Telling It Like It Is

THE ENTERPRISE--COLLABORATION IS ESSENTIAL, EVEN WHEN THE COVID ERA MAKES IT DIFFICULT.

THE ENTERPRISE--COLLABORATION IS ESSENTIAL, EVEN WHEN THE COVID ERA MAKES IT DIFFICULT.

 

Staying at home to avoid exposure to Covid means a lot of TV time. My favorite TV pastime is watching team sports: Football, Basketball and Hockey. There is a common misunderstanding that teamwork and collaboration are one and the same thing. That’s close, but not quite right. A couple of decades ago, I was asked by a publisher (Berrett-Koehler in San Francisco) to write a mini-book on Collaboration. Sounds easy, right? Not quite. Covering this kind of topic in 25 pages, is harder than writing a longer book.

Teamwork and Collaboration are different but interdependent parts of the same process. Good teams find ways to collaborate, to win. Great teams find ways to work together, that makes their performance through collaboration evident. Elite teams take collaborative teamwork to a whole new, almost instinctive level.

You can see that in football (Brady and Gronkowski) where a passer and receive seem to have a second sense about where to connect. 

In basketball, the fast break is the ultimate rapid collaboration, which results in such fast, effortless scoring that it demoralizes the opposing team. Only through careful collaboration, exceptional teamwork and lots of practice, can fast breaks look almost so easy and effortless.

In hockey, the Power Play attacks with a plan that has invested a lot of time understanding their roles, and how they can best collaborate to break down defenses—and deceive the goal tender—to score.

A former professor friend reminded me that in business (and lots of other areas) Covid has made the collaborative process much more difficult. Why? Because at its core collaboration is all about people, figuring out how to best work together, to accomplish a common, agreed upon goal. However, the lack of face-to-face contact removes much of the non-verbal communication and feedback necessary to resolve differences and arrive at the best way to collaborate.

Studies show that 70-90% of communication is non-verbal; body language, facial expressions, tone of voice (or silence, which has its own tone). Video conferences only show the head and upper torso, but not the way a person is sitting, leaning, shifting, squirming, or generally sending non-verbal signals about whether that person agrees, buys in, supports and will work toward the consensus based action. If participants don’t like the consensus at all, and don’t, can’t, or won’t  “say” (verbal) or show it, make obvious gestures or expressions that teammates and/or co-collaborators can easily recognize as disagreement and then discuss, argue and agree upon the result.

Since few people want to take the time to read a whole book these days, here are two pieces on collaboration The first was written as a brief magazine article. The second was lifted/excerpted from my book. The say largely, but not exactly or entirely, the same things. 

After you think about this whole collaborative/teamwork area, you’ll understand why changing just a single member of a unit: a basketball team, an offensive line in football, or a line in hockey—changes everything. (The coach is "that person in authority” mentioned.)

To succeed in the era of Covid, understanding collaboration is more important than ever.  Key point: it’s all about people and how they behave and react—and work together.

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Collaboration: Working together is more fun

©John Mariotti 2000

To get things done through collaboration, a group works together toward a common, agreed-upon set of goals.  Until the goals are agreed upon, there is a danger that the collaboration will be fragmented and not cohesive.  This wastes energy and demoralizes people.

Common, well understood and mutually agreed upon goals are essential to getting things done through collaboration.

 A group that wants to get something done must encourage collaboration by valuing the input of its members--even when that input does not appear to be immediately useful.  Managers, leaders and other people with authority can have one of two effects on collaboration--a stimulating one or a chilling one. 

The stimulation comes from cases when the person in a lead or authority position genuinely appreciates the input and attempts to use it --or at least incorporate it into their thought processes as the group moves toward decisions.  The chilling effect occurs when the person in authority acts with disdain, disinterest or open contempt of the ideas presented.  This is demeaning to the individual giving the ideas and chilling to the group's collaborative efforts. 

Positive reinforcement and support of the group by persons in authority positions is an essential part of getting things done through collaboration.

Smart people will try to use all the collaborative help they can get.  Smart workers will recognize the kind of manager they have and conduct themselves accordingly--this means active collaboration with a good manager, and cautious input with a poor one.  In either case, it is important to avoid becoming discouraged--even by a poor manager; they sometimes wake up and see the light as information accumulates and collaboration begins.

We are no longer in an age of bosses who can succeed by controlling and directing people.  Things are changing so fast that people want and need influence over their own destinies.  This means the opportunity for collaboration is great, but the leaders must change from old command and control behavior to the new one of leadership, motivation and involvement. 

The traditional way to control organizations was to have policies and procedures, which were followed and rigidly enforced

When conditions, circumstances and competition change rapidly, these old, rigid rules fail.  They become inflexible, slow, obsolete, and ineffective.  This is when collaborative groups of people can step forward to save the day.  Personal values and integrity will beat policy manuals every time for assuring that the right things get done the right way.  Collaboration will help to assure that the right things are getting done.

Unfortunately, unless there is open information sharing across all of the so-called “boundaries”-- between people, between departments, between offices or plants, and between customer and supplier companies, true collaboration is difficult or impossible.  Without sharing of information, the collective knowledge of the groups involved is not used to solve the problems.

