The Mystery of Process

"A mystery is not something you can't know anything about, but is something that you can't know everything about."

The reasonable man adapts himself to the world. The unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.
George Bernard
Read more at http://www.woopidoo.com/business_quotes/business-growth.htm#2VcAJh1ipxm7b3TS.99

The reasonable man adapts himself to the world. The unreasonable man persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.
George Bernard
Read more at http://www.woopidoo.com/business_quotes/business-growth.htm#2VcAJh1ipxm7b3TS.99

--Maria Harris

Before boarding what was to be a long flight across the Atlantic several years ago, I stopped in an airport bookstore looking for something to read. After scanning the standard fare on "leadership" I decided to purchase a book with an unusual title, "The Alchemy of Growth."  (Baghai-Coley-White, Texere Publishing)

It turned out to be a good decision. 

What's alchemy? 

If you're unfamiliar with the term alchemy it's "a power or process that changes or mysteriously transforms something." (Merriam-Webster) 

As most businesses and nonprofits are constantly looking for ways to grow--more customers, more markets, more donors, etc.--understanding just how transformational the right process can be is an important insight for strategy development or tactical change.

Think how much time and money are spent annually on strategies, planning retreats, incentives, and brainpower, all attempting to make growth happen. What tends to be left out of the conversation is the relationship between process and results--and how much can't be known.

Growth comes from where?

Whenever you read about a company on a growth trajectory it helps to dig a little deeper and understand why and how that's happening. Two decades ago, when the "Alchemy" book was published, most growth in the for-profit sector came as a direct result of four things (mostly the first two on this list):

1. Mergers and acquisitions
2. Creative accounting
3. Increase in revenue from existing customer base
4. Increase in customer base

While not all lessons from business apply to nonprofits there's something to be learned from studying that list. It's a challenge in any kind of enterprise to see natural or organic growth year-after-year, which helps explain the need for mergers and acquisitions. The demand for growth never justifies creative accounting. 

The last two items, increasing revenue from current customers and a bigger customer base, are the results of hard work. Pay attention to companies who grow from Nos. 3 and 4.   

Good advice

Here's a lesson from the book that's potentially worth a lot of money: A single-pronged strategy is insufficient to achieve sustained growth.  

Avoid focusing on one aspect of strategy to the exclusion of other opportunities. Focus is good but not if it limits your vision for other possibilities.

What underpins sustained growth?

The authors say the long-term is realized by having a continuous pipeline of initiatives. Keeping other ideas alive helps the pipeline stay full with new growth engines ready when the existing ones begin to falter--and falter they will.

What's the problem in making that concept work?

Being pre-occupied with existing operations is one answer. Another is that leadership often lacks a way to talk coherently about current operations, new products coming on stream, and future options--all at the same time.

Stewarding the pipeline

The art of managing the pipeline comes through a disciplined and focused effort. Most fail at this point. Even having a list of promising ideas can be a false sense of security since there's nothing tangible until action is taken.

The authors state that the leadership task is to nurture promising options while excising those with diminishing potential.  

It's management's responsibility to steward the pipeline--for the short, medium, and long-term future.


Up next:  What should be in the pipeline?

Strategist.com

(C) Bredholt & Co.

  

Succession at McDonald's

If the most important decision a board of directors makes is selecting the chief executive officer (CEO), then why do so many businesses and nonprofits fail to have a succession plan in place?  Those who have a plan often struggle to implement it properly.

In 2008, at the 1,000 largest American companies (by revenue), 80 new CEOs were appointed, and only 44 of them — 55% — were from within.  

According to Steven Miles, vice chairman of the executive search firm Heidrick & Struggles, this may be a clear signal of failure on the part of many boards. "If you view a board's having to go outside to hire a CEO as a failure in succession planning, that represents a breakdown in the system. A failure rate of 45% means far too many plans aren't working," Miles was quoted as saying in a Forbes Magazine article.  

