ast year my late employer’s innovation & strategy group surveyed recent management literature to determine what they should be developing ‘thought leadership’ material on. Here’s their list of the 20 things that are keeping executives awake at night. The ‘Usual Solutions’ column is my own observations — my ex-employer wouldn’t be so candid about their customers:

Issue Usual Solutions (since the dot-com bubble burst)
Increasing Profitability, Productivity, Efficiency, ROI, Reducing Overhead Cut costs, layoffs, outsource, offshoring, bend accounting rules, lobby government for subsidies & favours, smash unions, subjugate employees
Increasing Growth, Lack of Innovation, Falling Prices & Commoditization Acquire competitors, enter new markets, change the packaging, create ‘sequels’, test market
Finding & Retaining Top People, Management Succession, Executive Compensation Head hunters, executive perks & stock options, other profit-based incentives
Improved Decision Making, Managing Complexity Increased specialization, teams & communities of practice, collaboration tools, knowledge management
Acquisitions & Alliances Acquire competitors
Succeeding in New Markets Replicate what worked elsewhere
Ineffective Marketing Programs Change ad agencies
Regulatory Constraints Lobby government to de-regulate
Economic Uncertainty, Deflation / Inflation Focus short term, lobby government to fight inflation
Fickle & Demanding Customers / CRM Focus short term, outsource production, sue customers
Supply Risks Play suppliers off against each other (Wal-Mart style)
Competitive Threats Create oligopoly, buy, sue & intimidate competitors
Litigation Risks Stonewall, intimidate by countersuit, hire ‘risk management’ experts
Employee Fraud, Theft, Incompetence Minimize number and authority of employees, deploy cameras and other security methods
Optimal Capitalization & Legal Structure Window-dress profitability to reduce cost of equity, lobby government to fight inflation to reduce cost of debt
Cash, Debt, & Working Capital Management Minimize inventory, factor receivables, shift working capital to outsourcers
IT Vulnerability Hire consultants to assess & address vulnerabilities
Taxes Offshore holding companies, complicated structures, lobby government for tax breaks, tax avoidance schemes
Protecting Intellectual Property Patent everything, sue infringers, lobby government to enhance protection laws
Creating and Operating New Businesses Not much of this going on these days

This list probably appears negative for two reasons: (1) executives generally respond more aggressively to (and stay awake more worrying about) threats and risks than opportunities, and (2) in the last decade shareholders have become much more conservative and risk-averse, and expect executives to manage ‘their’ businesses accordingly. That means the enormous innovativeness of the 1990s is gone, as companies find they can improve profits with less risk by cutting costs than by introducing innovative improvements. It’s not a viable long-term strategy, because you can’t cut your way to greatness, and because there’s a limit to how much you can reduce cost, and because with outsourcing and offshoring in lieu of innovation you’re not creating new value for customers and you’re reducing customers’ ability to buy your product. It’s the ‘race to the bottom’ and we’re almost there now.

What’s most remarkable to me is the dramatic shift these issues and solutions demonstrate in the relationship between big businesses and the ‘five forces’ they interact with: employees, customers, suppliers, competitors, and communities. It’s a shift from the exuberant short-lived one in the 1990s of cooperation, collaboration and empowerment, to the adversarial relationship of litigation, intimidation and mutual distrust we see today. It’s a shift that closely parallels what has happened in the political sphere in the US — from what Lakoff describes as the liberal nurturing parent worldview, to the conservative strict parent worldview. And it’s as bad for business, in my opinion, as it is for politics.

Before we can restore the upbeat 1990s business climate, two things need to happen:

  1. We need to oust the Bush regime, and replace it with a government that encourages innovation, entrepreneurialism and small business, instead of corporatism, oligopoly, and more rights for corporations than for consumers.
  2. We need a citizen-consumer rebellion against corporatism, and against businesses who lie to customers, sue customers, sell poor quality, uninnovative products, mistreat employees, offshore jobs, and are socially and environmentally irresponsible. That rebellion will produce both changes in spending habits and new laws.

