Who cleans up the problems generated by upper management at your company?

25 07 2006

I’ve often seen hard-working successful salesmen and purchasing managers devastated and years of relationship  development undermined when upper management changes a deal, strategy or situation without consulting or advising those directly involved. 

The success of salespeople and purchasing managers depends upon trust.  Trust between your company’s representative and the unique individual from the other company.  Trust based upon past performance and promises kept.  Trust developed through quality products and services.  Trust developed by creating a dialogue, listening and exchanging information in order to develop mutually beneficial solutions.  Trust takes time, patience, and a series of negotiations and transactions over time.   Trust that your company is supporting, and will continue to support sales and purchasing and existing relationships.

How many times have you seen executive corporate decisions provoke severe disturbances in the level of trust developed by sales and purchasing departments with their clients and suppliers?

Why don’t upper management executives value and protect these relationships? 

I think it is in large part due to the fact that most executives don’t have to “clean up” their own mess.  Executive management has no individual responsibility for their decisions that affect trust in other parts of the company.  They also expect customers and suppliers to accept that conditions can and will change at any moment, and in effect, are reducing the future effectiveness of their own sales and purchasing departments.  They rely on other departments to “clean up”, to explain, to renegotiate and to make the new policies work.  It’s considered part of the perks of executive management, to make decisions, but let others implement them.

Are there policies and procedures in place at your organization to review the effect a strategic or policy decision will have on trust and current relationships with suppliers and customers? 

Who is capable of “making a mess” at your organization? 

Who is responsible for “cleaning it up”?

Do you think that’s the way it should be?



Corporate Leadership and Managers still aren’t listening

Who do YOU trust?

When leadership fails – an example – the Mexican shoe manufacturing industry

24 07 2006

It’s quite interesting to watch certain businesses and industries succeed and fail, and try to identify the factors that lead to these very different outcomes.

For example in Leon, Guanajuato, the shoe-making capital of Mexico, the industry is under severe pressure from imported product, and lower costs from China, Vietnam, Brazil, and other countries.

It’s quite clear to everyone in the industry that there are several solutions to the problem.

  1. Ask the government to create trade barriers and import tariffs. This will only support the inefficiencies in the national industry, postponing the inevitable.
  2. Invest in design and create a brand. Shoes are purchased for two reasons, fashion and protecting your feet. The fashion market has much higher profit margins, but requires constant investment in research and development and marketing.
  3. Invest in technology. If your product is focused on low prices in the market, you must have low costs, and lower costs than your competitors. This might be achieved with new technologies.
  4. Create alliances within the industry. If China production costs are cheaper, but it takes 60 days for the product to reach the US, doesn’t it make perfect sense to create an alliance where the initial production comes from Mexico (5 days to market), followed by the mass production from China?
  5. Purchase the shoes from the overseas competition and close your production facilities.
  6. Create new markets, export to new markets.

Those are the choices, and what do you think is happening?

The majority of companies are pointing out the danger and requesting government intervention, but not implementing any other strategies to avoid the “doomsday” scenario.

The few companies (industry leaders) that have invested in branding, design, technology and purchasing from competitors are thriving, earning money and making profits.

Why is avoiding the obvious or inevitable, such common behaviour in most organizations and groups?

I believe it has to do with the failure of the leaders to move out of the Thinking-Identifying stage and into the Planning and Implementation stages.

The cycle of business leadership and management consists of:

  • Thinking-Identifying. Thinking and identifying important internal and external factors and understanding how they interact.
  • Planning. Using the data and information to formulate a plan and strategy
  • Implementing the strategy. Putting the resources and motivation behind the plan and “making it work”.
  • Reaction-Modification. Reacting and modifying the plan as the conditions change.

Many leaders are uncomfortable or unable to identify the major factors that are and will affect their companies. They are unable to create strategies and delay important and critical decisions because they lack data, or have too much of it, or don’t know how to properly analyze it and find conclusions. Without a strategy there is obviously no implementation, and the organization begins to react to situations created by others (crisis management).

This inability to read the market, identify market forces, create strategies and adapt to changing conditions will eliminate those organizations from the market. Creating strategy is not easy, and creating successful strategies is even more difficult. It requires excellent leadership and management decisions.

What are the known problems in your organization and industry?

What strategies are waiting to be created and implemented in order to prepare your business for the future?

Why isn’t it happening now?

Leadership is NOT about watching the competition

21 07 2006

Who is the leader in your industry and why? 

Is their leadership position related to: cost structure and distribution, creativity and innovation (research and development of new ideas and products), image and marketing (selling better), leadership and vision (creating the future and successful strategies)? 

At Slow Leadership, there is an excellent piece entitled “Slow Down and Play to your Strengths” which puts the idea of leadership and monitoring the competition into perspective.  It asks the question, do you have the courage, focus, patience, and thoughtfulness to manage and grow your organization on your terms? 

