Leadership Matters – Ballmer vs. Bezos

// <![CDATA[
tweetmeme_url = 'http://www.thephoenixprinciple.com/blog/2011/11/leadership-matters-ballmer-vs-bezos.html&#039;;
// ]]>

Not far from each other, in the area around Seattle, are two striking contrasts in leadership.  They provide significant insight to what creates success today.

Steve Ballmer leads Microsoft, America's largest software company.  Unfortunately, the value of Microsoft has gone nowhere for 10 years.  Steve Ballmer has steadfastly defended the Windows and Office products, telling anyone who will listen that he is confident Windows will be part of computing's future landscape.  Looking backward, he reminds people that Windows has had a 20 year run, and because of that past he is certain it will continue to dominate.

Unfortunately, far too many investors see things differently.  They recognize that nearly all areas of Microsoft are struggling to maintain sales.  It is quite clear that the shift to mobile devices and cloud architectures are reducing the need, and desire, for PCs in homes, offices and data centers.  Microsoft appears years late recognizing the market shift, and too often CEO Ballmer seems in denial it is happening – or at least that it is happening so quickly.  His fixation on past success appears to blind him to how people will use technology in 2014, and investors are seriously concerned that Microsoft could topple as quickly DEC., Sun, Palm and RIM. 

Comparatively, across town, Mr. Bezos leads the largest on-line retailer Amazon.  That company's value has skyrocketed to a near 90 times earnings!  Over the last decade, investors have captured an astounding 10x capital gain!  Contrary to Mr. Ballmer, Mr. Bezos talks rarely about the past, and almost almost exclusively about the future.  He regularly discusses how markets are shifting, and how Amazon is going to change the way people do things. 

Mr. Bezos' fixation on the future has created incredible growth for Amazon.  In its "core" book business, when publishers did not move quickly toward trends for digitization Amazon created and launched Kindle, forever altering publishing.  When large retailers did not address the trend toward on-line shopping Amazon expanded its retail presence far beyond books, including more products  and a small armyt of supplier/partners.  When large PC manufacturers did not capitalize on the trend toward mobility with tablets for daily use Amazon launched Kindle Fire, which is projected to sell as many as 12 million units next year (AllThingsD.com). 

Where Mr. Ballmer remains fixated on the past, constantly reinvesting  in defending and extending what worked 20 years ago for Microsoft, Mr. Bezos is investing heavily in the future.  Where Mr. Ballmer increasingly looks like a CEO in denial about market shift, Mr. Bezos has embraced the shifts and is pushing them forward. 

Clearly, the latter is much better at producing revenue growth and higher valuation than the former.

As we look around, a number of companies need to heed the insight of this Seattle comparison:

• At AOL it is unclear that Mr. Armstrong has a clear view of how AOL will change markets to become a content powerhouse.  AOL's various investments are incoherent, and managers struggle to see a strong future for AOL.  On the other hand, Ms. Huffington does have a clear sense of the future, and the insight for an entirely different business model at AOL.  The Board would be well advised to consider handing the reigns to Ms. Huffington, and pushing AOL much more rapidly toward a different, and more competitive future.
• Dell's chronic inability to identify new products and markets has left it, at best, uninteresting.  It's supply chain focused strategy has been copied, leaving the company with practically no cost/price advantage.  Mr. Dell remains fixated on what worked for his initial launch 30 years ago, and offers no exciting description of how Dell will remain viable as PC sales diminish.  Unless new leadership takes the helm at Dell, the company's future  5 years hence looks bleak.
• HP's new CEO Meg Whitman is less than reassuring as she projects a terrible 2012 for HP, and a commitment to remaining in PCs – but with some amorphous pledge toward more internal innovation.  Lacking a clear sense of what Ms. Whitman thinks the world will look like in 2017, and how HP will be impactful, it's hard for investors, managers or customers to become excited about the company.  HP needs rapid acceleration toward shifting customer needs, not a relaxed, lethargic year of internal analysis while competitors continue moving demand further away from HP offerings.
• Groupon has had an explosive start.  But the company is attacked on all fronts by the media.  There is consistent questioning of how leadership will maintain growth as reports emerge about founders cashing out their shares, highly uneconomic deals offered by customers, lack of operating scale leverage, and increasing competition from more established management teams like Google and Amazon.  After having its IPO challenged by the press, the stock has performed poorly and now sells for less than the offering price.  Groupon desperately needs leadership that can explain what the markets of 2015 will look like, and how Groupon will remain successful.

