I ran a 5K race recently and so I have been thinking about my pre-race routine. I may not have a lucky rabbit’s foot but the morning of a race I have a ritual of sorts. I eat my usual breakfast and of course drink coffee. There are some things I just can’t do without! I wear the same clothes and sneakers for the race as I wore training. I will not do anything new or different.
This ritual keeps me from being distracted so that I can concentrate on the race. In this case, my ritual helps me. But in the office, rituals can be limiting. Always doing something the same way can get old and stale. A colleague asked me about identifying best customers. My first thought was an RFM or RAD segmentation because I was in the midst of a RAD segmentation. It would have been easy to stop there. However, I couldn’t stop until I also suggested clusters and CHAID. If she had let me, I would have added modeling and NPV. The trick is knowing when to stick with rituals and when to avoid them.
The print edition of the Wall Street Journal has introduced a daily sports page and when I say sports page, I mean it is just a page. It seems like an odd choice, introducing more sports coverage to a business oriented newspaper. However, it may be an attempt to increase advertising revenue and grow the subscriber base, similar to the earlier introduction of the Weekend Journal.
The sports coverage is supposed to be analytical, high-level and statistical. That does not mean it is dry. I laughed out loud when I read this excerpt from yesterdays’ journal, written by Bernie Lincicome.
“The visual highlight of the week was Henrik Stenson, a particularly tidy sort who avoided splashing mud on himself by taking off nearly all of his clothes. It takes a lot to upstage Tiger Woods, but a Swede golfing in his skivvies in a water hazard will do it every time.”
As more entertainment and news have moved online, it seems like more and more things can be had for free. I can watch a clip from a cable television show on Hulu even though I don’t subscribe to cable. I can read a New York Times article even though I dropped my print subscription. As Tangyslice write in a post last month, there are lots of things you can get for free — software and international phone calls included.
So you can imagine my surprise when I read that Disney is starting a web portal that will require a $75 annual fee. Subscribers will get access to Disney news, entertainment and merchandise. In addition, they will receive a quarterly magazine. While I understand that Disney wants to generate revenue, I wonder if consumers are willing to pay for the features offered. The online Wall Street Journal has been effective at generating revenue with a subscription model but they offer financial reporting and insight. Is Disney news and entertainment as desirable? In addition, will consumers be able to find most of the information provided other places (e.g., youtube, other fan sites, etc)? If so, the value of the portal will be diminished.
In this tough economy, what can a CEO do? The more I think about it, the more I am convinced that a CEO’s options are limited. The CEO can try to increase revenue through participating in and supporting sales efforts; however, he cannot be everywhere and he does not control customer spending. In addition, there is the problem of information asymmetry. He must rely on sales and operations to provide feedback on revenue generation. The CEO has more control over costs and companies large and small have announced layoffs, wage freezes and reduced benefits.
However, the CEO also has the power to bring the company together to survive and possibly achieve competitive advantages in this tough environment. I have been thinking about an HBR article I read in my business school strategy class, “Leading Change: Why Transformation Efforts Fail” by John P. Kotter. It describes eight steps for transforming an organization and it is extremely relevant in today’s turbulent environment. It all starts with the CEO. She can form a guiding coalition that assesses the company’s problems and opportunities. In addition, her vision for how the organization can effectively react to the challenging economy will ground all of the company’s efforts. The guiding coalition may develop a list of plans, projects and initiatives but the CEO’s vision will determine the priority of the projects and keep everyone on the same track. Further, her vision will reassure employees as they will know where the company is heading. The CEO will need to reiterate her vision across multiple channels in order to empower others to act upon it. Change is hard and will almost certainly involve sacrifices. However, employees will pull together to help the company survive if they understand the CEO’s vision and are inspired by it.
This is a crisis too good to waste. CEOs can do more than just survive until the economy recovers by using this opportunity to transform their organizations.