Coming back to "why" there aren't more plans in place, the answer may be three-fold:

• Succession is not a priority
• It makes the current CEO a "lame duck."
• Corporations may not be sure how to go about it

A good example

One company that stands out for consistently doing well with the process is McDonald's Corp, headquartered in Oak Brook, Illinois. While the past decade has been a stumble for the world's largest fast-food chain, it has been good for the chain, which operates 33,000 locations in 118 countries. 

Current CEO Don Thompson inherited from his predecessor, Jim Skinner, eight years of solid sales growth and a nearly 188% increase in McDonald's stock.  Longer-term McDonald's stock has returned 8,000% over the last 30 years. (My Daily Finance)

Prepared to act

Behind the scenes at McDonald's is a board of directors that seems to know what to do when trouble and even tragedy come along.  If you are a CEO or a board member, there is much to learn from McDonald's board practices regarding succession.

In 25 months, from December 2002 to November 2004, McDonald's had four CEOs:

• Jack Greenburg
• Jim Cantalupo
• Charlie Bell
• Jim Skinner

From April 2004 to November 2004, just eight months, the company had three CEOs:

• Jim Cantalupo
• Charlie Bell
• Jim Skinner

A tragic timeline

Here is an unimaginable timeline of CEO succession guided by seasoned board leadership and detailed preparation: 

April 19, 2004, 1:30 a.m.



Jim Cantalupo, Chairman and CEO, age 60, had a massive heart attack at the Peabody Hotel, Orlando, Florida, while attending McDonald’s company-wide convention, and died later that morning.

April 19, 2004, 5 a.m.

Andrew J. McKenna, lead director at the time, receives a call from McDonald's President Charlie Bell informing him of the death of CEO Cantalupo.

April 19, 2004, 6:45 a.m.

Eight board members assemble while two join by conference call.

April 19, 2004, 8 a.m.

Charlie Bell, 43, was elected CEO by the board.

April 19, 2004, 9:30 a.m.

The New York Stock Exchange opens with a news release issued that morning.

November 2004, just eight months later

Charlie Bell resigns, and Jim Skinner, 59, is elected Vice Chairman and CEO.

January 17, 2005

  

The former CEO, Charlie Bell, died of cancer at age 44 in Sydney, Australia, where he became the youngest store manager in his native country at age 19.

June 30, 2012



Jim Skinner steps down as Vice Chairman and CEO after eight years at the helm, where he led the company through a period of solid growth. 

July 1, 2012

Don Thompson becomes the new CEO.  

Learning from McDonald's

Although McDonald's situation in 2004 was extreme and rare, it underscores the importance of having a succession plan in place. That should include the current CEO, the board of directors, legal counsel, the chief financial officer (CFO), and human resources (HR), each knowing their role in preparing and executing the plan.

What are some lessons from the McDonald's experience that might be helpful to your organization?

1. Be prepared, most have no succession plan in place
2. CEO succession belongs to the entire board--not just a committee
3. A succession plan is only as good as the people on it
4. Know the current criteria for the job, don't rely on past criteria, and look for a good fit
5. Sometimes it's best to promote from within, and other times not. Know which time it is.
6. The McDonald's Corp. board of directors rehearsed the succession process during the year, just in case
7. Make succession a priority throughout management ranks--not just at the top

More change coming?

In a recent interview with The Wall Street Journal, CEO Thompson admitted that McDonald's had lost "relevance" with some customers and needed to improve its complicated menu and provide better value.

Last year, same-store sales dropped 0.1%, dragged down by a 3.8% decline in USA sales.  

All businesses get in trouble at some point. The question is how to deal with problems promptly, something the McDonald's management team says it plans to do in 2014.

Debora Wahl is coming on board as the new chief marketing officer, and $3 billion has been allocated for capital expenditures. That figure will cover up to 1,600 new restaurant openings and the refurbishing of 1,000 existing locations, according to published reports.    

McDonald's has a largely in-grown culture but a long-term view.  An interesting combination.  However, the board will expect progress in making the company more "relevant" to its global customers who buy some six billion hamburgers and other products each year.  

