“In an effort to fuel growth, two of the biggest companies in the videogame-console business, Microsoft Corp. and Sony Corp., are announcing new games and services that target mainstream users as never before...
“A factor in the moves by Sony and Microsoft is the stunning commercial success of rival Nintendo Co. That game maker turned industry convention on its head over the past two years by going after casual game players with its Wii gaming system from the day the console went on sale. Nintendo did that by emphasizing fun, intuitive Wii games that use the console's motion-sensing controller rather than the pricey, hyper-realistic graphics favored by hard-core players.
“‘We are at an inflection point in our business where we've secured the core and now we're reaching out to mainstream audiences,’ said David Hufford, senior director for Microsoft's Xbox 360 business.
“In the U.S., Microsoft and Nintendo have each sold nearly the same number of their latest generation of consoles, trailed by Sony. Nintendo, though, is significantly outselling its competitors on a monthly basis.”
(“New Videogames Set Their Sights On Mainstream.” Nick Wingfield and Yukari Iwatani Kane. Wall Street Journal: July 15, 2008. pg. D.1)
IT CERTAINLY IS fun and intuitive to turn things upside down. And no doubt, the hard core is indeed a tough nut to crack -- consistenly at least...
Yet the primary questions remain: How do we add real value in the eyes, minds and hearts of our target? And, how do we do that in a way that no one else can?
Aye, there's the nub.
(the kernel)
Inflection
Artistic "Science"
“Since the Enron scandal, a coterie of corporate-governance firms has emerged as standard-bearers for shareholder rights... The firms -- which include the Corporate Library and RiskMetrics Group's ISS Governance Services … sell, among other things, ratings that say whether a company is well governed or not.
“But a new study from Stanford University's law and business schools gives mostly dismal grades to four of the biggest rating services...
“Statistical tests run by the Stanford academics found little or no correlation between the different services' ratings. Pfizer, for instance, earned a perfect ‘100’ from ISS in 2005, but a ‘D’ from the Corporate Library. Lockheed Martin scored a 9.5 out of ten from GMI, but Corporate Library gave it its worst possible grade, an ‘F’ …
“Companies, fearing the scrutiny of shareholder activists or the wrath of the raters, sometimes do pirouettes to improve scores…
“The Stanford team found very little or no statistical evidence of links between the ratings and company performance, undermining the firms' very reason for being… On average, [ISS’s] top-ranked companies were more likely to have class-action lawsuits than its lowest-rated companies.
“‘The fact that our primary customers are investment managers suggests they are finding value in what we deliver,’ said Howard Sherman, CEO of GMI…
“The Stanford findings reinforce a growing sentiment that governance ratings are an art, not a science. ‘It points out that there's no grand unified theory of corporate governance,’ says Cary Klafter, vice president of legal and corporate affairs at Intel.”
(“Who's Watching the Watchdogs?” James Bandler, Doris Burke. Fortune: July 7, 2008. Vol. 158, Iss. 1; pg. 18)
THE DANCE IS A FRENZY, and the music is manufactured. Hey, if customers like it, then why not... ?
We look for what we want to discover. We see what we want to appear.
"Torture the data until they confess!"
Direction, Execution And Timing
“Vikram S. Pandit summoned 60 executives to Armonk, N.Y., last Tuesday to present his plan to buck up Citigroup, the beleaguered bank he runs…
“Mr. Pandit tried to lift spirits and brainstorm for ideas about how to reshape his company's culture. He pushed 60 top managers to build on his seven rules, which he unveiled in the last few weeks. Those rules include items like ‘client connectivity,’ ‘transparency’ and ‘product excellence.’
“But some Citigroup insiders roll their eyes at what they see as dull platitudes. Instead of embarking on a bold new course, as some investors had hoped, Mr. Pandit seems to be turning to the playbook of his predecessor, Charles O. Prince III, who was forced out last year...
“Mr. Pandit's executives say they are confident the strategy will pay off, but they have no illusions about how long it may take.
“‘This isn't like a sprint. This really is a marathon,’ said Gary L. Crittenden, Citigroup's finance chief. It could be two to three years before the bank's returns improve significantly, he said.
“Wall Street is growing impatient. ‘Some of the objectives set forth have been in motion for many years,’ said William Tanona, who follows Citigroup for Goldman Sachs. ‘With each passing quarter, there will be increased urgency for people to see results.’”
(“Appointments With Red Ink.” Eric Dash. The New York Times: July 15, 2008. pg. 1)
FIRST SURVIVAL, then growth, then thriving, then adaptation.
Mess up that sequence and you have chaos. Get it right and results will come into line, and spirits will soar.