A Checklist for Successful Collaboration

q   Form a group that is likely to cooperate first, then collaborate. 

There should be something in it for each member.

q  Make sure the current situation is clearly understood by all constituencies.

q  Establish the leadership and sponsorship of this collaborative group and identify the natural leaders.

q  Set group goals and objectives, and discuss potential outcomes, timetables, and resource needs.

q  Establish measures of progress, both tangible and intangible and measure results and review how the group is getting them.

q  Provide regular feedback and document progress and agreements. Keep records of disputed issues and communicate openly and often.

q  Identify known obstacles and challenges and seek help in eliminating them.

q  Build partnership relationships to gain help and sustain progress, but choose partners carefully

q  Concentrate on new learning through the collaboration. Apply collective wisdom of the group to test the outcomes.

q  Celebrate and share the knowledge gained about collaborative success. Leave a legacy of successful collaborators to seed new teams.

"The only one who likes change is a wet baby."

"There is no use whatsoever trying to help people who do not help themselves.  You cannot push anyone up a ladder unless he is willing to climb himself. --Andrew Carnegie (industrialist)

"Build for your team a feeling of oneness, of dependence upon one another and of strength derived by unity." --Vince Lombardi (football coach)

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What is Collaboration?

An Excerpt from the book Collaborating for Success, ©2000, Berrett-Koehler. San Francisco. ©John Mariotti 2000

Many people would say collaboration is teamwork, and that is close, but not quite right.  Teamwork has become an over-worked word in America.  Teamwork is not always collaboration--although collaboration is usually good teamwork.  Let's start with a definition.

Collaboration is an act of shared creation or shared discovery.  At the heart of collaboration is the desire to create something, discover something, solve some sort of problem, or get something done. 

That should be the case with team efforts, but it isn't.  Too often, teams are formed by just assembling a group of people.  They are assigned a purpose that is sometimes unclear, and given a set of goals (if any are defined at all) that they had nothing to do with choosing and are a long way from a shared creation or discovery.  Maybe a problem solving effort is the team's purpose.  Even then they are supposed to figure out how to be good team members while they determine how to solve the problem.  The two challenges are not even related--the first involves interpersonal and group interaction, and the second requires problem identification and solving skills.

One part of collaboration is a relationship. 

Throwing together a group of people no more insures a relationship than dumping a bunch of ingredients in a bowl insures that a cake will result. 

Teamwork can become monotonous, because similar problems often require similar solutions and the team members will fall into familiar, comfortable roles.  You do this; I do that; someone else does something else.  This is not collaboration--it is simply a division of work.  This might have been collaboration the first time we went through it, but it is not any more.  Collaboration is original.  Circumstances are constantly changing.  Thus the team described above is not really collaborating--they are just going through the motions.

Don’t confine your definition of collaboration to a single group or team of people. That is not how it works in many cases.  The most powerful collaborations are spontaneous ones.  The people involved work together in a technical sense, but not necessarily in a literal sense.  When a loose-knit group of people from different areas or departments (or companies!) decide to collaborate, real breakthroughs can happen.

Another part of collaboration is a process

Let's consider a more complete definition:

Collaboration is the process of two or more people with complementary skills and/or knowledge interacting to create a shared understanding where none had existed, using understanding to create something, discover something, solve some problem, or get something done.

Nothing in that definition says these people need to be part of a team. They may not even need to be in the same place at the same time.  What is important is that they engage in a process--a series of steps in a defined order that will lead to a desired outcome.

Collaboration is the end of a series of steps.

A group must go through a series of steps on the way to collaboration.  Sociologists have a shorthand set of terms, which describe this sequence:

• Forming (getting to know each other),
• Storming (fighting for control, power, etc.),
• Norming (arriving at accepted group norms for how things are done and people behave),
• Performing (Getting on with the successful work).

Another set of collaborative relationship steps are shown in the table below.  It would be nice to jump right to Cooperation or Collaboration, but unfortunately, it is often hard to skip the earlier steps.

Relationship Stages of a Collaboration

Peer Relations     Stance                 Key Characteristics              

Combative            fighting                Aggression, resistance, damage

Competitive          striving                 Rivalry, mixed motivations

Cooperative          agreeing               Acquiescence, obedience

Collaborative         partnering             Synergistic, interactive

Source:  If Aristotle Ran General Motors, Tom Morris, Henry Holt and Company, New York, 1997

The best you can hope for is to move past each step of the way quickly and positively.  The important thing is to know about all these steps, and to avoid poisoning the relationships in their early stages.  It will be much harder to get to collaboration if the storming or combative stage becomes bitter and hurtful.

Constructive disagreement

There is a widespread misunderstanding that to be a good team member and a positive collaborator means to agree with the group or be quiet when you disagree or don't understand.  Nothing could be further from the truth.  Powerful collaborative efforts come from constructive disagreement.  Constructive disagreement is flexible, always trying to see other viewpoints that might change a person's perspective and position.  Destructive disagreement is a "take it or leave it" mentality, one which says, in effect, "I'm right, you're wrong, end of discussion!"  Failure to understand denies you the ability to be a collaborator.  The only dumb question is the one that is not asked.  Understanding allows everyone involved to pool knowledge and viewpoints.  Even if you have no new knowledge to apply to the solution, sometimes just a different viewpoint will expose new solutions. 