In an increasingly time-sensitive culture, McDonald's says it needs to find ways of simplifying its menu and restaurants to keep customers happy, profits flowing, and its stock rising in value.   

How difficult can it be to order an Egg McMuffin, or for that matter, a Big Mac and fries?

Evidently, it's too hard for some customers who've gone elsewhere for faster food. McDonald's needs them back at the Golden Arches to achieve another decade of growth and keep succession at bay.

Strategist.com

© Bredholt & Co.

Breaking the Glass Ceiling

Any guess as to the more popular articles on Fortune.com in 2013?   Was it investment advice?  CEO changes?  Health care implementation?  The roaring stock market?   

The top three was a piece entitled, "Warren Buffett is bullish on ... women." 

In an exclusive essay, the Berkshire Hathaway chairman and CEO attempted to make a case for why women are the key to America's (perhaps the world's) prosperity.  In speaking of the future, Buffett calls himself an "unqualified optimist" and notes that "women are the reason we will do so well."

The 83-year-old "Oracle of Omaha" offered the following ideas:

1. Americans today enjoy an abundance of goods and services that no one could have dreamed of just a few centuries ago.
2. That America has forged this success while utilizing in large part, only half of the country's talent.  For most of our history, women--whatever their abilities--have been relegated to the sidelines.
3. Resistance among the powerful is natural when changing clashes with their self-interest.  Business, politics, and religions provide examples of this behavior.
4. An even greater enemy of change may well be the ingrained attitudes of those who simply can't imagine a world different from the one they've lived in.
5. An obstacle remains--too many women continue to impose limitations on themselves, talking themselves out of achieving their potential. 

Buffett's concluding thought may be one of economic self-interest:  "The closer that America comes to fully employ the talents of all its citizens, the greater the output of goods and services will be."

In other words, 100% instead of 50% human capacity is the better proposition.

Progress is slow--but in motion

Is the president of the United States the most powerful position in the world?  It's powerful in many ways but there are political and legislative limitations to that job.

The position with nearly unlimited power and influence is chairing of the U.S. Federal Reserve Board of Governors.   The current chair, Ben Bernanke, will be retiring in 2014 and his position will be filled by Janet Yellen, the first woman to head the Federal Reserve.  Dr. Yellen, not President Barack Obama, will be in the seat of power. 

Angela Merkel won another term as chancellor of Germany, and Park Geun Hye took office as South Korea's president.  Kathleen Taylor was named the next chair of the Royal Bank of Canada, the nation's most profitable company. 

While women did not get more seats in the boardrooms and C-suites according to Catalyst.org, there were some impressive gains in other areas in the past year.

Broken glass at General Motors

On 10 December 2013 General Motors' Board of Directors voted unanimously to have Mary Barra serve as its next Chief Executive Officer.  The appointment is effective on 15 January 2014. 

A female CEO is not only a first for GM but for the U. S. auto industry as well.  

Ms. Barra, 51, now head of worldwide product development, is taking over a revitalized GM from the current chair and CEO, Dan Akerson, who is leaving the global automaker to care for his wife, Karin, seriously ill with cancer.

Incoming CEO Barra is a graduate of General Motors Institute (GMI), now Kettering University, Flint, Michigan, and holds an MBA from Stanford University.  

While working at GM in the late 1960s I served as a clerk alongside GMI co-op students who were preparing for careers at the auto giant.  It's worth noting that 45 years ago Mary Barra could not have clerked for superintendents in GM's plant offices because of her gender.

In 33 years at GM, Ms. Barra, who is reported to possess strong people skills, has worked in engineering, communications, and human resources.  Holes in sales and marketing experience will be filled quickly by other members of her team, according to insiders.

“When you put her in a position that’s completely new to her, she does an amazing job of getting grounded, understanding what’s important and what’s not, and executing very well,” said Gary Cowger, a former GM executive who mentored Barra.