Both And
“What is the CEO of a Global 500 company to do? Listen to the doom-and-gloom economists and act cautiously, or keep pushing into fast-growing but fragile economies? Smart executives are doing a bit of both, seeking new growth markets with the full understanding that their plans will be shaped and changed by global forces. Some of those trends are huge and long-lasting, like the rise of the global middle class. Others are not: Carrefour, for example, almost had a disaster on its hands when Chinese consumers threatened to boycott the chain over an event it could not foresee or control: A pro-Tibetan protester in Paris assaulted a wheelchair-bound Chinese Olympic torchbearer.
"Robert McDonald, Procter & Gamble's chief operating officer, has borrowed a military term to describe this new business world order: ‘It's a VUCA world,’ he says -- volatile, uncertain, complex, and ambiguous. ‘The idea that a butterfly flaps its wings in Africa and an earthquake occurs somewhere else in the world is our reality. It's no longer just a nice book that Thomas Friedman wrote,’ he adds, referring to the New York Times columnist's book on globalization. ‘It's my life.’”
(“The New New World Order.” Barney Gimbel. Fortune: July 21, 2008. Vol. 158, Iss. 2; pg. 156)
NO MORE either-or thinking.
Indeed, we live in a world where the only way to cope with volatility, uncertainty, complexity and ambiguity is to develop a fine touch for the craft of balancing through paradox.
This involves a bit of science infused with a very healthy dose of art -- perspective, interpretation, touch and feel.
The ancients comprehended this. Our immediate predecessors tended to forget. We must remember.
Not Unusual At All
“In 2005, radio-giant Clear Channel Communications Inc. learned that a writer named Alec Foege was planning a book about it. The book's working title, ‘The Monster That Ate Mass Media,’ suggested something less than a puff piece was in the works.
“Clear Channel mounted a counteroffensive, lining up its own writer to tell the Clear Channel story its way.
“As a result, dueling books about Clear Channel have recently hit the shelves. Mr. Foege's book -- now titled ‘Right of the Dial: The Rise of Clear Channel and the Fall of Commercial Radio’ -- chronicles the company's role in the consolidation of the radio industry.
“It competes with ‘Clear Vision: The Story of Clear Channel Communications,’ by Reed Bunzel, former editor of the trade magazine Radio Ink. Mr. Bunzel says Clear Channel paid him to do the book but declines to say how much. Another journalist says he was offered more than $100,000 to take on the project. The book doesn't disclose Mr. Bunzel's financial relationship with Clear Channel, but careful readers may notice that the company holds the copyright to the book.
“Self-published corporate histories aren't unusual. But Peter Hawes, editorial director of Greenwich Publishing, a publisher specializing in corporate histories, says he has ‘never seen a situation in which a company has said, Hey, there's another book coming out. We don't think we're going to like it. Let's get our own book out.’ …
“Lisa Dollinger, Clear Channel's communications director, spearheaded the book project. She calls it an ‘evenhanded look at Clear Channel’ that ‘was written from an independent point of view by a journalist with decades of experience in radio.’”
(“Why Clear Channel Tale Is Told Twice.” Sarah McBride. Wall Street Journal: July 10, 2008. pg. B.1)
FIRST IMPRESSIONS matter a great deal we know.
So do lasting impressions.
It's not unusual to be loved by anyone…
It's not unusual; it happens every day
No matter what you say
You find it happens all the time
Love will never do what you want it to
Why can't this crazy love be mine?
(Tom Jones)
Just the Numbers?
“Silicon Valley star Diane Greene was ousted as chief executive of VMware Inc. by its corporate parent, EMC Corp., which said the fast-expanding software company she co-founded had grown beyond her ability to manage it...
“Ms. Greene's removal ends an uneasy relationship in which she sought to guard VMware's independence while its stock price had fallen amid new competition...
“Joseph Tucci, chief executive of EMC and chairman of VMware, said in an interview that the VMware board concluded Ms. Greene lacked the experience to continue running a company that expects to have revenue nearing $2 billion this year. He said the board invited her to stay in a different ‘very active role,’ but she declined.
“Ms. Greene, reached at her home, said she wasn't allowed to talk about the situation.
“In past interviews, Ms. Greene has said she wanted more independence from EMC, a maker of large computer storage systems, to make her own decisions...
“EMC acquired VMware in 2003 for $635 million and retained 86% of its stock following an eye-popping initial public offering last summer…
“Mr. Tucci said that Ms. Greene had run VMware successfully and ‘built a great company,’ but ‘the board felt it was appropriate to bring in leadership with the experience to double or triple’ the company's sales. He said talks with Ms. Greene about a succession plan failed to reach agreement…
“Following the sale, Ms. Greene became an executive vice president of EMC, but remained on the West Coast. She sometimes visited a VMware development lab in Cambridge, Mass., without making the trip 30 miles west to EMC headquarters...
“Ms. Greene was a popular leader within her company, especially among women. EMC has often been criticized for having few women executives.”