Four Powerful Questions to Build Collaborative Groups

• "Will you help me, please?"
• "I'm sorry, I don't understand."
• "I don't know, but I will find out and get back to you"--and then be sure to do it.
• The hardest: "I'm sorry, I was wrong."

Understanding the task is one of the most important ingredients in collaboration--what problem must be solved or what new discovery or creation is desired.  Another important part of collaboration is saying what you will do--and then doing what you said you would--because others are depending on you to hold up your end of the deal.

Collaborating in a crisis can happen faster than collaborating simply to generate positive change.  Crisis collaboration is also easier to get started, but harder to sustain, especially after the immediate crisis is resolved.  Many companies pull together when their existence is threatened, only to fall apart after they have weathered the storm. 

For real collaboration to occur, trust must exist.  Talking about collaborative behavior is “easy", but achieving true collaboration is “hard."

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NOTE: In the end, great teams learn collaboration—although the journey to getting there is often rocky.

In sports, the coach & staff try to enable the collaboration, but ultimately it happens when the team members settle into their roles and trust each other to do their parts. When you watch any team at work—in a game, in an office or on a Zoom call—test it to see if these conditions have been met. (You will already know by the results, but watching how it gets there will help you learn how to do it, over and over.

 

THE ENTERPRISE— A WALK AT THE MALL--SCARY--BUT PROPHETIC? CASH IS LIKE OXYGEN!

THE ENTERPRISE— A WALK AT THE MALL--SCARY--BUT PROPHETIC? CASH IS LIKE OXYGEN!

This edition was panned to lead into one of my most popular old columns—Cash is Like Oxygen— posted below. 

While I was thinking about what to say as a lead in, my wife and I decided to go for a walk in the Mall—specifically the Polaris Fashion Place Mall on the north side of Columbus, OH.  That started a sequence of events, that led to this long “current events” preamble:

1)  I was stunned by how empty & desolate the Mall was (more on that). Many stores closed or closing, or with totally new occupants—unproven upstarts?

2) When we went home, I exchanged emails with son Mike, who recapped a presentation by a Fannie Mae exec.

Being in construction, Mike is very interested in the future of housing, the recovery, and what Fannie Mae is doing/planning to do. The questions cited were: Will the vaccines Work? IF they do work, will consumers return to prior consumption levels?  What do you think? When?

3) Just today, less than a week after I started writing this, Polaris Fashion Mall missed its monthly rent payment. The company’s stock plummeted and the mall operator retained advisors to help review strategic options. (There’s a 30-day grace period to pay the rent—whether it can, or will, is anybody’s guess.)

My answers were:

1) Yes, the vaccines will work (pretty well), at least on known Covid variants. Better than Flu shots, not perfect, everywhere, for everyone.

2) If the vaccines work, will enough people get the shots to begin to reach "Herd Immunity"  (70-80%) ? Doubtful. Right now 1/3 of people are resisting the shots

3) This is like a place hit by a hurricane or a tornado. It will not be the same for years. First sign of real recovery: Sports and entertainment venues begin filling up.

We went for a walk at the Mall last week.. The photos are from Polaris Fashion Place Mall, a few miles from home—mid-afternoon on a week day. See all the people shopping there? (No?) The other large Columbus indoor mall, Tuttle Crossing, is reportedly in economic trouble too. With Sears is gone & Penney wounded & Dept. stores like Malls relied overbuilt/failing/consolidating, while full of unsold goods and empty of shoppers. Malls are hunting for any way to fill the unused space with something that can produce cash flow. 

No. I could have taken these at countless locations. There were a few people, but very few of them were carrying merchandise. Stores are open restricted hours 11-7 most days. Many are full of inventory (tying up cash) like in the aisle shot of a Macy’s store—goods that have been there for months. 25% of the former stores are GONE…another 25% are just hanging on. Half the places in the Food Court are closed. But no one was in them anyway. To add insult to injury an Outlet Mall opened just over a year ago, 11 miles north of Polaris.

I really don’t know how these companies & retailers can even stay in business. All their fixed costs continue, but their revenue based cash flow has been devastated.  A huge store might have a few (3?) people working in it…and not sell enough to even pay for them. Inventory, aging in style and seasonality ties up their (cash) working capital.  

A Lifestyle “Mall” (outdoor shopping areas) Easton Town Center is doing better—but not great.) Movie theaters are in deep trouble. Crappy movies. Quality is going to streaming. Restaurants that remain are down more than 20%, and many of them are simply closed—gone. Outdoor dining and takeout/delivery got them through summer & fall, with cash flow, but winter weather is coming  like a lion right now. Indoor dining is open, in some places, at a fraction of the seating, but even that is often not full.

People are shopping more on line, or at ”popular priced” big box retailers like Target, Walmart, Kohls, etc. Just look at the parking lots. Grocery stores are busy. Costco was full on Monday at mid-morning. Even drug stores are stressed, but less so; they're simply overbuilt; too many of them, too close together. 

