Looking At Your Operation with Fresh Eyes

Posted December 23, 2011

Yahoo is in trouble.  This one-time colossus of the internet world, that was for many years the darling of investors, has lost its way.  After firing CEO Carol Bartz in September, the Board of Directors Business launched a strategic review of the company.  Business pundits say it has time for one more CEO change, and if it hasn’t turned around by then it’ll be sold off for scraps.  Ask ten columnists how the company can be saved, and you’ll get ten different answers.  From my perspective, if Yahoo tries to cling too much to what it was, it’s dead.

Whether you own a small, itty bitty business, or a one-time behemoth like Yahoo, it’s very easy to fall prey to your own success, and fight to preserve the methodology that got you there.  That mentality works great, if the rest of the world will oblige you and stand still indefinitely.  Unfortunately, time marches on and the business world continues to evolve, your customers evolve, and your competitors evolve.  As the landscape changes, unless you continually re-evaluate your formula for success, you’ll be supplying solutions to yesterday’s problems.

Businesses that succeed over the long term are led by executives who are willing to challenge the sacred cows of their own companies, and often that involves risk.  But it’s equally risky to stand pat in a changing world.  Take two compelling examples.

At one point, IBM was the leading computer software and hardware company in the country.  It’s nickname, “Big Blue” spoke to its dominance.   Then in the 1980’s and early 90’s, faced with stiff price competition from domestic and foreign manufacturers, it fell into a downward spiral.  In 1993 Lou Gerstner was hired by the board to turn the company around.  After analyzing the situation, he said IBM was getting out of the computer game, and focusing on service and consulting contracts for corporations. He pulled the plug on their development of the OS/2 operating system and sold off the PC division to Lenovo.

The ensuing turn around of the company is now the stuff of business school case studies and many books.  Gerstner says that only an outsider like him could have come in and taken a fresh look at the company, and make the hard decisions necessary for it to thrive in the future by gutting its past.

In 1997, Apple Computer was 90 days from bankruptcy, when it hired back founder Steve Jobs, who had been ousted years earlier by his own board.  At the time Apple had over 30 products and was stuck in a seemingly endless effort to cut costs.  Jobs eliminated all but 4 products, and re-oriented the company to focus on  the next new products that would change the landscape.  This new mindset would lead to the development of the iPod, and would place Apple squarely in the new world of digital music content delivery.

What both examples have in common is the leaders’ ability to make their companies be their own worst competitors.  They were able to bring a fresh perspective and ask themselves, “if we were to invent THIS company today, would we be in the businesses that we’re currently in, doing things the way we’re currently doing them?”  If not, then change can’t start soon enough. Entrenched management usually can’t engage in that conversation, because they think it’s an admission that they’ve failed at their current jobs.

Think about how your business or department runs.  If you could re-create it from scratch with a clean slate tomorrow, would it look and function like it does now?  If the answer is no, if you think it could produce better results if configured differently, then why are you still clinging to the old way?  At some point, if you don’t make the changes, someone else will do it for you, and the results may not be to your liking.

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  1. Howard
    anne
    December 24, 2011 at 9:55 am Permalink

    Nothing stays the same and if you don’t make changes and stay in the same place, keeping the status quo, you are going backward.
    Great article and all of them are always applicable to life in general.