(“VMware Ousts Star CEO as Growth Slows; Diane Greene's Removal, Forecast Hit Shares of Highflier and Parent EMC.” William M. Bulkeley. Wall Street Journal: July 9, 2008. pg. B.1)
IMPRESSIONS, IMAGE AND INTRIGUE shape most of our corporate work, and our personal worlds as well.
It looks like a rough and tumble game governed by the kid who owns the ball, or a beauty pageant where Miss Congeniality never seems to win.
Watch your numbers; watch your aura, and watch out for what's in the air...
What It's All About
“General Electric Co. plans to turn a tiny airplane-engine company in the Czech Republic into a competitor against archrival Pratt & Whitney, the leading maker of turboprop engines for commuter airlines, corporate aviation and private aircraft owners.
“GE's aviation unit this week completed the acquisition of Walter Engines, which has earned a reputation during its 85-year history for building rugged propeller engines used heavily in Eastern Europe and niche markets such as agricultural and cargo planes.
“Although the small-engine business will fill an important hole at the low end of GE's jet-engine product line, GE officials are also relishing the prospect of forcing Pratt & Whitney to cut prices on one of its most lucrative products. Pratt made a similar move two years ago when it began making spare parts for one of GE's best-selling jet engines, ratcheting up the companies' longstanding rivalry…
“‘We think the world deserves a choice,’ said Chet Fuller, general manager of marketing for GE Aviation…
“A spokeswoman for Pratt, which delivered almost 3,000 small airplane engines last year, said the company will ‘obviously take any competition seriously,’ but she noted that Pratt ‘has a 45-year head start,’ having produced more than 35,000 PT6 engines.”
(“GE Takes On Jet-Engine Rival; Goal Is to Build Up Small Czech Firm To Challenge Pratt.” J. Lynn Lunsford. Wall Street Journal: July 3, 2008. pg. B.2)
ALTRUISM -- That is so kind of General Electric to care about us!
And Pratt seems not to have a real worry in the world.
How nice; all is well...
Strategic? People!
“In the latest attempt to persuade restive investors it can fix itself, Yahoo! is reorganizing its management ranks. The widely expected revamp, unveiled June 26, centralizes product and sales operations under President Sue Decker.
“The reorganization comes a day after co-founder and Yahoo CEO Jerry Yang and Chairman Roy Bostock sent shareholders a public letter explaining why the company rejected a deal that would have combined its Web search operations with those of Microsoft.
“The public statements follow a flurry of management departures in the wake of failed takeover discussions with Microsoft. They also signal Yahoo is ratcheting up efforts to rally support for its independence ahead of an Aug. 1 annual shareholder meeting. Yang, Decker, Chief Financial Officer Blake Jorgensen, and Yahoo directors will take their appeal straight to large investors in a road show due to begin next week…
“The reorganization presents little fundamental change in Yahoo's top leadership, which has been roiled by high-level defections recently. In the past year, Yahoo has seen the departure of more than 100 managers, including top executives such as Jeff Weiner, former executive vice-president for Yahoo's Network Div., who left last week…
“Some of the people who left did so because they were growing weary of the off-and-on Microsoft negotiations. They decided to make their move after Microsoft walked away from its proposed buyout, as they faced many more months of uncertainty about Yahoo's prospects and direction. With the reorganization, they say, more talent could walk out the door. ‘The patience is growing thin’ within Yahoo's walls, says one former Yahoo executive. The sentiment is shared outside the walls, too.”
(“Yahoo Tries to Heal Itself – Again.” Robert Hof. www.businessweek.com. June 27, 2008)
LEAD WITH STRATEGY, then people will follow?
Alternatively, lead people, and your strategy will emerge, coalesce and crystalize!
Strategic! Thinking?
“Any forecast calling for a ‘permanent’ shift in auto tastes based on a quantum as volatile as the price of gasoline is nuts.
“GM's leaders are not nuts, and yet to pour hundreds of millions into a race to launch an electric car, the Chevy Volt, guaranteed to lose money on every unit sold, begins to seem a peculiar strategy for a company in dire liquidity straits.
“With each hectic advance in the development process, the expected sticker price to consumers has gone up... At last leakage, GM is saying now the Volt may need a sticker price of $45,000.
“At best, the Volt will be an affluent family's third car. It will have to be plugged in for six hours a day... It won't be a car for a city dweller who parks on the street or in a public lot. It will travel 40 miles on a six-hour charge. After that, a small gas motor will kick in to recharge the battery while you drive. Some reports claim the Volt will get 50 mpg in this mode, but that's hallucinatory: If using a gasoline engine to power an electric motor were so efficient, the streets would be full of such vehicles...
