Leaders Must Look For Signs Of Companies Growing Cheetah Spots
There are many companies headed to the fate of the Cheetah because they are unable to recognize their own genetic bottlenecks. Outsiders often see the evidence of shrinking gene pools (inability to encourage diversity of thought or to embrace new ideas and ways of doing business) long before Cheetah companies see it themselves. As Noel Tichy writes in The Cycle of Leadership, “The digital, global economy punishes slow, inward-looking dumb-acting organizations.”
Leaders must be prepared to see the signs of cheetah spots like the ones below.
1. Arrogance – The firm believes it own PR (public relations). They perhaps started out as a market leader, and have convinced themselves over time, that their competitive position is impenetrable; they rest on their laurels and believe that if customers defect to “inferior” competitors, it’s more likely they’ve made a decision to fire their customer than that the customer was dissatisfied.
Through their early successes, they often attract very bright people. But because they almost never believe there’s a need for change, they are more likely to appreciate mavericks who work independently and display the kind of hubris that’s characteristic of the company founders. They don’t believe in the wisdom of their own corporate crowd, and usually keep problem-solving and decision-making to a small cadre of senior people at the top of the organization.
2. Feeling No Pain – Some businesses seem to hum along for quite awhile and maintain moderate success and lull themselves into a place of comfort. In time, they seem numb to the concept of striving. Grass roots efforts by employees, who know where to find inefficiencies in their own functions, push for improvements that fall on deaf ears at higher levels. I saw this happen when employees at a major oil company and large tobacco enterprise tried to streamline their functions.
There were real and significant opportunities for improvement. But senior leaders at both firms perceived that the area targeted for improvement was the equivalent of the company’s big toe – not its heart. Teams failed to get the needed support at the top, and their efforts failed. When honest attempts for improvement go unheeded, slowly and surely an attitude of “why bother,” creeps through the firm like gangrene. Then when real trouble appears, it’s hard to breathe enthusiasm into the people whose initiatives were once ignored.
3. Scarcity of Ambition – Companies in lagging industries seem to have given up the fight. The printing industry, as one example, must see cheetah spots before its very eyes. Digitization ripped a gaping hole in printers’ businesses as a substantial percentage of all forms, documents and publications moved to an online format. An executive maverick inside one major, international printing company said he thought he had landed in the dark ages in his early days on the job while observing leaders in action at some of the plants. He saw blatant examples of racist behavior, sexual harassment and even capital punishment among lower levels of leadership. He shared his horror stories with me to describe the magnitude of the challenge he faced, with the caveat that I never reveal the company’s name. The printing business is an extreme case but what’s to become of many magazines, travel agencies, the music industry, book publishers and others that must adapt or be obsolete. These companies need a “do-over”, a giant business mulligan to reinvent themselves for survival in a new economy. We’ll talk in a future blog about why leaders find it so difficult to let go of a dying business.
4. End of Easy Revenues – Utilities, some health insurance companies, and government-type agencies that have existed through the grace of guaranteed revenue streams are being caught unaware of how the business climate has changed, and for some, it may already be too late to navigate the sea change to recovery. One large health insurance firm that had been the carrier of choice in its state for decades, was completely blindsided when a new carrier took away its largest contract. The competitor had automated claims processing through new technologies to significantly reduce operating costs and lower premiums.
Some employees recognize they were behind the eight ball when they were using speedy laptops in the privacy of their own homes, and dumb, green-screen computer terminals on the job. When new people came in from the outside with good ideas like project management and Six Sigma, the body of the firm rejected them. They believed they could remain competitive, even in the face of rising costs, by offering good customer service and trading on the long history of their past reputation.
Through deregulation, many of these sleeping giants have been roused from a hibernation state and forced to think about change. But progressive ideas from the outside world and from younger employees are often bitter pills. They tend to exert more effort trying to preserve business as usual than would be required to swallow something new.
Cheetah companies’ days are numbered. It’s obvious to most of us that speed won’t help them. They need to tear down walls and bureaucracies that stop the flow of ideas and the dialogue that refines linkages between strategy and execution. And must evaluate their own genetic drift – the valuable ideas that are hidden or have been lost over time. Subject of our next blog.