With taxpayer help, she will be taking over a going concern.  GM has racked up almost $20 billion in profit since leaving bankruptcy in 2009.  Barra will have overall responsibility for 212,000 employees scattered across 23 time zones.    

Timely interventions

There are other Mary Barras in the workforce.  What keeps them from breaking "the glass ceiling," a term first used by Gay Bryant, editor of Family Circle Magazine?

Women’s career development is slowed by companies’ underestimation of their readiness to assume leadership roles, a Conference Board of Canada (CBC) study concludes. As a result, women lower their career expectations, harming both their own advancement and the companies where they work.

“This ‘unconscious bias’ means young women are consistently underestimated and overlooked, right from the outset of their careers,” said Ruth Wright, CBC director of Human Resource Management Research.

“Organizations need to implement objective and transparent talent management practices that guard against unconscious bias. Otherwise, the effects are both cumulative and costly—for young women who are denied access to critical developmental opportunities, and for organizations that fail to recognize and develop top talent,” Wright added.

A changing workforce

Two important values of society, education and work itself are in the process of being altered in significant ways.  First, the estimated percentage of all bachelor's degrees earned by women in 2013 is 57%.  Women are also expected to have received 60% of all master's degrees and 52% of all doctorate degrees. (TIME Magazine)

Additionally, there was a 6.2% increase in the labor-force participation rate for women from 1980 to 2012 with 67.5 million now in the workplace, a record number.  (U. S. Labor Department)  The labor-force participation rate for men declined by 7.2% over the same period. (U. S. Bureau of Labor Statistics) 

What could these statistical shifts mean for institutions of higher learning, household formation, and the economy in general?

It takes courage

What's the answer to more significant progress?

Entrepreneurship is a route some females are taking.  It's not an easy one but there can be big payoffs.  Examples include Cher Wang, founder of HTC; Clara Shih, Faceconnector; and the late Anita Roddick, who started The Body Shop.  Each was successful in growing and sustaining their companies. 

The vast majority of women, however, will find themselves working in existing businesses or nonprofits.  That necessitates a combination of encouragement, mentoring, sponsorship, and learning to make their own breaks along the way--just like everyone else.

An article published in Psychology Today on women in the workforce concluded that changing behavior begins with having the courage to do so:

"Leaders must see diversity as a business imperative, not just a matter of compliance or an add-on program, and be willing to take a bold approach. 

"It takes courage on the part of the CEO, senior people, and board members to create an inclusive culture of different leadership styles, different ways of communicating and different ways of interacting, that will empower the whole talent pool."

Perhaps Warren Buffett has it right.  Leaders need to visualize the benefits of having "100%" human capacity.  If they act on that vision, it might increase everyone's optimism about the future.         

Strategist.com

(C) Bredholt & Co.

  

A Leadership Parable

Back in the third century A.D., King Ts’ao sent his son, Prince T’ai, to the temple to study under the great master Pan Ku. Because Prince T’ai was to succeed his father as king, Pan Ku was to teach the boy the basics of being a good ruler. When the prince arrived at the temple, the master sent him alone to the Ming-Li Forest.

After one year, the prince was to return to the temple to describe the sound of the forest.

When Prince T’ai returned, Pan Ku asked the boy to describe all that he could hear. “Master,” replied the prince, “I could hear the cuckoos sing, the leaves rustle, the hummingbird's hum, the crickets chirp, the grass blow, the bees buzz, and the wind whisper and holler.”  

When the prince had finished, the master told him to go back to the forest to listen to what more he could hear. The prince was puzzled by the master’s request. Had he not discerned every sound already?

For days and nights on end, the young prince sat alone in the forest listening. But he heard no sounds other than those he had already heard. Then one morning, as the prince sat silently beneath the trees, he started to discern faint sounds unlike those he had ever heard before.

The more acutely he listened, the clearer the sounds became. The feeling of enlightenment enveloped the boy. “These must be the sounds the master wished me to discern,” he reflected.