Indoor dining will still be ailing until it warms up: May? Maybe. Bars may fill up as curfews are lifted. Will consumers return to prior consumption levels? No, not for at least a year or two. And then from a different array of stores and shopping venues. 

 

This is a massive structural dislocation. When will things come back? Who knows. Act too fast and you burn through precious cash. Act too slowly and you miss a chance to generate cash flow.  Watch to see when people feel OK about sitting shoulder to shoulder,  in a stadium, or a theater or concert, yelling or cheering. Maybe 2+/- years from now…Maybe? 

Key takeaways  from my exchanges with Mike.

• The pandemic has ACCELERATED traditional retail's demise. 
• Hurricanes stimulate the economy via repairs; conversely, the pandemic didn't do "physical" damage to be repaired.
• Government’s actions did psychological and economic damage—tough to repair.
• "Retail" will be re-born to match new lifestyles. ("Going-out" is not dead and gone, although it feels that way (in wintry Ohio).
• Consumption & shopping habits have shifted many times through decades (e.g mom & pop, discount & department stores, 1-800, TV, Big boxes, online, etc). 
• There will be more shifts of where/how $ are spent, and on what before it settles down…to a New Normal...someday.

By then the government will have dumped more than $5 Trillion (all borrowed or printed money), to fix the mess it made, and try to prop up the people it hurt. In doing so, handouts are destroying the people's "will to work” via too-lucrative unemployment and welfare payments. (Most people are saving more than ever of the government handouts. They are no fools; they know this is a temporary solution—and a very expensive one at that.)  Many parts of the trillion $$ handouts haven’t even been used and yet, more are being authorized. 

Why? They are trying to replace cash flow! No cash flow = no Oxygen. Cut off the oxygen to any living organism and it dies! 

Somebody has to eventually pay for all this welfare; welfare which kills the will to work, and the spirit of free enterprise and capitalism. (Socialism has been tried over and over. It doesn’t work. Someday, (as Margaret Thatcher once said) "other people's money runs out," and gratitude turns into resentment.)

 

Here’s what I wrote 25 years ago...

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Cash is like Oxygen.

Without it, you can't survive long enough to make a profit.

©John Mariotti 1995

Lately, I've encountered a number of companies who seem to be running short of cash. At the same time, cash flow appears to have fallen out of vogue as a hot measure for management theorists, being supplanted by economic value added (EVA)--a term coined by consultants at Stern-Stewart. Strong   Positive EVA measures depict a business that is earning returns in excess of its cost of capital.

This shift in the measurement emphasis may be creating a problem. While a positive EVA indicates good long-term business health, cash flow is the ultimate necessity for short-term survival.

Most business people are familiar with the income statement and the balance sheet. These two accounting stalwarts are where encounters with the IRS most often occur. As a result, most managers have learned to emphasize pre-tax profit and various balance-sheet ratios as the prime indicators of financial well-being.

Cash flow, the third major measure, is too often ignored. When you show a negative profit, but maintain a positive cash flow, life goes on--for a while at least. Run out of cash, and trouble brews real fast. Payrolls cannot be met. Suppliers cannot be paid. New products cannot be launched.  

My most memorable personal cash-flow crunch occurred just before I became a newlywed. The $100 deposit on a new apartment (this was a long time ago) was due. Since I was fresh out of grad school and hadn't earned a paycheck in over nine months, I was down to my last $50 in cash. The first paycheck in the new job was four weeks away. I was forced to humbly ask my fiancée to help. She didn't have much more than I did, but at least she'd been working. Together, we scraped up the $100.

Whether it is a personal or business crisis, that "out of cash" feeling is very unpleasant. When entrepreneurs start new businesses, they often go deeply into debt. Some max out their credit cards. Others mortgage their homes. Only the fortunate few find an "angel"--an investor who puts up seed money for a “modest” part of the equity in the business, in contrast to venture capital investors who want majority ownership. As these businesses grow, their margin for financial error is usually quite small.

Planning for cash needs is not all that complex. Yet many companies fail to do it properly. Often, they're misled by income-statement and balance-sheet projections that show the company will be financially healthy at the end of the year--if they get that far.

Astronauts who take off on a long space flight must take along plenty of food and water (their "healthy balance sheet"). If they happen to run out of oxygen any time between takeoff and landing, all that food and water is of no use to them. They will be goners. Cash is like oxygen. When it's there, it's easily taken for granted. When it's not, death can come quickly.

Why do many budding entrepreneurs overlook this simple fact? They fail to do an accurate, detailed, and realistic cash-flow projection on a month-by-month, week-by-week basis. The killer is usually working capital needs. To make a product, it is necessary to purchase raw material and parts, and to pay employees who convert that material into the product. You also have to pay for product designers, tooling, equipment, a sales force, marketing materials, travel expenses, phones, computers, etc. And those outlays must be made before the first product is sold. 

Keep in mind that "sold" doesn't mean you have an order. It means the product has been produced, shipped, and “paid for.”

If product design takes four weeks, and the lead time to obtain materials and produce the product is another four weeks--both unusually short periods compared with real situations--and if nothing major goes wrong, then at least eight weeks worth of working capital is needed for inventory, payroll, overhead expenses, and so forth. The payment terms--usually 30, 60, or 90 days--don't start until the product is shipped.