What investors, customers, suppliers and employees want from leadership is clarity around what leaders see as the future markets and competition.  They want to know how the company is going to be successful in 2 or 5 years.  In today's rapidly shifting, global markets it is not enough to talk about historical results, and to exhibit confidence that what brought the company to this point will propel it forward successfully. And everyone recognizes that managing quarter to quarter will not create long term success.

Leaders must  demonstrate a keen eye for market shifts, and invest in opportunities to participate in game changers.  Leaders must recognize trends, be clear about how those trends are shaping future markets and competitors, and align investments with those trends.  Leadership is not about what the company did before, but is entirely about what their organization is going to do next. 

Update 30 Nov, 2011

In the latest defend & extend action at Microsoft Ballmer has decided to port Office onto the iPad (TheDaily.com).  Short term likely to increase revenue.  But clearly at the expense of long-term competitiveness in tablet platforms.  And, it misses the fact that people are already switching to cloud-based apps which obviate the need for Office.  This will extend the dying period for Office, but does not come close to being an innovative solution which will propel revenues over the next decade.

Why Occupy Wall Street deserves more attention than the Tea Party

// <![CDATA[
tweetmeme_url = 'http://www.thephoenixprinciple.com/blog/2011/11/why-occupy-wall-street-is-more-interesting-than-the-tea-party.html&#039;;
// ]]>

Both the Tea Party and Occupy Wall Street want to change America.  That is where the similarity ends. 

The Tea Party is a well organized political machine.  It has clear leaders, an agenda, and it has raised substantial money it uses to promote political candidates that support its agenda.  It is a marvelous example of how a grass-roots organization can become large, powerful and thrive in today's America. It has created significance – which is no small task!

Occupy Wall Street is so disorganized it doesn't even appear to have specific leadership, or hierarchy.  It's even hard to label.  OWS participants demonstrate a lot of anger at the status quo, but shows no clear agenda about what they would like done differently.  OWS appears to have some ability to raise money for its encampments, demonstrations and legal work, but it does not appear to support any particular candidates, or even any particular regulatory platforms or Congressional issues.  Easily enough, one could say it is not significant and deserves little attention.

Just looking at the Republican Presidential campaign, it is pretty clear that the Tea Party is making a difference in what candidates say, and what they do.  The Tea Party clearly has impacted the political process.  On the other hand, for all the media attention Occupy Wall Street receives, it is completely unclear how OWS affects government at all.  Overall, or even in the Democratic party where you would expect progressives to be its best allies.

Yet, I find Occupy Wall Street more interesting than the Tea Party, and there are specific reasons I think everyone should pay attention.

For all its organizing skills, the Tea Party doesn't seem to be growing.  Its communication clarity, and its ability to rally supporters, belies the fact that the group isn't becoming any larger.  It has a hard core group of supporters, who are quite homogeneous, but it isn't attracting waves of new followers.  As a trend, it seems to have plateaued.  Whether it will have any impact outside its own relatively small group and enclaves is unclear.  We have a way of seeing the same people light up at Sarah Palin speaking gigs, but we don't see much groundswell of endorsements otherwise.

On the other hand, the Occupy Wall Street participants seem to be growing (at least if we track rally participants and arrests!).  There are more events, in more cities with each one seeming to bring in larger audiences.  Despite incredibly weak traditional "management" OWS is growing participants, which are remarkably diverse. And apparently willing to accept criminal prosecution for their involvement!

People from all ethnicities and age groups – and even income levels – are becoming involved in OWS.  It is no longer a "bunch of out of work college kids" as we see more pictures of retirees, blue collar workers, blacks, whites, asians and latinos.  Each new police initiative gives us more pictures of people being pepper-sprayed, billyclubbed and dragged away that leads readers to say "that looks a lot like my (cousin, aunt, grandma, uncle, father, etc.) " 

And the number of participating cities keeps growing, even becoming international.  Occupy Wall Street looks like a trend, even if we don't know exactly what that trend represents!  Despite lacking the focus of anti-war protests circa 1964 ("Hey, hey LBJ, how many kids did you kill today?") the events keep growing in number and attendance. – and seem remarkably drug and crime free given that we assume most participants are  – well – homeless, unemployed and impoverished.

The Tea Party talks a lot about history.  From generalizations about "the way things used to be," to frequent references to the 200+ year old Constitution.  It appears to represent replacing the status quo with previous behaviors,  including reaching back to the era before Federal income taxes and most regulatory departments – as if American had no recessions or economic problems prior to the Great Depression. 

