Business Blog: Hoover’s Business Insight Zone

The talk of the football world this week is the murder of Sean Taylor, a Pro Bowl safety for the Washington Redskins. Although the circumstances of Taylor’s death are shocking — chilling, really — football teams at least prepare for all sorts of eventualities when they assemble their rosters: injuries, suspensions, trades, mixing different skill sets, the emergence of young players, the decline of veterans, and so on.

To help them in this, football teams prepare formal depth charts. So while the Redskins will have to grapple with all the sadness and pain surrounding Taylor’s death — not to mention enormous media attention during the homestretch of the NFL season — they already have solid ideas about who will play safety in Taylor’s place this Sunday — because they have a depth chart.

No corporation expects a CEO (or anyone else) to be a victim of murder, any more than NFL teams expect to lose players that way. But the age of CEOs and the vagaries of life leave the door open for many kinds of exits: setting aside the fact that your CEO might be hired away by a bigger company or fired, he or she might drop dead of a heart attack, fall ill from cancer, go down in a plane crash, get hit by a drunk driver. You name it — accidents happen.

If you’ve read this blog much, you’ll see where I’m headed: smart companies have an executive depth chart. They know who will step in if the CEO departs, expectedly or unexpectedly, but it goes deeper than that. They also know who will step in for the CFO, the CTO, the division chiefs, the controller, and on down the line. Sometimes this knowledge is implicit: everyone agrees without saying so that if the general counsel is struck by lightning, the deputy counsel will step in.

But for lesser companies, arrangements are unspoken not because they’re implicit but because there is no agreement on them. People don’t know where they stand. The board doesn’t know who will succeed the CEO in event of emergency. It’s not agreed upon that deputy counsel will succeed the general counsel, or that the general counsel will succeed the CFO if needed, or that the CFO will succeed the CEO if needed. If it’s the CFO who contracts cancer and retires early, the trouble is muted, because the CEO can make a forceful decision on a successor. But when the CEO departs abruptly . . . you need a depth chart.

Board members of publicly held companies have a duty, I assert, to make sure that at least the rudiments of such a depth chart are in place. Not later, but today — because no one knows when tragedy will strike, even if it’s nothing as gruesome as what happened to Sean Taylor.

After the recent flurry of CEO departures at major firms, we don’t need any more instructive examples. We need consistent good practices far and wide.

In the wake of my post the other day about reflexive bashing of Twitter, I was planning to write something about the cycles of hype and anti-hype in the blogosphere, the pendulum swings of which you could probably plot mathematically. But then I came across this piece of wisdom from Josh Bernoff of Forrester Research:

The cult of immediacy versus the unstoppable groundswell

I think bubble thinking is driven by the swirl of events in this frenzied cult of immediacy. It’s hard to think straight when your head is buzzing with the cocaine high of whatever happened ten minutes ago. Steve Rubel, quoting Brian Reich, called it out as “Shiny Object Syndrome.” Behind this bubble is a reality driving forward, an unstoppable groundswell. Stuff that builds with that trend will matter. The rest will be swept away. . . .

You may think corporations don’t get it, but they do, eventually — they just move more slowly and carefully. I’ve now spoken with dozens — they’re spending real money, moving forward with projects, making mistakes, learning, and mobilizing. They have lots of money and big brands. As the mass of regular people absorbs these social phenomenon, many of those companies will be there to meet them, and laugh if you want, but they are not all clueless — not any more.

In the end, the blogosphere has its fun with the news of the moment. Often they (er, we) have smart things to say. But in the long run . . . only the long run matters.

It’s nearly December, which means it’s time for the 2007 retrospectives. Here’s a good pretty good one that reviews some of the top tech failures of the year. (I might have included the unfolding Beacon saga at Facebook, but that’s with the advantage of an extra 10 days of hindsight over this November 20 story.)

Top 10 Tech Train Wrecks of 2007

(Thanks for the link, Mom!)

This Esquire piece, even if it presents the Fahrenheit 212 consultancy in the best possible (or breathless?) terms, provokes interesting thoughts about how bigger companies could do things better, especially when it comes to innovating their way out of jams in the marketplace. Commentary follows excerpts.

This Company Will Save Your Brand

[After talking with F. 212 insiders,] You begin to have the tiniest understanding why monsters like Samsung, Warner Music, Hershey, and NBC have tapped little Fahrenheit 212 to defibrillate their brands.

. . . Here is how Fahrenheit 212 works: They don’t pitch clients; they wait for clients to come to them. When one does, all eighteen employees get on board with the project: creative directors (including one who worked in robotics for NASA and designed rides for Disney), finance experts, designers, business directors (including one with a psychology/philosophy masters from Oxford), a strategic analyst with degrees in sociology and international affairs, and an office manager who was an off-Broadway actor. The company then spends about five months spinning ideas, trying to turn the status quo on its head. Then they actually make whatever new products they dream up, presenting them to the client in ready-to-sell form. Often, what’s presented is the last thing a client expects but precisely what it needs.

