Tradition and Past Business Assumptions May Be the Root Causes of the Disease
For a troubled company, it is prudent to challenge all 'sacred cows', those old and sacrosanct business assumptions. It is probable that some of these old sacred cows which were based on prior erroneous perceptions and assumptions that got the company into trouble.
In times of rapid change, a strategic failure is often caused by an incorrect or false assumption. We console ourselves by telling ourselves that we have gone through the present problem before and hence are able to tide through it again. Often, we also falsely assume that this change is temporary, or that the impact would be limited and hence can be ignored. Success has got into the management's heads and become their greatest root cause of the disease. The prevailing mindset is that "we have been successful and everything worked in the past and failures will not happen here." Then the company's profit erodes and their stock plummets.
In a similar vein, we may dismiss the pain in our body such as a headache or stomach ache and just treat it with simple over-the-counter medication without noting its severity. Sometimes, this could well turn out to be more serious or life-threatening such as stomach cancer or prelude to a heart attack and stroke. The high death toll during the SARS outbreak of 2003 was also partly attributed to the initial dismissal of the symptoms and nonchalant attitudes adopted by some of the infected victims causing it to spread rapidly.
Many of these old and obsolete assumptions happen in large and well-known companies whose traditional cash cow businesses have become sacred cows and end up as sacrificial cows or mad cows when market forces turn against and overwhelm them. Time and again, some wrong business assumptions and perceptions by experts have led many companies astray. For example, Ken Olson, president of Digital Equipment said in 1977: "There is no reason anyone would want a computer in his or her home." Chairman of IBM, John Akers added in 1983: "The world market for computers is about 275,000." Because of these erroneous assumptions and perceptions, it is no wonder both Digital Equipment and IBM were late in entering the personal computer market.
Gary Hamel said: "One of the things that I believe is that whatever you need to know to create the future you can know. By definition, whatever Microsoft needed to know, it knew. Whatever CNN needed to know, it knew. Take an example. Why was it CNN rather than BBC that created the global news network? I do not think it was a prediction issue for CNN. It was not somehow they had some wonderful planners who saw what the BBC could not see. All the things that you needed to create CNN were totally visible.
You had cable television eroding the monopoly of the traditional broadcasters. You had satellite technology that made it possible to put a team anywhere in the world and get signal out. Anybody who was willing to challenge their own assumptions could see those things."
Michael Dell believes that the status quo is never good enough, even if it means painful changes with loss of his reputation. Success is greeted with five seconds of praise followed by five hours of post-mortem on what could have been done better. To Dell, celebration breeds complacency. He once rejected an idea to display Dell artefacts in the company's lobby because "museums are looking at the past." Says Michael Dell: "Celebrate for a nanosecond. Then move on."
Hence, companies sow the seeds of failures and arrogance during good and successful times. Managers get addicted to the old formula of success and refuse to change when the competitive situation changes. To ensure its effective and successful implementation, the troubled company must critically re-examine and re-visit every business assumption.
Related Tags: management, turnaround, change management, troubled company, business assumption, sacred cow
Dr Mike Teng (DBA, MBA, BEng) is the author of best-selling book, "Corporate Turnaround: Nursing a Sick Company back to Health." He is known as the "Turnaround CEO in Asia" by the media.http://www.corporateturnaroundexpert.comhttp://www.corporateturnaroundcentre.com
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- 5 Reasons That a Restaurant Should Use a Restaurant Recruiter
Have you ever noticed how many restaurants pop-up over time but then disappear just as quickly? Runn - Does Money Motivate?
Some say money can't buy happiness, but data shows that for those who can barely pay the monthly bil - Because Workforce Friendly Policies Payoff
Employer-sponsored wellness programs are becoming more popular as companies strive to maintain a hea - EAP Value
Life would be simpler if we could set aside our personal issues and emotional baggage when the workd - Hiring an Expert SEO Company to Improve Your Online Business
Search Engine Optimization or SEO Services are used to make your website or online business popular - Why Safety Training at Workplace is Important
Safety training at workplace should be one of the top priorities of your business. An effective safe - Team Building: Brain and Sweat to Attain Company's Central Goal
Are you one of those employees branded ineffective and unproductive? Reasons might be the sense of d - Security Alarm System
It is a must that houses and offices install a security alarm when we speak about safety reasons. Se - Workplace Safety Tips
When we speak of safety based on books, its importance is next to food. It is essential to all indiv - The Benefits Of Lease-to-own Properties
One of the hit real estate investments today is to buy properties that will later be put up as "leas
Most viewed articles in this category:
- A Map Mural for Your Business
Yay! That retail store you've been planning has finally opened its doors and you are officially in b - Attracting Customers Through An Improved Shopping Experience
So many new shopping malls and supermarkets are put up every year. Many more are already in business - "To Oz!": Leading a Resilient-High Achievement Organization
One of my favorite movies is "The Wizard of Oz" based on the book by Frank Baum. The story is about - 5 Critical Items Never to be Included in Cost Benefit Analysis
When dealing with decisions using Cost Benefit Analysis techniques it is very important to follow th - Collaboration and Change
I’m an expert on change and leadership, but my most popular speaking topic this past year, and - Workplace Gap
In your workplace, are you a manager with a smart group of people and they aren't responsive to your - Leadership - The Proper Relationship with Subordinates
In the army, "the men" are kept separated from those known as "the officers." This comes from the id - The 10 Most Asked Questions of Cost Benefit Analysis
When dealing with decisions using Cost Benefit techniques it is very important to follow the proven - Cubicle Space Planning
Space planning is an essential element of any project and efficient planning serves the dual purpose - Why Passenger Surveys are a Transport Operators Best Friend
Public transport operators who already use passenger surveys may not fully appreciate the multiple b