When Prince T’ai returned to the temple, the master asked him what more he had heard. “Master,” responded the prince reverently, “when I listened most closely, I could hear the unheard—the sound of flowers opening, the sound of the sun warming the earth, and the sound of the grass drinking the morning dew.”

The master nodded approvingly.

“To hear the unheard,” remarked Pan Ku, “is a necessary discipline to be a good ruler. For only when a ruler has learned to listen closely to the people’s hearts, hearing their feelings uncommunicated, pains unexpressed, and complaints not spoken of, can he hope to inspire confidence in his people, understand when something is wrong, and meet the true needs of his citizens.

"The demise of states comes when leaders listen only to superficial words and do not penetrate deeply into the souls of the people to hear their true opinions, feelings, and desires.”

© W. Chan Kim is an associate professor of strategy and international management, and Renée A. Mauborgne is a research associate of management and international business at The European Institute of Business Administration (INSEAD), Fontainebleau, France.

 

Strategist.com

(C) Bredholt & Co.

 

 

 

 

 

The Power of Encouragement

"Correction does much, but encouragement does more." 

--Johann Wolfgang von Goethe

One of my favorite Peanuts cartoons is where the gang is sitting in a row, heads down, baseball gloves in hand. Their team lost the big game. Discouraged looks are on all faces. 

The pain of that loss is so intense no one dares say anything, and the silence remains until the fourth and final frame.  Finally, Lucy speaks up and says, "That's okay Charlie Brown. Anyone can make 22 errors in one inning."

Is that encouragement?

Just a word

Recently I stopped to talk with the maintenance crew that tends the common area near our home. "I've never seen the place look better," I said. "Keep up the good work."

One of the men, somewhat startled, replied, "Thanks. No one ever says anything like that to us."

My guess is a lot of workers, all over the organizational chart, including CEOs, go through daily routines receiving little, if any, encouragement. The kind of support that might boost morale or provide additional incentive to finish a difficult task.

In addition to 360s, annual reviews, and project post-mortems, everyone could benefit from a little more inspiration throughout the year. 

Encouragement defined

One online dictionary says that encouragement is "the action of giving someone support, confidence, or hope." Perhaps "action" is the operative word in that definition.

Encouragement is different than "happy talk." A cheerful remark might be helpful but tends to be short-lived. On the other hand, restoring someone's confidence, with carefully chosen words, can be a profound moment, and potentially life-changing.

No suggestion is being made to remove personal responsibility for doing what needs to be done. Work is work. Yet offering support at an appropriate moment might make it possible for a friend, co-worker, or family member to keep going when faced with challenging circumstances. 

Nor is this a call to pull back from instruction and necessary correction. Both are needed from time to time. Sub-par performance is a way to jeopardize one's job and needs to be identified and dealt with as soon as possible. 

However, inserting the right words at just the right time and place can make a big difference in an individual's personal or professional life. Truth be told some are gifted at this while the rest of us need more practice.

A turnaround at Ford

One way to look at the depths of Ford Motor Company's problems is to track the price of its stock. Maybe you were one of the prescient few who purchased Ford shares when they bottomed out at $1.01 on November 20, 2008. As of this post, Ford's stock is just over $17 per share. That's nearly a 1,600 percent return on investment.

According to the Wall Street Journal, Ford made $1,683 in operating profit per vehicle in the third quarter of 2013 up from $1,335 a year earlier, and raised its full-year operating profit forecast to more than $8 billion, ahead of 2012.  

What happened?

The single biggest factor in that report may be the decision by William Ford, Jr., now executive chairman and great-grandson of founder Henry Ford, to step down as CEO and bring in Alan Mulally from the Boeing Corporation to head up the company. Mulally helped lead the turnaround of the commercial airline division at Boeing and was looking for a new challenge. It was at that moment in 2006 when chairman Ford came calling.

 

It proved to be the right decision as Ford, along with General Motors and Chrysler, nearly went out of business during the Great Recession. From 2006-2007, Ford lost $30 billion alone.