Unfortunately, even as a someone north of 50, I find it hard sometimes to connect what the Constitutional framers meant with the reality of 2011 America.  Trying to relate Tea Party generalizations about "limited government" in a world where I'm happy someone assures nuclear power plant security and food safety are hard dots to find a connecting line.  Often the headline sounds good ("lower taxes") but the details leave me asking how do we invest in infrastructure to compete with China in 2012?  

For those who are under 35, such connections to historical perspectives are a remarkable struggle for relevancy, and appropriateness.   These people want are new solutions to today's problems – and those seem to be in short supply from the Tea Party.  While OWS folks all know how Ronald Reagan is, he's much less a god than he is  just a former President (like Kennedy, Roosevelt, or even Lincoln.)

When reading the Tea Party agenda, there isn't a lot about innovation.  For all its Libertarian viewpoints, which followers of Ayn Rand surely enjoy, how America in 2012 is going to increase investments, create jobs and become more competitive in a highly dynamic, global economy against skillful businesses from China, India, Brazil, Russia, etc is remarkably unclear. 

Even though supply side economics have been institutionalized since the Reagan era, there are no strong arguments that today's problems would be helped by doing more of the same.  Whereas there seems ample arguments that perhaps 30 years of doctrinaire implementation of such practices might have contributed to our current problems.

Regardless of your views on demand versus supply economics, there is a complete dearth of innovation in the Tea Party agenda, which is at the least troubling, if not problematic.  How is America to regain its growth agenda by voting into office Tea Party supported candidates?

On the other hand Occupy Wall Street seems to have at its core the notion that insufficient growth is precisely the issue.  The "99%" are people who, in a 2011 rendition of Howard Beale from the 1976 movie Network, have people throwing open their windows, sticking out their heads and shouting "I'm Mad As Hell and I'm Not Going to Take this Anymore." Protesters are screaming for innovation.  They clearly want more investment, particularly from banks, and more hands-on management of growth to create jobs.  Even if they lack any policy recommendations for how to make this happen.

It may sound a little like "mommy, I'm hungry, can you get me something to eat?" which would be naive for a 20-something to say.  But with millions of them living on futons in their parent's basements, using mobile phones paid for by parents, desperately in debt with college loans and with no prospects for work — it's a cry worth hearing, don't you think?  What is the answer that will allow them to apply their skills, enhance their growth – and buy a house!

The OWS people are genuinely angry.  They cannot comprehend why America cannot seem to create more jobs, or provide affordable health care for its citizenry, or even deal effectively with wave after wave of property value declines and foreclosures while those at the top of the economic pyramid seem to keep doing better every year.

Even if the OWS tactics are off-putting to the vast majority, their message does attract a tremendous amount of sympathy.  A lot of "regular people" (what Richard Nixon might have called the "silent majority") are asking, "why didn't the bank bailout seem to create jobs?  Did we really gain by saving GM?  How could we use so much government money, and seemingly still be in the same swamp? Why can't I refinance my house? Why do bankers and CEOs receive $10M bonuses after we bail out their industry?"

America has a growth problem.  Has had one for a decade now.  An inability to create jobs turned the first decade of this millennium into "the lost decade."  For the first time ever, America ended a 10 year span with fewer people working, the stock market lower, wages lower, fewer people insured, interest income non-existent due to low yields and tax receipts down – leading all the largest population states to the edge of bankruptcy and pension-system meltdown.  Like post 1995 Japan, America seems to be in a permanent "Great Recession."

And that problem has spilled over into other developed countries, with the Eurozone now struggling to deal with economic stagnation in countries such as Greece, Italy and Spain.  Harsh government program belt-tightening in Greece is designed to lower the spending costs closer to revenues, but how that will put the huge number of unworking Greeks, especially younger ones, to work is completely unclear. 

Throngs of unworking people in Italy and Spain are hearing that their future, as well, will involve less government assistance.  But where any jobs will be created from belt-tightening is simply not addressed. 

Occupy Wall Street is easy for a traditionalist to ignore.  One could blame their attention on "left wing liberal media." But there's a trend here. Something worth understanding.  Unless we invest in innovation to put people to work, this "movement" could become a much more serious social issue.   