Since we started eight weeks in the hole, we may now be 12 to 21 weeks without any cash coming in!  Easily one-quarter to one-third of a year may elapse with all the cash flow going out, rather than coming in. At this point, the venture capital "vultures" may begin to look like friendly creatures.

It is hard to believe that a company with a great product, big potential profit margins, and strong market demand can still end in financial collapse. But it happens. And, ironically enough, sometimes the bigger the demand, the faster and harder the cash problems hit--all because inadequate attention is given to planning for cash needs.

Before you take off, be sure to check your oxygen supply carefully. You'll enjoy the journey more--and you'll still be around at the end of it.

 

BEST WISHES

JOHN

 

THE ENTERPRISE--HOW DID THINGS GET THIS WAY--PART 1? YOU MIGHT BE SURPRISED TO KNOW.

THE ENTERPRISE--HOW DID THINGS GET THIS WAY? SOME INSIGHTS…

 

WE ALL WONDER HOW MANY THINGS CAME TO BE…HERE ARE TWO OF THEM

I wrote these and many other columns you’ll read in THE ENTERPRISE twenty years ago—in the year 2000.

 

We forget that the USA’s mere 200+ years in existence is but a small part of history. At least 2000+ years came before the USA was even imagined. During a lot of that time, Rome was the dominant power in the world, and “horsepower” (not of the engine type) was the principal means of travel. 

 

We don’t realize that the Internet, the Telephone and Interstate Highways, made us forget predecessors like the Telegraph and Railroads.. Those were the big breakthroughs of the prior century, which allowed information to spread across the US faster than "the speed of a horse.” Before that, and the spread of Railroads paralleled by Telegraph lines, there was the Pony Express, delivering the mail—“ at the speed of a horse! 

 

(This past holiday season some USPS Mail behaved like the Pony Express, as Christmas cards mailed in December were delivered in late January!) 

 

Keep reading to learn how Roman chariots determined the design of US Railroads, and even the Space Shuttle. The title is a tipoff. Lots of things were determined before this country ever existed.

 

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How a Couple of Horses' Asses Changed the World

©John Mariotti 2000

There are a lot of people in a lot of companies that resist change.  “We’ve always done it that way, and it’s been good enough for years.” is the cry.  In the age of cyber speed, old ways of doing things die hard and the reasons for them are often lost in the annals of corporate history.  Well, here’s one that won’t be any longer.

The US standard railroad gauge (distance between the rails) is 4 feet, 8.5 inches. Why was that odd gauge used?  Because that's how they built them in England, and the US railroads were built by English expatriates.  But why that spacing?  Because the first rail lines were built by the same people who built the pre-railroad tramways, and the people who built the tramways used the same jigs and tools that they used for building wagons, which used that wheel spacing. If that’s so, why did the wagons use that odd wheel spacing?

Well, if they tried to use any other spacing, the wagons would break on some of the old-long-distance roads because that was the spacing of the old wheel ruts.  The first long-distance roads in Europe were built by Imperial Rome for the benefit of their legions, and used ever since. The ruts, which everyone else had to match for fear of destroying their wagons, were first made by Roman war chariots which were made to be just wide enough to accommodate the rear ends of two war horses!

The United States standard railroad gauge of 4 feet, 8.5 inches with which we all still live and use was based on a centuries old specification for an Imperial Roman Army war chariot—and based on the width of a horse’s ass—well, two horses actually! 

So, the next time you are told “we’ve always done it that way”, look around you.  There may be a horse’s ass or two involved in that reasoning.  And if you are inclined to go with the flow and not argue for the change—think about the implications. 

But, our little story isn’t even over. When we see a Space Shuttle sitting on the launch pad, we see two big booster rockets attached to the sides of the main fuel tank.  These are the solid rocket boosters (SRB), made by a factory in Utah.  The engineers who designed the SRBs might have preferred to make them a bit fatter, but the SRBs had to be shipped by train from the factory to the launch site. The railroad line to the factory runs through a tunnel in the mountains, and the SRBs had to fit through the tunnel, which is slightly wider than a (you guessed it!) railroad track.  Well, we all know where the width of the railroad track came from.

Thus a major design parameter of one of the world’s most advanced transportation systems was determined by a couple of horse's asses!  I wonder who will determine the critical decision points on your company’s next project.  

Hopefully, whoever it is will have heard and remembered this little story -- and make wise decisions based on good reasons—and understand the basis for those reasons completely!

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We just came through a political/election season that may well change the course of US history more than any other. Voting by millions of insecure, generic mail-in ballots were accepted and used (some say mis-used, which is probably true) The “stop" in vote counting in many battleground states (in the wee hours of election night) is believed by many to be part of a “reset” to see how many (insecure) votes needed to be “found” and added to Joe Biden’s totals, to overcome Donald Trump’s margin at the  polls and on secure absentee ballots. 

 

Believe what you want, the polarization in the USA, was fueled by the Mainstream media’s pervasive communications (formerly known as  “News”). The middle part of the USA is now known as “flyover country” because of where the media, financial and political power resides—on or near the “coasts.”