GM and Chrysler filed prepackaged bankruptcies with the United States government (taxpayers) providing funds to keep the two automakers alive. Ford, which also received tax subsidies and incentive packages, chose not to go into bankruptcy instead mortgaging nearly all its assets, including the blue Ford Oval, for $23 billion. Alan Mulally refers to that transaction as "the largest home improvement loan in history." 

 

 

What were the other factors which kept Ford from its near-death experience?

There was Mulally's four-point plan which he preached often to anyone who would listen. The board of directors. Management team. Investment community. Union workers. The Ford family. 

Here's the plan:

1. Aggressively restructure to operate profitably at the current demand and changing model mix.
2. Accelerate the development of new products our customers want and value.
3. Finance our plan and improve our balance sheet.
4. Work together effectively as one team.

"Mulally's plan was predicated on a sweeping transformation of Ford's entire product portfolio," according to Bryce Hoffman in his book, "An American Icon." 

Other factors include instituting the now-famous Thursday Business Plan Review meetings in the Thunderbird Room at Ford's World Headquarters in Dearborn, Michigan. That process worked for Mulally at Boeing. 

He found this form of accountability to be effective in keeping the plan on course, sharing knowledge, monitoring problem areas, and making timely adjustments. The meetings, which continue to this day, are an example of how practical leadership development can be.

Alan Mulally would be the first to say he was not alone in this effort. In fact, it took hard work and sacrifice on the part of thousands of employees, a narrowed list of suppliers, support from the board and Ford family, as well as luck to pull off this "Motor City" miracle.

Not to be overlooked are Ford's customers who purchased the new and improved vehicles, making everything else possible.

Role of personal attributes

There were two additional components of the turnaround that need to be mentioned and should not be underestimated in contributing to Ford's success.

Alan Mulally, President, and CEO of Ford Motor Company

The first was Kansas-born Mulally's trademark smile. It hardly ever disappeared from his face, even in the darkest moments of the crisis, according to those who worked with him. And intelligence, experience, and toughness backed up the grin. 

The second was being the CEO--"chief encouragement officer."

From the beginning of his tenure in 2006, Alan Mulally promised his team that the ride back up from the bottom would turn out to be "a lot of fun."

His primary means of motivation, according to Hoffman's book, was a shared vision. Mulally would hug people in the hallway telling them they were going to make it if they would stay together and follow through on the plan. 

It's not surprising that a cult of personality has developed around the Ford CEO.  Says, Hoffman, who had access to Ford's leadership in writing the book, "Men and women stand and cheer him when he enters the room. They blush when he hugs them and shyly asks for his autograph. After all, Mulally helped save Ford and their jobs."   

In all this adulation Alan Mulally never ceased talking about the "team" and the importance of being "One Ford."

A call for encouragers

Do you know anyone short on support, confidence, or hope?    

Whatever the need, listening carefully and offering encouraging words may be one of the better gifts you can give this holiday season. Acting to help, not just talking, is the ultimate display of caring and generosity.

"In everyone's life, at some time, our inner fire goes out. It is then burst into flame by an encounter with another human being. We should all be thankful for those people who rekindle the inner spirit."  

So observed medical missionary and Nobel Peace Prize winner, Albert Schweitzer. 

Be encouraged--and give thanks to those who lit a flame in your life. And consider doing the same for somebody else.

Strategist.com

(C) Bredholt & Co.

 

 

 

 

  

  

What's Your Strategy IQ?

“The essence of strategy is choosing what not to do.”  

--Michael E. Porter

Ever notice how at just the right time the right people providentially come into your life?

So it was in the 1990s, during a study on thinking strategically, that Michel Robert, a co-founder of Decision Processes International, became a valuable resource.

The genesis of affinity is found in his book, "Strategy Pure and Simple."

It was Mike Robert who underscored the benefits of making a more apparent distinction between thinking and planning.  He even put the word "critical" in front of thinking which is sometimes a problem for those who score high on "positivity."  When placed in the context of asking the right questions, critical thinking (purposeful, reflective judgment) is foundational to positive outcomes. 