 

Do you think you can fix that? – Filene’s, Syms, Home Depot, Sears, Wal-Mart

tweetmeme_url = ‘http://www.thephoenixprinciple.com/blog/2011/11/do-you-think-you-can-fix-that-filenes-syms-home-depot-sears-wal-mart.html&#8217;;

In the back half of the 1990s Apple was clearly on the route to bankruptcy.  Sun Micrososystems seriously investigated buying Apple.  After a review, leadership opted not to make the acquisition.  Sun’s non-officer management, bouyed on rumors of the acquisition, was heartbroken upon hearing Sun would not proceed.  When Chairman Scott McNeely was asked at a management retreat why the executive team passed on Apple, he responded with “Do you think you can fix that?”

Sun leadership clearly had answered “no.”  Good for a lot of us that Steve Jobs said “yes.” 

Sun has largely disappeared, losing 95% of its market cap after 2000 and being acquired by Oracle.  Why did Mr. Jobs succeed where the leadership of Sun, which couldn’t save itself much less Apple, feared it would fail?

For insight, look no further than the recent failure of Filene’s Basement (“Filene’s Saga Ends” Boston.com) and its acquirer Sym’s (“Retailers’s Sym’s and Filene’s Go Out of Business” Chicago Tribune.)  Most of the time, when a troubled business is acquirerd not only is the buyer unable to fix the poor performer, but investments incurred by the buyer jeapardizes its business to the point of failure as well.  Given the track record of corporations at fixing bad businesses, Mr. McNeely was on statistically sound footing to reject buying Apple.

Why is the track record of corporate management so bad at fixing problem businesses?  Largely because most of their time is spent tyring to extend the past, rather than create a business which can thrive in the future.

The leadership of Sun didn’t see a future filled with mobile devices for music, movies or telephony.  They were fixated on the Unix-based computers Sun built and sold.  It was unclear how Apple would help them sell more servers, so it was a management diversion – a “poor strategic fit” – for Sun to acquire a technology intensive, talent rich organization.  They passed, stayed focused on Unix servers and high-end workstations, and failed as that market shifted to PC products.

Much is the same for Filene’s Basement.  A great brand, Sym’s bought Filene’s in an effort to continue pushing the discount model both Filene’s and Sym’s had historically pursued.  Unfortunately, the market for discount department store merchandise was rapidly shifting to higher end middle-market players like Kohl’s, and for deeply discounted goods the internet was making deal shopping a lot easier for everyone.  Because management was fixated on the old business, they missed the opportunity to make Filene’s and Sym’s a leader in new retail markets – like Amazon has done.

Remember in 2006 when Western Auto’s leader (and former hedge fund manager) Ed Lampert bought up the bonds of KMart, then used that position to acquire Sears?  The market went gaga over the acquisition, heralding Mr. Lampert as a genius.  Jim Cramer urged on his television program Mad Money that everyone buy Sears.  Now the merged KMart/Sears company has lost much of its value, and 24×7 Wall Street claimed it was the #1 worst performing retail chain (“America’s Eight Worst-Performing Retail Chains“.)

Chart courtesy Yahoo.com 11/11/11 (note vertical scale is logarithmic)

Both KMart and Sears were deeply troubled when Mr. Lampert acquired them.  But he largely followed a program of cost cutting, hoping people would return to the stores once he lowered prices.  What he missed was a retail market which had shifted to Wal-Mart for the low-end products, and had fragmented into multiple competitors in the mid-priced market leaving Sears Holdings with no compelling value proposition. 

Mr. Lampert has turned over management, fired scores of employees, closed stores and largely led both brands to retail irrelevancy.  By trying to do more of the past, only better, faster and cheaper he ran into the buzz saw of competitors already positioned in the shifted market and created nothing new for shoppers, or investors.

And that’s why investors need to worry about Home Depot.  The company was a shopper and investor darling as it maintained double digit growth through the 1980s and 1990s.  But as competition matched, or beat, Home Depot’s prices – and often the capability of in-store help – growth slowed. 

The Board replaced the founding leader with a senior General Electric leader named Robert Nardelli.  He rapidly moved to operate the historical Home Depot success formula cheaper, better and faster by cutting costs — from employees to store operations and inventory.  And customers moved even more quickly to the competition.

As the recessions worsened job growth remained scarce and eventually home values plummeted causing Home Depot’s growth to disappear.  The company may be good at what it used to do, but that is simply a more competitive market that is a lot less interesting to shoppers today.  Because Home Depot has not shifted into new markets, it is in a difficult situation (and considered the 5th worst performing retailer.)  Who cares if you are a competitive home improvement store when your house is only worth 75% of the outstanding mortgage and you can’t refinance?