 

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The Coasts and the Chasm

©John L. Mariotti 2000

An alarming thought went through my mind recently.  What if the tidal pull of the earth’s oceans is influencing our businesses and society in ways we don’t even recognize?  As I looked through my pile of reading material, and then considered my investment portfolio, I realized that the vast majority of the information generated today in print and electronically either originates in or is controlled by people located within 100 miles or less of the ocean(s). 

Maybe there is some phenomenon bigger than the Internet at work.  Most major book publishers are located in New York, Boston, or San Francisco.  The same can be said for major magazines and national newspapers.  Ditto the headquarters for major TV networks—nearly all in or around New York or L. A.  Do "birds of a feather flock together", or is there some other, more mysterious force at work?

Then I realized that between San Diego, Silicon Valley and Seattle on one coast, and Boston to Washington, DC on the other, the coastal influence was even more striking.  Check the market capitalization of companies on the major stock exchanges and see where the headquarters of the biggest and most valuable are located.  Cisco, Microsoft, GE, Intel, IBM, Lucent, AOL, Time-Warner, and on and on—all are within 100 miles (or much less) of the oceans.

Of course it is a given that much of the nation’s policy originates in Washington, DC.  Most of the country’s financial wealth is brokered and traded on Wall Street, in NYC, where else?  Then consider that many of the legendary universities: Stanford, UCLA, Harvard, Wharton, MIT and many others are all located in these two narrow bands of geography. 

Is there anything wrong with this?  Maybe, maybe not!  There is not really a "chasm"--physical or intellectual--between these coastal bands of influence.  A lot of very important stuff goes on in the middle 2000+ miles of the U.S. A.  For starters, almost all of the food we eat is grown or raised there.  Nearly all of the "creature comforts" that aren’t made in the Orient are made in the good old central U. S. —the chasm.  It is often called the "Rust Belt" but it isn’t so rusty any more.

Try to do without furniture, carpets, beverages, automobiles, plastics, gasoline, steel, appliances, computers, pipes, wires, fiber optics, and the tools and machinery needed to actually produce all of this and much more.  The vast majority of these are made in the "chasm"-nowhere near the coasts.  People actually make physical things there, instead of just having ideas and reducing them to words on paper, policy in laws or digits in cyberspace. 

But much less is said or written about those who reside and work in the chasm, except in the media that is mostly regional, local or of a "controlled circulation".  This means they go primarily to the same people that they are created about and for.  Of course there are some national media in the chasm—WGN, Chicago’s TV super-station comes to mind, as does Turner Broadcasting in Atlanta with its CNN, TNT, TBS, etc.  MCI WorldCom is even a non-coastal company—for now anyway.  UPS in Atlanta and FedEx in Memphis deliver the goods and are "chasm dwellers". Dell & Compaq actually make lots of computers in the chasm.  But these are the exceptions, not the rule.  They (mostly) make things!

There are even real cities located in the chasm: Atlanta, Charlotte, Nashville, Dallas, Houston, Phoenix, Denver, St. Louis, Chicago, Detroit, Cincinnati, Columbus, Cleveland, Pittsburgh and lots more of them.  People from the coastal areas may know of them because their airplanes stop at these hubs when they can't go direct.  There are also some major sporting teams located in the chasm’s major cities.

Where am I going with this?  Here’s where.  Anytime the vast majority of the creation and communication of ideas is localized to a few cultural areas; it can easily become biased and ingrown.  That is decidedly NOT good.  If a (relatively) small cultural area influences most of the financial markets in the country (and maybe the world) that also is NOT good.

Diversity is what made this country great.  Diversity is what supports the richness of our social fabric.  Diversity of thought can be threatened by the concentration of knowledge, wealth, and most of all information influence in the "coastal" cultures.  If it isn’t about dotcoms or e-commerce, financial markets or stock prices, the Fed or the government, it isn’t news—at least not at quite the same level. 

If you disagree, fire up your computer, go to a newsstand, or stop at a bookstore and do a random check.  We are in danger of developing and promulgating a skewed, biased version of every kind of information, but especially that about our business world. Pick up 50-100 magazines that you recognize as the "biggies", and see where they are published—that means where the people live who decide what goes in them—and what doesn’t. 

Do the same thing with books.  Just choose 100 at random and look where the publisher's headquarters are located.  That is where the decision to publish that particular book, on that topic, by that author was made—and in a lot of cases that's where the author also resides.  Then check where the major TV networks and national newspapers originate.  Sure, they all have local affiliates and branch offices—and we all know how much influence they have compared to the "home office".

Thanks to the Internet, it is possible to break down this coastal cultural bias—but it won’t happen easily, if at all—because that is also where many of the powerful web sites originate, either at major publications and corporations or with portals like AOL/Netscape, Yahoo, MSN, etc. 

What must happen is for balance to be regained is for everyone in the "central chasm" to start taking a much more proactive role in ensuring the diversity, quantity and balance of information and perspectives needed to keep our country great.  That means, start generating good, insightful, interesting information and getting it widely disseminated.  Build the reputation capital of the chasm-based colleges and universities.  Take proactive positions and speak out.  Otherwise, we all better move to one of the coasts and either get a subway pass or grow a beard and lose our shoes.

