Confront the Brutal Facts

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CONFRONT THE BRUTAL FACTS (YET NEVER LOSE FAITH)

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Transcript of Confront the Brutal Facts

INFORMATION SYSTEMS ARCHITECTURE (Chapter 3)

CONFRONT THE BRUTAL FACTS(YET NEVER LOSE FAITH)Confront the brutal facts

Introduction We Should Focus On Brutal Facts As Reality Rather Than Cheering Dreams.

If we ignore the brutal facts we cannot survive in the market.

2 companiesIn early 1950sA & P

it is the first leading company in all over the USA

KROGER

The second largest company in USA

During 1959 to 1973A & P

It was half of its sizeKROGER

It got the position 10 times more in market & 80 times A&P

KROGER, A&P, AND THE MARKETCumulative Value of $1 Invested,1959-1973

KROGER, A&P, AND THE MARKETCumulative Value of $1 Invested,1973 - 1998Kroger

Change the modulesModule during world war

Module after world war

Super store

8Golden key concept Experiment with new methods & moduleTo learn customer needManager freedomEvolve the modern super store

Afterwards it shut downA&P didnt like the facts they faced and shut down the new successful store in order to preserve the traditional store, which soon failed

A & P StrategiesPattern of lurchingAlways looking for single stroke solution to its problem

Scorched earth policyA radical price cutting policy

A&P had a monarchy system They had preserve cash dividends and maintain past glory

Manager of A&P We not only have dirt we have dirty dirt HARTFORD approach

YOU CANNOT ARGUE WITH HUNDRED YEARS OF SUCCESS

As the brutal facts about the mismatch between its past module and changing world.KROGER strategiesSuper store concept In 1960s supper store concept are givenBy 1970s the Kroger changed old stores in S.SRebuilt entire system

Good decisionAll Good to Great companies made multiple good decisions, diligently executed that accumulated one on top of the other.The process to success was constantly refined.

Before a company can make a series of good decisions, it must face the brutal facts.

Once the brutal facts were faced, the right decisions often became self-evident.

A Second ExampleMr. Ash of Addressograph had a vision to emerge above IBM, Xerox, and Kodak in office automationAddressograph had previously only dominated the envelope-address-duplication businessAsh refused to face evidence that his plan was doomed to failAfter Ash was thrown out of office and the company had filed for bankruptcy, he still refused to confront reality, saying: We lost some battles, but we were winning the war,

There is nothing wrong with pursuing a vision for greatness, but Good to Great companies continually refined the path to greatness with brutal facts of reality.

PITNEY BOWES VERSUS ADDRESSOGRAPHAnnual Revenues, 1963-1 998

Winston ChurchillI Had No Need To Cheering Dreams

He wrote Facts Are Better Than Dreams

A Climate Where The Truth Is HeardHow do you motivate with brutal facts?Doesnt Motivation come from a compelling Vision?Motivating people is a waste of time and energy.Right people on Bus.self motivated.Important question is : How do you Manage in such a way as not to de-motivate people?

There is no worse mistake in public leadership than to hold out false hopes soon to be swept away - Winston S. Churchill The Hinge of fate.

Huge difference between the opportunity To have your say& The opportunity to be heardGood To Great leaders created a culture where people had tremendous opportunity to be heard and ultimately for truth to be heard

How do you Create a climate where truth is Heard?Lead with questions, Not answers..Alan Wurtzels Company was bankrupt and dangerously close to violation of its loan agreements.At the time company wasKnown as wards with noUnifying concept.

In ten years Wurtzel and his team not only turned the company around but created The Circuit City concept and laid foundations for stunning record of results BEATING THE MARKET 22 TIMES FROM ITS TRANSITION DATE in 1982-2000..

How did this happen?He began with a remarkable answer to the question of where to take the company?I Dont knowA board member said Alan had an ability to ask questions that were just marvelous.We had some wonderful debates in the boardroom.It was never just a dog and pony show where you would just listen and then go to lunchWurtzel would keep asking questions untill he had a clear picture of reality and its implications .Wurtzel saidThey used to call me the prosecutor because I would home in on a question .You know like a bulldog I wouldnt let go until I understood Why Why Why????

Good to great leaders never used questions as a form of manipulation or as a way to blame others.Spent time Just trying to understand.Informal meetings with no agenda,script or items to discuss.Started meetings with questions like So whats on your mind? Can u help me understand?

2) Engage in dialogue and debate,not coercion.Nucor was utterly Awful and there was time it didnt produce one ounce of steel but 30 years later it stood as 4th largest steelmaker in the world. How? Ken iverson level 5 leadershipGot right people on the bus (Sam S. best money manager in the world and David an Operations genius)Built a remarkable team Ken Iverson : Role of Socratic moderator We established an ongoing series of general manager meetings and my role was more as a mediator.They were chaos.We would stay there for hours ironing out the issues untill we came to something.At times,the meetings would get so violent that people almost went across the table to eachother.People yelled. Faces would get red and veins bulged out

Nucor company strategy Evolved through many agonizing arguments and fights- Good to great companies had a heated scientific debate with people engaged in a search for best answers.

3)Conduct Autopsies Without blame The 7Up disasterJoe cullman in his book says that if he had listened better to people who challenged his idea at the time. The disaster might have been avoided.

Cullman said I will take responsibility for this bad decision.But we will all take responsibility for extracting the maximum learning from the tuition we have paid - With the right people on bus ,no need to assign blame.

4)Build Red flag mechanismsThe key lies not in better information but in turning information into info that cant be ignored.-If you are not a level 5 leader you may need red-flag mechanism as a useful tool for turning info into info that cant be ignored

Unwavering Faith Amid the Brutal FactsNever Ever lose faith while confronting the brutal facts of your situation.

Good to Great companies use the bad experiences as defining events that make them stronger.

The Stockdale Paradox

The name refers to Admiral Jim Stockdale, who was the highest ranking United States military officer in war camp during the height of the Vietnam War. Tortured over twenty times during his eight-year imprisonment from 1965 to 1973, Stockdale lived out the war without any prisoner's rights, no set release date, and no certainty as to whether he would even survive to see his family again.Key outcomes of the chapterThere is no worse mistake in public leadership than to hold out false hopes soon to be swept away. - WINSTON S. CHURCHILL, The Hinge of Fate

Key outcomesconfronting the brutal facts of reality head-on and changing the entire system in response is the way to go!

all good-to-great companies, develop ideas by paying attention to the data right in front of them, not by following trends and fads set by others.

You absolutely cannot make a series of good decisions without first confronting the brutal facts.

Key outcomesThe moment a leader allows himself to become the primary reality people worry about, rather than reality being the primary reality, you have a recipe for mediocrity, or worse. This is one of the key reasons why less charismatic leaders often produce better long-term results than their more charismatic counterparts.

Do Not De-motivate: one of the single most de-motivating actions you can take is to hold out false hopes, soon to be swept away by events.

Key outcomesGood to Great leaders give people the opportunity to actually be heard rather than just giving them their say.

Charisma can be as much a liability as an asset, as the strength of your leadership personality can deter people from bringing you the brutal facts.

Thank You!