At first glance it appears very safe to follow, copy and react to the competition.  But what if the competition is watching and reacting to you?   This can only lead to a slow spiral of mediocrity and eventual stagnation and death of the participants. 

  • What are you creating and selling?  Why?
  • What strategies are you evaluating?
  • What risks are you willing to take to reach your objectives?

This concept also can be applied to your role and position at your company.

Who are you watching and copying or reacting too?

What strategies can you embrace or create, to become a leader and innovator inside your department or organization?

Related Links

Slow Leadership (Link)

Business Strategy, has it become a commodity? (Link)

Business Strategy, has it become a commodity?

18 07 2006

Here’s something I’ve written about earlier, but worth thinking about often.

Umair Haque has written Laws of the Post-Network Economy: Strategy is a Commodity in the BubbleGeneration blog.

His basic idea is that organizations are all creating and implementing strategy, it no longer provides clear differentiation from other companies as it did in the past. Strategy has become part of a “standard operating procedure”, it is a commodity process found in every business.

The playing field has been levelled.

Strategy is necessary, but no longer the important tool of change and value creation it was 20 years ago.

He suggests that the next value creation “tool” that organizations are and will be using is that of creativity.

“I think it is going to have to do with creativity. In a world where strategy is a commodity, creativity becomes the vital factor from which value flows. When everyone can think strategically about everything, the locus of value creation shifts from out-thinking everyone to out-creating them. The prime mover of value creation becomes putting the ability to create (goods, services, processes – even strategies) at the heart and soul of the firm.” (Link)

I’m a big believer that the best business ideas are those that no one else is currently using (Link). Once your business tools, human resources, sales and marketing and finance departments are all doing it like everyone else, it’s not going to be great, it’s not going to be exciting, it’s not going to create a profitable future.

What could happen to your organization and your industry if creativity is viewed and promoted as the most important business tool you have NOW, to create and prepare for the future?

On the other hand, what if Umair is wrong, and strategy is not a commodity?

What will occur if the future requires that we constantly “out-think” the competition?

Related Links

Strategy Redux – The Execution Economy

There are no new management and leadership ideas

First impressions, what can you do to change yours?

15 07 2006

First impressions do matter.

Seth Godin writes about his recent experience with a receptionist (Link), and has some observations on how this first contact could be made memorable, interesting and important.

I had two immediate thoughts after reading the piece. The first related to the Japanese custom of placing greeters at the front door of the department store….what message are they providing to customers by this action?
Second thought, what happens when everyone has a greeter, and the experience is no longer “special” but accepted as normal business procedure? You would notice if it was not there, and you would notice if it evolved and changed into something different.

Today everyone has a receptionist, it’s part of the normal business procedure, and as Seth points out, it is considered a necessary but usually low paying, low creativity position.

What could you do to change the receptionist and the first impression of your business into something special, different or unusual for the customer to remember?

Why aren’t you doing it?

The business leadership crisis, are you part of the problem?

6 07 2006

Rosa Say has given us some food for thought in a piece entitled Where’s the Boss at Lifehack.org. She identifies significant problems with executives today…..the inability to implement empowerment in the organization and the lack of executive involvement in the day-to-day operations. True leadership has disappeared from many organizations

A leader must understand what is happening at the day-to-day operations level if they wish to understand the business. The real action happens (or doesn’t happen) at this level, and not in the corporate boardroom.

The bosses job consists of two major activities: facilitating the work and efficiency of workers and creating strategies, goals and objective for the future. You can’t supervise efficiently, intervene or lead unless your people believe in you and your understanding of their jobs.

When was the last time you rolled up your sleeves and spent a full day at the operations level, listening, asking questions and observing?

Do you know what your people do and what is preventing them from doing it better?

Shouldn’t this be part of your daily routine?

Related Posts

Managing with Aloha (Link)

Corporate leaders and management still aren’t listening (Link)

How to do business in Mexico, Part 17

28 06 2006

The Mexican Institute for Competitiveness (IMCO) is a private think-tank and great source for macro-economic information about how Mexico ranks in competitiveness with countries globally.

IMCO, The Mexican Institute for Competitiveness

“The Mexican Institute for Competitiveness (IMCO) is a private applied research center devoted to studying issues that affect the country’s enterprises competitiveness in a context of open market economy. IMCO is a non-profitable, independent, non-partisan institution which operates thanks to private sponsors grants.”

IMCO is actively working with and educating Mexican government officials and private industry leaders as to Mexico’s advantages and disadvantages as it concerns global competitiveness.

Most of the site is available in English.

For more information:

Instituto Mexicano para la Competividad, A.C.

Leibnitz 11 – 602

Colonia Anzures, CP 11590, Mexico D.F., MEXICO

Tel.  +52 (55) 5985-1017 to 19 and 5985-0249 to 50

Fax  +52 (55) 5985-0251

Email   Contacto@imco.org.mx