But in the meantime, those of us that advise businesses need to (at least for now) set aside the ‘nice to do’ business improvement ideas of the 1990s, and develop some hard-nosed new ideas that address the 20 stay-awake issues above in more creative and positive ways than the ‘Usual Solutions’ that prevail today. Because these issues are real, and until we come up with better answers, the ‘race to the bottom’ will continue.

Here are eleven of my ideas for addressing these issues in more positive ways. Implementing these ideas will be the business of my new businesses, Meeting of Minds and The Caring Enterprise Coach. I’ll be posting more on these businesses, and the eleven ideas below, here and on their new websites soon. In the meantime I’d be interested in your ideas on which of these ideas is most saleable, and to which companies.

Issue Dave’s Solutions
Increasing Profitability, Productivity, Efficiency, ROI, Reducing Overhead Personal Collaboration Technologies Suite: A set of intuitive desktop tools that allow front-line workers to see and hear each other and to work together without having to be in the same room.
Personal Productivity Improvement Sessions: One-on-one tailored sessions with individual front-line workers to assess and improve their effectiveness in the use of information and technology.
Increasing Growth, Lack of Innovation, Falling Prices & Commoditization The Innovation Amplifier: A process for assessing your business’ current innovation processes and culture and improving it using proven techniques and incentives.
Finding & Retaining Top People
Improved Decision Making, Managing Complexity
Acquisitions & Alliances
Personal Content Management System: A simple, configurable weblog-based application that allows front-line workers to capture, organize, share and publish their own and others’ knowledge, and serves as a subscribable electronic filing cabinet.
Social Networking Applications: The Expertise Finder and other tools that enable front-line workers to find the experts and knowledge they need to do their jobs effectively.
Ineffective Marketing Programs The Viral Marketing Toolkit: How to use viral marketing to promote your products and services without coercive and expensive advertising.
Economic Uncertainty, Deflation / Inflation Economic Scenario Builder: A simulation tool that shows the impact of changing economic situations on key business metrics.
Fickle & Demanding Customers / CRM
Supply Risks
The Customer Handshake: A flexible non-legalese purchase agreement and customer relationship model written from the customer’s instead of the supplier’s perspective, which articulates simply the rights, the responsibilities and the commitment of both parties to mutual benefit from the transaction.
Cash, Debt, & Working Capital Management The Working Capital Monitor: A tool for forecasting, managing and optimizing your business’ cash and working capital
Creating and Operating Great New Businesses New Collaborative Enterprise Incubation: How to set them up, how to recruit members, designing the statement of operating principles and related legal, financial and business advisory services.
Entrepreneurship Coaching: Comprehensive training and continuous assistance on how to build and operate a small collaborative business successfully and effectively.

Artwork by Germany’s Joe Kurz from his ‘Sleepless Nights’ series.

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  1. Sean says:

    Don’t kid yourself about a governmental change fixing anything.An increase in each individual’s level of awareness (usually nurtured by responsible parents first and good teachers second) is the area of greatest need within this country. I believe that that increase will be followed by less need for the crap that businesses try and shove down our throats.Governments are run by businesses not the other way around. People who make up governments want money and power. Individuals cannot provide either. Governments will always be self-serving no matter how noble their primary intentions.Sort of like labor unions.

  2. Dave Pollard says:

    Sean: You’re right about the need for changes in awareness and education, but by the same line of reasoning if a government change won’t make a difference I might as well vote for Nader. I just can’t believe that a Democratic president and congress would be quite so quick to support corporatism and oligopoly, which are enemies of innovation, entrepreneurship and small business. Of course as you point out we have to do (more than) our share on the demand side as well. But we need help from those in political power as well, or our attempts to educate each other will be up against Nike’s ‘constitutional right to lie’ about its sweatshops, and the massive ‘advertising’ budget that can feed that lie.There was a music awards show on the other night that featured some rap group blathering on, walking around this HUGE (20-foot-long) Nike sneaker. They practically made love to it. It’s going to take a lot of education to overcome this kind of crap.