Mike's teaching derives from the writings of Benjamin Tregoe and John Zimmerman (Top Management Strategy) with real-time illustrations from his consulting practice at DPI. 

Three ideas stand out:

-Strategy as a framework. What do leaders use to guide them in making decisions about the nature and direction of the company? What's needed is a framework or future look to guide the process. This is preferable to an open-end arrangement that's undisciplined and could lead to a momentary attraction.

-Driving force. Select from the major operational components of the business (product, customer service, technology, production, or distribution) one ingredient that can be a driving force, propelling the enterprise into the future. It needs to be something the business does well. If this were theatre think lead actor (profit) and supporting player (marketing).

-Concept of the business.  Most mission statements have little meaning. They tend to be constructed imitations lacking original thought. Statements often reflect the lowest common denominators, a commodity more than a distinct position of strength. The book stresses that in a few sentences, no more than a paragraph, everyone in the organization should be able to describe what the business is and how it plans to be successful in its chosen markets. 

Whatever gives your company a distinct and sustainable advantage over competitors needs to be identified, widely known, and applied consistently to decision-making.

"Positions can't just be established or defended. The company has to keep finding new and unexpected ways to create value," Mike Robert would say.

What's your IQ?

No, not your intelligence quotient although that's important. We're referring to the organization's "strategic quotient." If you want to assess your strategic position, share this brief survey from Mike's book with the leadership team to check for clarity or gaps in strategy and execution:

1. Do you have a well-articulated, clear statement of strategy and business concept?
 
     Yes [  ]   No [  ] 

2. Could you write a one- or two-sentence statement of that strategy/business concept?

     Yes [  ]   No [  ]

3. Do your key subordinates understand that strategy/business concept?

     Yes [  ]   No  [  ]   Somewhat  [  ]

4. Could each of your subordinates write a one- or two-sentence statement of that strategy/business concept without consulting you or each other?

     One person could  [  ]   Some could   [  ]   None could   [  ]

5. Do they use this statement as a guide for the choices they make in pursuing new products, markets, and customers?

     Use frequently  [  ]   Use sometimes  [  ]   Never use  [  ]

6. Is it used as a filter to choose or reject products, markets, and customers?

     Yes  [  ]   Sometimes  [  ]    No  [  ]

7. Have you ever sat down as a management team to try to obtain consensus as to the future direction of your firm?

     Yes  [  ]   No  [  ]

8. Was consensus obtained or are there still different visions of what the organization is trying to become?

     Total consensus  [  ]    Single vision

     Some consensus  [  ]   Single vision

     Little consensus   [  ]    Different visions
      
9. Is the organization moving in a clear direction?

     Yes  [  ]   Not sure  [  ]   No  [  ]

10. Do you have a separate strategic thinking process to determine what you want to become as opposed to how you get there?

     Yes  [  ]  No  [  ]

11.  In a brief paragraph, what is your strategic business concept? 

Strategy.com

(C) Bredholt & Co.

    

Leadership Agenda: Stryker Corp.

Growing up in southwestern Michigan in the 1950s and 60s, I remember The Upjohn Co., a pharmaceutical manufacturing business, as the dominant and benevolent corporate presence in Kalamazoo, Michigan. A great company and community citizen.

Others contributed positively including General Motors Corp. (Fisher Body plant), Checker Motors Corporation (taxis), and respected Western Michigan University. Only the university survives with nearly 25,000 students. GM is now a restructured General Motors Co.

The Upjohn Co., founded by University of Michigan graduate, Dr. William E. Upjohn in 1886, was noted for its "friable pills" which were powdered and supposedly easy to digest.

A long run

As with many corporations, The Upjohn Co. came to an end in a 1995 merger with Pharmacia, later called, Pharmacia & Upjohn.  What remained of Upjohn, after a second merger with Monsanto and Searle in 2000, was consolidated by Pfizer Corp. in 2003. 

Pfizer is a major presence with an expansive global manufacturing facility on the former Upjohn site and an animal research center in downtown Kalamazoo.  

