), Ist paragraph states the successful plans are not likely to work in changed situations. Whereas page 227 (exhibit 8-7) (Chapter # 8) urges the need for creating strategic flexibility, i.e, it consists of: monitoring and measuring results; gaining fresh perspectives and ideas outside organizations; sharing negative information and learning from the mistakes; while making strategic decisions, having multiple alternatives. (From: Management, 9th Ed., by S. P. Robbins& M. Coulter.)

[2] Quote from Entrepreneur, November 2008, article, INSGHIT "Survival of the Fittest,' by Lindsay Holloway.

[3] Quote from Entrepreneur, November 2008, article, INSGHIT "Survival of the Fittest,' by Lindsay Holloway, Pg. # 33.

[4] Quote from Entrepreneur, November 2008, article, INSGHIT "Survival of the Fittest,' by Lindsay Holloway, Pg. # 33.

[5] Quote from Entrepreneur, November 2008, article, INSGHIT "Survival of the Fittest,' by Lindsay Holloway, Pg. # 33.

[6] When Growth Stalls, by Mathhew S. Olson, Derek van Bever, and Seth Verry, HBR (Harvard Business Review), OnPoint, Fall 2008, Article Published Originally March 2008.

[7] Excerpt from HBR (Harvard Business Review), OnPoint, Fall 2008, When Growth Stalls, from Idea in Brief coulmn, Pg. # 33, Article Published Originally March 2008.

[8] It is further explained in the article, (OnPoint, Fall 2008, When Growth Stalls, from Idea in Brief coulmn, Pg. # 33, Article Published Originally March 2008) as:

"The firm has few executives and staff with strategy-execution capabilities."

Since when I started reading out carefully Harvard Business Review (HBR), I have come to respect my course management book (i.e, Management, 9th Ed., Stephen P. Robbins & Mary Coulter). I have appreciated that this book summarizes or states, at least, all those principles on which all of today's successful organizations work and win.

Quoting a small example which I came across in this month's (Nov.) issue of HBR, will make you take my claim more seriously.

Cisco Systems are "the world's largest provider of internet networking." And, Cisco's new CEO John Chambers, who will begin his 14th year at Cisco in January, has always been good at listening. And, so has his company been such that - they have scored loads of capital, merely by listening to their clients and customers, as HBR puts it.

"Cisco is able to predict trends six to 8 years (remember budgeting, forecasting, or projecting is always futuristic) in the highly volatile technology market by recognizing early-warning signals its customers unwittingly give off**." This is what they call "market shifts." And, Chambers, Cisco's CEO, himself abandoned his own old 'command-and-control' style in decision making. (I will share more ideas on this topic in future posts, hopefully.)

Cisco was founded in 1984. It did went in a downturn (i.e, crisis). And it came out. Regained its superiority in Internet Communications Equipment providers. But. Only through seeing the future. And, it has been doing so for long only by listening to its customers.

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Notes:

* Harvard Business Review, November 2008. "The HBR Interview: John Chambers", Heading Topic & Pg. 241 of, Management, 9th Ed., Stephen P. Robbins & Mary Coulter
** Harvard Business Review, November 2008. "The HBR Interview: John Chambers"