Performance and Competitiveness

Hurricane Sandy's tragedy continues to unfold in ways I can't describe. While the media will rightfully focus on the horrible loss of life, property and commerce, I want to contrast the remarkable work being done by combined public and private forces post-Sandy to those failing.

As Sandy was barreling up the east coast, die hard NY Jets fan and season ticket holder that I am, I went to the Jets-Dolphins game on Sunday. On my way in I was stopped by a gate security supervisor who aggressively told me I could not bring the small bag I was carrying in to the stadium. Despite my showing her the bag contained towels and rain gear, and despite the fact I've been toting the same small bag to MetLife Stadium since it opened, she wouldn't relent. Of course the Jets went on to lose 30-9 as they once again limp their way through a mediocre season. The organization's judgment and execution--on the field, its personnel moves, or the over-officious security supervisor--is consistent, typically resulting in being on the short end of a 30-9 score.

After the worst of Sandy cleared my Connecticut neighborhood, I went out for a walk and saw literally dozens of well-coordinated crews working on different streets to clear roads blocked with enormous trees, fix power lines and ultimately restore electricity. Undoubtedly each crew was led by a supervisor, but I couldn't tell because everyone on each work team was furiously working intent on getting the job done. Clearly, they were well trained and inspired to produce results despite many challenges. Both the town and state officials have provided regular updates throughout this ordeal.  Everyone impacted by Sandy will suffer, but for most of us it's a pain of inconvenience. Thank goodness the companies and agencies managing Sandy clean-up operate at the opposite end of the spectrum from the NY Jets!

Shorthand and oversimplification remain two of the biggest problems US businesses face. 

When we think of athletes we automatically assume "competitive" yet the Jets have lost 2 of their 4 home games this year by scores of 34-0 and 30-9...nothing competitive about that.  By contrast, government agencies are routinely ridiculed for not performing and if there is any business sector that gets the same scorn it's the utilities.  My professional and life's experience continues to lead me to one absolute truth: 

Great organizations can be built and are to be found in any field, but it certainly requires great management PLUS leadership.  

Vote! But Not For Jobs

Every eligible voter should exercise that right come November, but nobody should vote for a political candidate based on a promised jobs program. Delegating up has become the scourge of US businesses in recent years and this year’s election confirms we have now reached the point where this plague has now moved from the CEO’s office to POTUS.

No elected official can cure the epidemic at the root of little to no job growth yet politicians willingly accept the mantle of these profound problems delegated to them by a workforce that eschews accountability they demand in others.  I further submit “The Asian Jobs Flu” of low cost offshore labor isn’t nearly as influential as it’s made out to be.  No, the problem is mostly attributable to what have become normal behaviors in the workplace, a problem I can illustrate from this one of many examples I can cite from my experience in business turnarounds and transformations.

I last saw him 9 months ago when he controlled a multi-million dollar budget for a large company, we were on opposite sides of a negotiating table. At that time he was totally dismissive of my showing him over a decade of data proving that the entire industry I was working in was both without prosperity or profitability and he had little interest in statistics that verified the rate of raw materials inflation was putting the industry in greater peril if it couldn’t generate higher price levels.  Back then it was a scheduled meeting in his well apportioned office where he repeated these lines “that’s not my problem, if you want our business you figure it out”, “I already have several of your competitors willing to go 35% lower than what I currently pay”, and “I will get the best price and then demand the service.” My well-researched and supported analysis was of such little interest to him he refused to even take a copy and he “didn’t have time for a long meeting”…he just needed our best price.

This time we bumped into each other on a Manhattan street corner where I must admit I didn’t recognize him at first and had a bit of trouble recalling his name. And this time he really wanted to spend time with me, as he opened the conversation with “can you believe those bastards fired me after all those years as a senior manager?  After all I’ve contributed over the years?  What jerks, they don’t know anything about my profession, they replaced me with a couple of 20 or 30 something year old kids!”  Because his primary reason for treating me like a close associate was to help him land a new job, I couldn’t resist trying to explain to him that the very attitude he took with me in early 2012 was behind the reason for him losing his job.  True to form, he didn’t see the irony here and became somewhat agitated when I tried to equate our two encounters.