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Thank you,

John

 

 

THE ENTERPRISE—MULTI-GENERATIONAL CHANGE—SHARE THIS WITH FAMILY & FRIENDS OF OTHER GENERATIONS: BOOMERS, GEN X, GEN Y, & GEN Z

I CAN’T KNOW WHICH GENERATION YOU BELONG TO. I ONLY KNOW THAT ALL “GENERATIONS" ARE SEEING UNPRECEDENTED, UNIMAGINABLE CHANGE
What differs is how they respond to the change. The quote below is important for all Generations to consider as we enter 2021:

“Those who cannot remember the past are condemned to repeat it! (George Santayana-1905). In a 1948 speech to the House of Commons, Winston Churchill changed the quote slightly when he said (paraphrased), “those who fail to learn from history’s errors are condemned to repeat them.”

Consider the various “Generations”—Baby Boomers born 1946-1964, Gen X born 1965-1979/80, Gen Y born 1981-1994/96, and Gen Z born 1997-2012/15+…and the placeholder for the youngest people. None of them have ever endured the magnitude of change in a single year, as we have in 2020.  And yet, as I looked through my old columns, I was constantly reminded about how much unimaginable change has happened in the past two decades. 

Who could have foreseen that we’d all be wearing masks, millions would have contracted this new virus and in America alone hundreds of thousands have died. Office buildings lie empty while Zoom (video) calls involve millions. Shopping centers no longer attract hordes of people, and vacant, failing stores are everywhere. Restaurants are failing equally rapidly. Big entertainment and sporting venues are largely empty. Few people have ever seen, predicted or endured anything like this. “Normal" social and commercial activities, (including travel) are unable to perform "normally.” 

 

(Many (most) people are hoping that the vaccine(s) now being introduced, will enable a return to something resembling “normalcy”—and maybe they will)

 

In future editions of THE ENTERPRISE I’ll share thoughts about Collaboration, a critical part of any successful organization or enterprise. The normal social events like weddings, funerals, celebrations and family gatherings have been totally disrupted. How much of this is temporary remains to be seen. One thing is certain: Change will continue to offer challenges—and opportunities—and how we adapt and evolve will be the largest challenge of coming years.

What will be critically important is how we respond and react to this “new (not-so) normal.” Past predictions don’t help. You can read now about how wrong they were in the past. 

 

See what I wrote about in 2002—almost twenty years ago. 

How we react as individuals, as organizations and as a society—that’s what matters.

===================

When Old Rules No Longer Apply

©2002 John Mariotti

 

The cry sounds out so often, “The Future…is uncertain”!  Few realize just how uncertain it is.  Predictions about the future are notoriously inaccurate.  Consider the statements by these four learned experts!

 

•     “The radio craze will die out in time.”  --Thomas Edison

 

•     “No woman in my time will be prime-minister.”  --Margaret Thatcher

 

•     “There is no reason for any individual to have a computer in their home”  --Ken Olson, CEO, Digital Equipment

 

•     “640K of memory ought to be enough for anybody”  --Bill Gates

 

Time has proven and nature has confirmed that change is certain!  If further confirmation is needed, just look at the change in the population that defines the ten largest cities in the US.  Comparing the ten largest going into the 2000 Census shows that only three of the ten from the year 1900—New York, Chicago, and Philadelphia—remain in the top ten.  The shift of population to the Sunbelt and West Coast of the US has completely restructured the population distribution of the country and along with it, is restructuring the social and political power as well.

 

The other fact we know to be true is that change is difficult—difficult to bring about and even more difficult to accept.  The risk to the change leader is enormous.  It has been so for centuries and was recognized by Niccolo Machiavelli in “The Prince”, published in 1513.

 

"It should be borne in mind that there is nothing more difficult to arrange, more doubtful of success, and more dangerous to carry through than initiating change.  … The innovator makes enemies of all those who prospered under the old order, and only lukewarm support is forthcoming from those who would prosper under the new.”

 

If we are to open our minds to change, we must learn from errors and successes of the past.  We must struggle to clearly understand the present too.  But most of all, we must commit to finding and creating a new future.  Sadly, we are so preoccupied with perfecting the present or protecting the past that we fail to work on finding the future!  But this has been the case throughout history!  What do these have in common?

•     The Dinosaurs
•     The Roman Empire
•     The American Bison
•     The Open Range Cowboy
•     The Sony Betamax

 The answer, of course is that all of these powerful forces fell to changes because they couldn’t or didn’t adapt:

•     Dinosaurs--a environmental event--a meteor hit
•     The Roman Empire--fell to personal strife & greed
•     American Bison--herd instinct = hunting with rifles
•     The Open Range Cowboy--technology/barbed wire
•     Sony Betamax--technology/more user-friendly systems

 

But the more telling question is which powerful forces fell to natural enemies?  The startling answer is “None of them”!  They all failed to adapt, to cope with or to capitalize on CHANGE!  Technology changed.  The environment changed.  They struggled internally or herded together and then fell to change!  Yet change presents a great opportunity.