Chart source Yahoo Finance 11/11/11

And it is worth taking some time to look at Wal-Mart.  The chain is famous for its rural and suburban stores selling at low prices, both as Wal-Mart and Sam’s Club.  But looking forward, we see the company has failed at everything else it has tried.  It’s offshore businesses have never met expectations and the company has left most markets.  It’s efforts at more targeted merchandise, upscale stores and smaller stores have all been abandoned.  And the company remains a serious lagger in understanding on-line sales as it has continued pouring money into defending its historical business, providing almost no return to investors for a decade. 

The market is shifting, competitors have attacked its old “core,” but Wal-Mart remains stuck trying to do more, better, faster, cheaper with no clear sign it will make any difference as people change buying patterns. How can any brick-and-mortar retailer compete on cost with a web page?

Chart Source Yahoo Finance 11/11/11

All markets shift.  All of them.  Poor performance is most often an indication that the company has not shifted with the market.  Competition in lower growth markets leads to weak revenue performance, and declining profits.  Trying to “fix” the business by doing more of the same is almost always a money-losing proposition that hastens failure. 

It is possble to fix a weak business.  Moving with shifting markets into mobile has been very valuable for Apple investors.  Two decades ago IBM shifted from hardware sales to a services focus, and the company not only escaped bankruptcy but now is worth more than Microsoft.  

“Fixing” requires focusing on the future, and figuring out how to compete in the shifting market.  Rather than applying cost-cutting and operational improvement, it is important to determine what future markets value, and deliver that.  Zappos figured out that it could take a big lead in footwear and apparel if it offered people on-line convenience, and guaranteed taking back any products customers didn’t want (“What Other Businesses Can Learn from Zappos” CMSWire.com.)  It’s sales exploded.  Toms Shoes tapped into the market desire for helping others by donating a pair of shoes every time someone bought a pair, and sales are growing in double digits (CNBC video on Tom’s Shoes).

History has taught us to be pessimistic about fixing a troubled business.  But that is largely because most management is fixated on trying to defend & extend the past.  But turnarounds can be a lot more common if leaders instead focus on the future and meet emerging needs.  It simply takes a different approach. 

In the meantime, in retail it’s a lot smarter to invest in Amazon and retailers meeting emerging needs than those fixated on cost cutting and operational improvement.  Be wary of Sears, Home Depot and Wal-Mart as long as management remains locked-in to its past.

How “Best Practices” kill productivity, innovation and growth – Start using Facebook, Twitter, Linked-in!

tweetmeme_url = ‘http://www.thephoenixprinciple.com/blog/2011/11/how-best-practices-kill-productivity-innovation-and-growth.html&#8217;;

How much access do your employees have to Facebook, Twitter, Linked-in, GroupOn, FourSquare, and texting in their daily work, on their daily technology devices?  Do you encourage use, or do you in fact block access, in the search for greater security, and on the belief that you achieve higher productivity by killing access to these “work cycle stealers?”  Do you implement policies keeping employees from using their own technology tools (smartphone or tablet) on the job?

In 1984 the PC revolution was still quite young.  Pizza Hut was then a division of PepsiCo (now part of Yum Brands,) and the company was fully committed to a set of mainframe applications from IBM.  Mainframe applications, accessed via a “green screen” terminal were used for all document creation, financial analysis, and even all printing.  The CIO was very proud of his IBM mainframe data center, and his tight control over the application base and users. 

In what seemed like an almost overnight series of events, headquarters employees started bringing small PC’s to work in order to build spreadsheets, create documents and print miscellaneous memos.  They found the new technology so much easier to use, and purchase cost so cheap, that their productivity soared and they were able to please their bosses while leaving work on time.  A good trade-off.

The CIO went ballistic.  “These PCs are popping up like popcorn around here – and we have to kill this trend before it gains any additional momentum!” he decried in an executive meeting.  PCs were “toys” that lacked the “robustness” of his mainframe applications.  If users wanted higher productivity, then they simply needed to spend more time in training. 

Additionally, if he didn’t control access to computing cycles, and activities like printing, employees would go berserk using unnecessary resources on projects they probably should never undertake.  He was servicing the corporation by keeping people on a narrow tool set – and it gave the company control over what employees could do as well as how they could do it making sure nothing frivolous was happening.  For all these reasons, plus the fact that he could assure security on his mainframe, he felt it important that the CEO and executive team commit with him that PCs would not be allowed in Pizza Hut.