  3. Colin says:

    Businesses that are thinking as short term as you describe are only surviving, not self actualising. At some point the analysts must realise this and start to rate more highly those businesses that are creating long term value by building trust and satisfaction among their suppliers, customers and employees not just wielding power against them. How can we educate the analysts not to fall for the short term tactics that so many companies use?

  4. Dave Pollard says:

    Colin: That’s a great question. I used to work for the research dept of a brokerage firm and they’re obsessed with the short term. In fact short term fluctuations mean more transactions and hence more revenue for them, so to some extent they’re rewarded for short-term thinking. The thought leadership (and demand for long term value creation) will have to come from pension fund managers, who wield a lot of clout and are far more interested in the long term than the brokers. They need to work on the SEC and the FASB to get those bodies to force companies and analysts to provide more information on companies’ long term strategies and prospects.

  5. mrG says:

    My own thoughts, but admittedly from a business outsider:Increasing Profitability, Productivity, Efficiency, ROI, Reducing Overhead: The key is in your last advice, Collaborative Business. Most businesses can slash their IT costs through open collaboration with others in the same business, and by strategic sharing with complementary businesses, they can reduce shipping, staffing and other costs through consolidated transactions, dejobbing people and outsourcing various middle-management tasks to small business entrepreneurs. The IT biz _knows_ this works, although most of them do it in secret, and everyone who’s ever been to kindergarten has been trained in how to make it work.Increasing Growth, Lack of Innovation, Falling Prices & Commoditization: We see the solution to this in WalMart — if the product is even only superficially new, you can re-enter the price war with a fresh price point. The trouble is, most equate innovation with addition; many Japanese products, maybe exemplified by the Hello Kitty craze, learn to innovate by making room for more simplicity. There is, I think, a terrific market for ever more cleverly simple solutions, far more so than for ever more complex swiss-army knife products.Finding & Retaining Top PeopleImproved Decision Making, Managing ComplexityAcquisitions & Alliances: Start treating employees more like graduate students and less like gradeschool wards. In my recent job-scrounging, I’ve seen some of the worst of the worst in employers demanding trust and commitment while giving none in return, and very few offer _real_ responsibility. For example, why can we not organize the supermarket as a collection of small shops (like Toronto’s St Lawrence Market) even if every shop in the store has been bankrolled by Loblaws? Give the departments maximum autonomy and instead of using the corporate umbrella to stifle them, use it to give them all additional power.Ineffective Marketing Programs: Tell us what the innovation does for us. If they can’t be truthful about that, then it’s a signal that we need to rethink the innovation.Economic Uncertainty, Deflation / Inflation: No solutions here other than Kipling’s notion to forget about things you can’t control.Fickle & Demanding Customers / CRMSupply Risks: Again, co-operation. Engage customers from the start. In free-software circles, we don’t decide when the product is done, the ‘customer’ makes the decision on when to buy in and when to opt out, and the projects tend to anneal to keeping the number of customers at the highest within the goals of the project. Let customers and suppliers in on the game instead of erecting artificial turf fences. We’re all in this together.Cash, Debt, & Working Capital Management: Out of my league here. I understand debt, but not the other two ;) In an open and collaborative enterprise where we can recognize that the expert we need doesn’t work for us, then we are left with the “Lillies of the Fields” notion that, if we are essential to the ecology, the ecology will sustain us in return.Creating and Operating Great New Businesses: Gets back to the first item in that we need to know who to collaborate with, and be open to people recommending people to us for collaboration. That’s one. Another is to open new common and open-standard infrastructures to build new avenues for new businesses. For example, why on Earth does Skype need to own the protocol for VoIP? Wouldn’t it be vastly more lucrative to have one universal open standard for VoIP and allow Skype and others to all design tools and services for it? Ditto for instant messenger, ditto for desktop applications APIs, ditto for webpages. Everyone wants to be the monopoly, even in the face of what we know about the Nash Equalibrium.

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