 

Since denial is a natural human reaction to change, one of our favorite forms of denial is that “this time is different”.  But, is this time unique?  Perhaps every generation thinks this is the case.  Consider this:

 

“Over the course of a few years, a new communications technology annihilated distance and shrank the world faster and further than ever before.  A world-wide communications network whose cables spanned continents and oceans and gave rise to new forms of crime.” 

This quotation sounds like today’s claims about the Internet, doesn’t it?  Except this was said in 1840 about the telegraph! 

 

And so, is change a terrifying threat, or is it a wonderful opportunity?  How you answer that question is will determine how you behave!  To put it another way, are you spending your time and resources protecting the past, perfecting the present, or are you focused on finding the future?  You know which one you must do!  Do it!

 

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2021 HEADLINE IN COLUMBUS (OH) DISPATCH: LAST VIDEO RENTAL STORES TO CLOSE. 

 

I PURPOSELY USE THE TERM "DISRUPTIVE CHANGE.” 

 

CAN YOU THINK OF A MORE DISRUPTIVE CHANGE THAN THE CORONAVIRUS. 

Look at what COVID-19 has done in the USA alone, with over 300,000 dead and the toll climbing daily. 

(And many more globally.) 

 

When the late Clayton Christenson wrote his brilliant book “The Innovator’s Dilemma”  and coined the term "disruptive change” he certainly never considered a change as disruptive and deadly as the Covid virus. However, even in the face of such a deadly and daunting foe, the principles to consider and the actions to take are largely the same. 

 

1) Understand and define the problem, and 

2) Solve the problem. 

 

To do those successfully, you must understand and solve today’s and tomorrow’s problem—not yesterday’s. In business and in life,  denial can be deadly—just with a different set of consequences. 

 

The key to Finding the Future is to build new plans, based on new circumstances, keeping in mind what worked in the past—but not relying on that to work now, or in the future.  These are different times, calling for different plans and new solution, based on new realities.

===================

This is not so new if you consider that I wrote this twenty years ago:

 

Perfecting the Present vs. Finding the Future  ©John L. Mariotti 2000

Harvard professor Clayton Christenson created a stir in industry circles with his work on disruptive technologies and how these seemingly mundane approaches are undermining the positions of industry leaders.  

A few years ago, I met with and studied a prospective consulting client who was in deep denial.  His company was on the threshold of decline—and yet, perversely, it was doing great—at the moment.  He wanted to talk to me because I think he sensed that trouble was just around the corner, but did not want to admit it.

As it turned out, he did not want to face it either, (so I did not get the consulting assignment to help him).  Why should he seek help?  His company was an industry leader with over 50% market share.  It was multi-national, with almost half of its volume coming from outside the U.S.  And it was handsomely profitable, although not as much so as it had been just a few years earlier—and profits were trending downward.

This company made metal products, mostly using the same materials and equipment they had for years.  Their processes were poorly documented, but deeply ingrained in the minds and habits of a group of loyal employees.  Their cost and information systems were flawed—and they knew it—but margins were so good, it did not matter enough for them to change.  Although the CFO complained loudly about the need to change, the CEO would have none of it. 

The company had started a token venture into alternative materials applications for its products, but this was clearly a stepchild, staffed poorly and narrowly focused on the simplest current applications.  The top sales executive simply refused to answer my questions with any weaknesses or competitive threats—not because he was withholding information.  He did not think there were any!  Scary?  You bet it was!  This story is still unfolding, but at last check sales have stopped growing and profits continue to fall in spite of making internal operating improvements. 

The principle here is that industry leaders nearly always fall victim to outsiders because they are so deeply invested in the know-how or technology that got them to the top, they cannot admit that it won’t last forever.

Upstart competitors upset the market and knock off the entrenched industry incumbents.  In addition to Christenson, Gary Hamel (Leading the Revolution. Harvard Business School Press, 2000) has made a crusade of pointing this out to large companies but with only modest results.  It is so hard to leave that safe, comfortable place, even when the risk of staying there is greater than the risk of leaving!

Somehow, it is always easier to work on “Protecting the Past” or “Perfecting the Present” instead of “Finding the Future”.  Don’t fall into that trap.  Disruptive technologies are coming.  Is it your industry’s time yet?  Now that you know it, what are you going to do about it?  Don’t bother to ask loyal, entrenched incumbents—they, too are the likely victims.  Find a bunch of rebels, or a small upstart company, and hire them or buy it.  Cisco learned this lesson and “Finds its Future” exactly this way.  Will you?=================

PS: Here’s a useful formula I discovered many years later:

PP*2≠FF: Protecting the Past, while Perfecting the Present does not equal Finding the Future.

================

HOW WE ADAPT AND EVOLVE WHEN FACED WITH DISRUPTIVE CHANGE, LARGELY DETERMINES OUR FATE—AND MUCH OF THIS IS WITHIN OUR CONTROL.

 

Will you spend your mental energy and resources (time, talent and treasure) on Protecting the Past, and/or Perfecting the Present, or are you Focused on Finding the Future?   That recurring theme will appear in future editions of THE ENTERPRISE.

 

STAY SAFE AND WELL…AND BE POSITIVE…

JOHN

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Thank you, John