“Customers value flexibility in their vehicles. For a car with the Volt's narrow usability to sell would require an unlikely revolution in consumer behavior...
“And for those who think the Volt's justification is greenhouse emissions, notice that electric cars play Three Card Monte with energy inputs: It all depends on where the electricity is coming from…
“GM executives are not nuts. They justify the costs and risks of the Volt as a way of changing GM's image in the minds of consumers and politicians. To commit a pun, the Volt is GM's vehicle for making a bailout of GM politically acceptable...
“CEO Rick Wagoner last week laid out the case to Barack Obama personally for turning GM into a ward of the state, by way of direct and indirect subsidies… Shareholders should note that a big part of the company's turnaround gamble consists also of eliciting favor once again from Washington.”
(“Business World: What Is GM Thinking?” Holman W. Jenkins, Jr.. Wall Street Journal: July 2, 2008. pg. A.11)
PERCEPTIONS AND PERSPECTIVES get managed first. Interpretations come next. All hinge on values, beliefs and assumptions.
Now we get to work, working to drive the way we are seen, and seeing as we need to so we can do what we want to do.
Both Sides Now
“For a decade it appeared there was no such thing as too many Starbucks for U.S. coffee drinkers, whose willingness to buy its $4 lattes and dark drip brews rationalized a second green-and-white mermaid awning just down the street — and sometimes even a third. But in a sign that those days are over, Starbucks Corp. announced Tuesday it will close 600 company-operated stores in the next year as the faltering U.S. economy hastened the pain caused by the company's own rapid expansion.
“Starbucks shares, which have been falling steadily for nearly two years, jumped 72 cents, or 4.6 percent, in extended trading after the announcement…
“Starbucks is closing 19 percent of all U.S. company-operated stores that opened in the last two years, Chief Financial Officer Pete Bocian said…
“In total, the company forecast up to $348 million in charges related to the closures, $200 million to be booked in the fiscal third quarter ended June 30. Starbucks reports third-quarter results at the end of July.
“The company had previously planned to shut 100 stores. The 500 more that will be closed had been on an internal watch list for some time. They were not profitable, not expected to be profitable in the foreseeable future…
“Some analysts had wondered whether Starbucks' explosive growth in the U.S. would come back to haunt it as the market became saturated.
“But before Tuesday, the company avoided acknowledging that saturation was an issue and pinned weak financial results and adjustments to new store openings on the economy…
“‘We believe we still have opportunities to open new locations with strong returns on capital,’ Bocian said.”
(“Starbucks to close 600 US stores, rein in growth.” by Jessica Mintz of the Associated Press. news.yahoo.com. July 2, 2008)
GROWTH OR PROFIT, what will it be? How long and how well can we pursue both sides of this balancing act?
What will be rewarded? How will that enable the ongoing accomplishment of our mission?
Emergence, growth, maturity, decline -- all systems move through life cycles as surely as sunshine follows rain, and rain follows the sun.
What are we learning and changing within each stage?
I've looked at life from both sides now
From up and down, and still somehow
It's life's illusions I recall...
(Joni Mitchell)
Rational AND Intuitive -- Just the Tip...
“Fishing in the stream of consciousness, researchers now can detect our intentions and predict our choices before we are aware of them ourselves. The brain, they have found, appears to make up its mind 10 seconds before we become conscious of a decision -- an eternity at the speed of thought.
“Their findings challenge conventional notions of choice.
“‘We think our decisions are conscious,’ said neuroscientist John-Dylan Haynes at the Bernstein Center for Computational Neuroscience in Berlin, who is pioneering this research. ‘But these data show that consciousness is just the tip of the iceberg’ …
“In ways we are only beginning to understand, the synapses and neurons in the human nervous system work in concert to perceive the world around them, to learn from their perceptions, to remember important experiences, to plan ahead, and to decide and act on incomplete information…
“Such experiments suggest that our best reasons for some choices we make are understood only by our cells. The findings lend credence to researchers who argue that many important decisions may be best made by going with our gut -- not by thinking about them too much.
“Dutch researchers led by psychologist Ap Dijksterhuis at the University of Amsterdam recently found that people struggling to make relatively complicated consumer choices -- which car to buy, apartment to rent or vacation to take -- appeared to make sounder decisions when they were distracted and unable to focus consciously on the problem.
“Moreover, the more factors to be considered in a decision, the more likely the unconscious brain handled it all better they reported.”
(“Currents; Science Journal: Get Out of Your Own Way; Studies Show the Value of Not Overthinking a Decision.” Robert Lee Hotz. Wall Street Journal: June 27, 2008. pg. A.9)
I THINK THAT I am thinking. What do we see when we observe our own thought processes?
Stop the war between the head and the heart, the mind and the gut, knowing and feeling. Learn to balance both sides; add richness to your understanding.
Yang AND Yin.