In 2007 the Frank Lloyd Wright-inspired Upjohn administrative office, officially known as Building 88, and sometimes referred to as the "Taj Mahal," was demolished.

A transition

Clearing away The Upjohn Co. office made it possible for Stryker Corp., founded in 1941 by Dr. Homer Stryker, also a Michigan graduate, to fulfill a role as Kalamazoo's leading "corporate" citizen with its world headquarters, three major business units, and 2,400 local employees. 

For perspective Stryker is a Fortune Magazine "most admired" company; is currently ranked 305 on the Fortune 500 list; has 33 international facilities; and sells higher-end medical-related products in 100 countries. Its total global employment is 24,000. 

Setting the agenda

In October of last year, Stryker, with sales in 2012 of $8.3 billion, promoted from within and named 47-year-old Kevin A. Lobo to be its president and CEO. The change came after former Chair and CEO, Stephen P. Macmillan, resigned over a personal family matter. 

Approaching the first anniversary as CEO, Mr. Lobo recently gave the Kalamazoo Gazette an extensive interview.  He offered up a leadership agenda (themes) for growth consisting of four areas critical to Stryker's long-term success:

• Globalization
• Collaboration
• Innovation
• Cost optimization

While most attention in organizational life is given to "strategic planning," Stryker's CEO has cooperatively developed a company-wide agenda that communicates priorities, internally and externally. The goal of this or any other leadership agenda is to give the planning process direction and build on the company's strengths.  

What's important to Mr. Lobo should matter to all Stryker associates, shareholders, current and prospective customers, as well as competitors.  

The agenda was not created in a vacuum as he appears to place a premium on listening. "You listen, learn, engage the teams, be transparent and open, identify areas of opportunity," the CEO offered in that interview. 

A clear No. 1

Having a list does not mean all things get equal attention at the same time.  For example,  globalization, which may be the number one priority, received the greatest attention in 2013 and made the most progress according to the Gazette interview. 

The globalization emphasis indicates an agenda should be treated as something dynamic, not linear, as new opportunities (or problems) emerge that were not thought about or present when the list was created. New leaders at the top soon discover that market forces demand flexibility in managing anything, including a list of priorities.

On the global checklist was the first acquisition in China with the $764 million purchase of Trauson Holdings Co. a lower-end manufacturer of medical equipment and devices. "Long term, emerging markets are very important and the fastest growing," Mr. Lobo said.   

A turnaround was needed in Europe so that's where more of the CEO's time was given to getting the right leadership in place.

Getting things done

No doubt the Chief Executive Officer spends a lot of time communicating his messages inside Stryker. The two Gazette articles are must-reading for employees and investors as the proposed path to the future is clear.   

Although Upjohn, GM, and Checker Motors lasted a combined average of 88 years, the fact they no longer exist is a reminder that corporate life comes without a guarantee.

To illustrate:

-Of the Fortune 500 companies that appeared on the first list, in 1955, only 71 hold a place on the list today. (The 1955 list included industrial companies only, whereas today's list also includes service companies.) 

-Nearly 2,000 companies have appeared on the list since its inception, and most are long gone.
 
When the CEO has a moment perhaps someone could take him by the former Upjohn administrative office site on Portage Road, not too far from the Stryker headquarters building next to Kalamazoo/Battle Creek International Airport. He would see a grassy knoll, with no sign of the Bruce Graham-designed building completed in 1961.  

The empty lot is a reminder to continually have the correct leadership agenda in place; work through the right people to have it successfully implemented; hold to core values, and adapt to market opportunities and changing customer demands.  

With hard work, and some luck along the way, Stryker Corp., now in its 72nd year, could achieve what The Upjohn Co. did and hit the century mark, even though there are no assurances that will happen. 

Yet for CEO Kevin Lobo, and everyone at Stryker, aging profitably is something a medical devices business, featuring orthopedic products, should know how to do.

Strategist.com

(C) Bredholt & Co.