Retrospectively, he looks foolish (and his efforts were unsuccessful.)  PCs unleashed a wave of personal productivity that benefitted all early adopters.  They not only let employees do their work faster, but it allowed employees to develop innovative solutions to problems – often dramatically lowering overhead costs for many management tasks.  PCs, of course, swept through the workplace and in only a decade most mainframes, and their high cost, air conditioned data centers, were gone. 

Yet, to this day companies continue to use “best practices” as a tool to stop technology, and productivity improvement, adoption.  Managers will say:

1. We need to control employee access to information
2. We need to keep employees focused on their job, without distractions
3. We must control how employees do their jobs so we minimize errors and improve quality
4. We need to control employee access externally for security reasons
5. We need consistency in our tool set and how it is used
6. We made a big investment in how we do things, and we need to leverage that [sunk cost] by forcing greater use
7. We need to remember that management are the experts, and it is our job to tell people how to do their jobs.  We don’t want the patients running the hospital!

It all sounds quite logical, and good management practice.  Yet, it is exactly the road to productivity reduction, innovation assassination and limited growth!  Only by allowing employees to apply their skills and best thinking can any company hope to continuously improve its productivity and competitiveness.

But, moving from history and theoretical to today’s behavior, what is happening in your company?  Do you have a clunky, hard to use, expensive ERP, CRM, accounting, HR, production, billing, vendor management, procurement or other system (or factory, distribution center or headquarters site) that you still expect people to use?  Do you demand people use it – largely for some selection of the 7 items above? Do you require they carry a company PC or Blackberry to access company systems, even as the employee carries their own Android smartphone or iPad with them 24×7?

Recently, technology provider IFS Corporation did a survey on ERP users (Does ERP Mean Excel Runs Production?) Their surprising results showed that new employees (especially under age 40) were very unlikely to take a job with a company if they had to use a complex (usually vendor supplied) interface to a legacy application.  In fact, 75% of today’s users are actively seeking – and using – cloud based apps or home grown spreadsheets to manage the business rather than the expensive applications the corporation supplied!  Additionally, between 1/3 and 2/3 of employees (depending upon age) were actively seeking to quit and take another job simply because they found the technology of their company hard to use! (CIO Magazine: Employees Refusing to Use Clunky Enterprise Software.)

Unlike managers invested in historical decisions, and legacy assets, employees understand that without productivity their long-term employment is at risk.  They recognize that constantly shifting markets, with global competitors, requires the flexibility to apply novel thinking and test new solutions constantly.  To succeed, the workforce – all the workforce – needs to be informed, interacting with potential new solutions, thinking and applying their best thoughts to creating new solutions that advance the company’s competitiveness.

That’s why Fast Company recently published something all younger managers know, yet shocks older ones: “Half of Young Professionals Value Facebook Access, Smartphone Options Over Salary.” It surprised a lot of people to learn that employees would actually select access over more pay!

While most older leaders and managers think this is likely because employees want to screw off on the job, and ignore company policies, the article cites a Cisco Connected World Technology Report which describs how these employees value productivity, and realize that in today’s world you can’t really be productive, innovative and generate growth if you don’t have access – and the ability to use – modern tools. 

Today’s young workers aren’t any less diligent about work than the previous generation, they are simply better informed and more technology savvy!  They think even more long-term about the company’s survivability, as well as their ability to make a difference in the company’s success.

In other words, in 2011 tools like Linked-in, Facebook, Twitter et. al. accessed via a tablet or smartphone are the equivalent of the PC 30 years ago.  They give rapid access to what customers, competitors and others in the world are doing.  They allow employees to quickly answer questions about current problems, and find new solutions.  As well as find people who have tried various options, and learn from those experiences.  And they allow the employee to connect with a company problem fast – whether at work or away – and start to solve it!  They can access those within their company, vendors, customers – anyone – rapidly in order to solve problems as quickly as possible.

At a recent conference I asked IT leaders for several major airlines if they allowed employees to access these tools.  Uniformly, the answer was no.  That may be the reason we all struggle with the behavior of airlines, I bemoaned.  It might explain why the vast majority of customers were highly sympathetic with the flight attendant that jettisoned a plane through the emergency exit with a beer in hand!   At the very least, it is a symptom of the internal focus that has kept the major airlines from pleasing 85% of their customers, while struggling to be profitable.  If nobody has external access, how can anybody make anything better?

The best practices of 1975 don’t cut it in 2012.  The world has changed.  It is more important now than ever that employees have the access to modern tools, and the freedom to use them.  Good management today is not about telling people how to do their job, but rather letting them figure out how to do the job best.  Implement that practice and productivity and innovation will show themselves, and you’re highly likely to find more growth!