Lurching from 2011 to 2012: Noted and Notable
By Mark Chussil
I get around a bit. I conduct business war games for companies in different industries and different countries; I speak at conferences; I teach classes. I’ve noticed a few things. This isn’t the grand unifying theory of strategy that we all crave. It’s just a few observations as we lurch, slide, dive, bound, stagger, drag, and hop(e) from 2011 to 2012.
Budgets versus investments
A classic difference between an established company and an upstart is that the former sees budgets and the latter sees investment. That seems true of countries too. Of course there’s nothing that forces established companies or countries to see budgets instead of investments; it’s a decision, an attitude, and some do focus on investments. The point is that upstarts always see investments, and when budgets confront investments, investments win. (See also Do Not Overtighten and Answering Four Questions Well.) I suspect there’s a link between a budgets culture and lack of agility. It’s unclear to me which is cause and which is effect.
Take my risks, please
I spoke a few weeks ago in New York City at a conference of chief strategy officers sponsored by The IE Group. Many speakers spoke of the need to encourage risk-taking, yet outside such conferences we see little patience or tolerance for the hiccups that come with risks. Take Netflix. People have written scorching articles about CEO Reed Hastings, based on a couple of ambiguous short-term metrics, when he’s clearly making a long-term shift to avoid copying Blockbuster’s implosion. I’m not saying Hastings is right, nor am I saying he’s wrong. What I am saying is that it’s wrong to judge the quality of a long-term strategy on the basis of ambiguous short-term metrics. (See also Netflix Gone Vile: Fourteen Reasons Why Netflix Was Wrong, Or Not.) And I am also saying that, in an intolerant you-should-have-known culture that demands eternal and infallible accountability, how can we expect even a successful CEO to accept necessary risks?
I’m still confused
The last observation for now is that much of the public discourse around debt and austerity confuses me. I don’t particularly mind confusion, especially because I’m used to it. I envy people who glow with the comfort of certainty even if I don’t admire them. Anyway, it seems to me that when supply exceeds demand there is no reason to increase supply, so until demand grows we’re not likely to hire or build much. The movie Field of Dreams had a catchy line but it’s backward. It’s not “if you build it, they will come.” It’s “if they come, you will build it.” We all — companies, countries, citizens — need to demand demand.
Thank you, and best wishes for 2012
Thank you for being here with me. Best wishes for you and your family to enjoy a safe, peaceful, joyous, and prosperous 2012.