“Not my problem” has become so pervasive it has created chronic knee jerk syndrome. 

Prior to that early 2012 meeting senior people from the company I was working with advised me to not waste my time putting together analysis with a chorus of “nobody wants to hear that stuff.” Of course, after that meeting it was a round of “I told you so” and “so are we going to cut our price?” But what my coworkers were on to speaks louder volumes than just commercial print: everything from national elections to how everyday business decisions are made has been debased by making problem-solving a zero-sum game and by steering clear of topics that will make people think or otherwise feel uncomfortable.

It’s always been easy for management to blame a lazy workforce or for workers to point the finger of blame at out-of-touch management for inadequate business results. Blaming the Indians or Chinese even easier.  But politicians are always the easiest targets, especially because they seem to relish the opportunity to become so. Job stability and growth is a function of competitiveness; companies, indeed entire industries, simply can’t sustain competitive edges. 

If you’re looking for the candidate to vote for find the one who insists on better education, demands accountability in business where it belongs, insists on higher standards rather than relaxing them in everything from finance to energy. Better yet, if you’re looking for a job or have one you want to grow in vote for yourself by doing these very things at your place of work.

Happy Anniversary! Now get real or get lost...

A media professional, who I have a great deal of respect for, recently urged me to read as much of Forbes.com as I could. Thanks to this wonderful advice, I came across "5 Reasons Why J.C.Penney's Ron Johnson Will Reinvent Retail....Again" --an opinion piece the author will undoubtedly follow-up with "Why I Want Alex Rodriguez Batting Clean Up For My Team in The Post-Season!"

Ron Johnson has now been running J.C. Penney for almost one year. His track record is defined by (1)  quarterly losses, (2) 25% decline in the share price, and (3) wild shifts in strategic plans. Can we attribute this track record solely to Mr Johnson, or might we recognize that large companies in complex businesses during an era of rapid change are neither saved nor screwed by one heroic figure? Yet it seems as if everyone involved, from the business press to boards of directors, insists on an oversimplified hyperbole with just about everything.

Clearly, Mr Johnson has an incredible track record of success most recently and notably at Apple where he last reinvented retail. Or was the success due to Apple reinventing product design?  Or Steve Jobs reinventing the world?  I've lost track of all the reinventing Apple is responsible for, yet  in my view their greatest achievement is that Apple continues to excel a year after Mr Jobs' death and Mr Johnson's leaving for J.C. Penney. Perhaps the real story at Apple wasn't reinvention, but something far more basic: sustained achievement by a company dedicated to sound fundamentals in everything from organizational structure to product performance.

Regardless of the field, successful people and organizations (business or athletics) have one thing in common:  they are fundamentally sound and the best of them fundamentally superior. Strong fundamentals create the basis for continuously managing to higher standards and performance. A track record of success is more like incremental advancement than reinvention. Unfortunately, our short-term society has little interest in something as boring as fundamentals!

Ron Johnson has already enjoyed the greatest success he will ever know at J.C. Penney all by himself. If he's able to build an organization that can actually perform on the most basic levels then he might be able to truly turn J.C. Penney around. Having worked with  J.C. Penney as both a supplier and customer, in my opinion, instilling these fundamentals won't be easy. I can't think of any company (in any industry) with a culture as consistently lousy the one as I've seen out of J.C. Penney. And if Mr Johnson approaches his job the way the press claims he does then his J.C. Penney tenure will be painfully short, unhappy and expensive for all stakeholders. 

Let's skip the genius talk and reinvention nonsense and get real about it: J.C. Penney's problems are so entrenched that one person can't solve them and if you really believe something can be reborn or reinvented without proper fundamentals, then as a Yankees fan, I'd also like to sell you a superstar 38 year old 3rd basemen who can't catch up to a fastball!