. . . Up to two thirds of the firm’s total fee is contingent upon success. In other words, for it to make serious money, its ideas not only have to be market ready, they have to be successful once they get there.

. . . [Their new deodorant concept is] not a miracle cure or the discovery of a new species. But it’s unlike any deodorant, ever — a significant improvement on a mundane, unimprovable product. Which makes you wonder what Fahrenheit 212 might do with something bigger, like the music business. (They’ve been hired by Warner to help rethink the industry’s tired, failing business model.) Or bigger, even. Would it hurt to ask Fahrenheit to spend a few days lifting the hood on the oil industry? Or to do a “big, fast, and doable” (as Vuleta would say) brainstorm with the Sunnis and the Shiites?

Many big companies get so caught up in their own processes that they can’t hear themselves think — or they don’t let themselves think. As Seth Godin points out, you can spend nine-tenths of your day fighting battles inside the company or simply dealing with the cognitive overwhelm of our modern communications systems.

Here’s an observation-cum-philosophical ramble: An organization exists to organize the efforts of a group, so that the group can accomplish more than its members could accomplish individually. This implies specialization, which is why we have different departments for production, sales, finance, marketing, IT, and so on. But specialization — and the simple fact that organizations are large — means that there must also protocols in place to regulate the whole organism. Human nature being what it is, each one of us tends to focus on the protocols that mean the most to us personally, rather than on the best interests of the organism as a whole. It’s a natural by-product of working within an organization that is too big to be comprehended in its entirety. But it also means that we come to prize the protocols — SOPs, hierarchies, workflows — more than they deserve, i.e. not not as tools to achieve organizational ends, but as ends in themselves.

But not Fahrenheit 212. They’re a small band of hyper-creative outsiders, augmented by a few more hyper-creative contractors to do things like 3-D rendering. They don’t have a vested interest in the protocols of a particular company (Samsung, Warners, Hershey, etc.) or of the company’s industry (electronics, music, sweets, etc.). So not only are they not afraid of breaking crockery, they can move ahead without even knowing what crockery they’re threatening to break.

And — big surprise — they’re a ton more innovative than the big, typically bloated enterprises for which they work.

Keep doing things the same way you’ve been doing them, and it’s reasonable to expect that you’ll keep getting similar results — or eroding results, if your industry changes as fast as the electronics business or the music business. But if you’re willing to change things up and send the sacred cows to the slaughterhouse — which would seem to be one of Fahrenheit 212’s principal jobs — you might reap breakthrough success that for now exists only in your dreams.

Ed Zander’s not really out, he’s just kicked upstairs to the chairman role while MOT long-timer executive* Greg Brown takes over the CEO duties. Two quick thoughts:

1. Yes, given my previous diatribes on this point, I’m pleased that the Motorola board believed that there was someone in the house — someone whose record sure looks like a future CEO’s record — to take over the reins. According to the company’s press release, Brown has “headed four different businesses at Motorola. He also led the $3.9 billion acquisition of Symbol Technologies” — on top of serving as president and COO until this promotion.
2. Ed Zander came into Motorola with a stellar record compiled at Sun Microsystems and as a venture capitalist. So here’s the question: is it that Zander just didn’t have the right answers for what ails Motorola . . . or is it that Motorola is now operating in a telecom market environment so different from before that the answers aren’t there?

Time will tell how Brown does. I’ll be watching with interest.

~

* UPDATE: What with all the puffery in the press release, I misremembered Brown’s history with the company.  As this post points out, he’s been with MOT only since 2003.  Still, it’s better to have a medium-term insider take over the CEO reins than to have to turn to an outsider.

Michael Dell on Apple, 1997:

“What would I do? I’d shut it down and give the money back to the shareholders.”

Apple’s performance for the 2007 quarter just passed:

• Apple Rises to a Record on Macintosh Sales, Outlook
• Apple results top targets, Mac sales strong

Dell’s performance for the 2007 quarter just passed:

• Dell shares fall 10% on poor results
• HP grabs punishing lead over Dell in PC market share

Percy Bysshe Shelley’s commentary on same, 1818:

. . . “My name is Ozymandias, king of kings:
Look on my works, ye mighty, and despair!”
Nothing beside remains: round the decay
Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.

~

* Not really, of course. Dell’s middle name is actually Saul. Which is no help at all for the writer trying to evoke something poetic about the problems at Dell’s company.

I’ve always been impressed with Eddie Lampert’s smarts.* And he may have big, deep plans for the long run about how the cash generated by Sears Holdings will fuel amazing investment returns. But at some point, doesn’t the company have to perform well on its own terms?

Sears Profit Drops,
Bringing Forecasts
Of a Restructuring

Edward S. Lampert, lionized until recently for his ability to turn a ho-hum retailer into a dazzling financial play, finds himself in a box with Sears Holdings Corp.

Falling sales and sharply weaker earnings could force the Sears chairman to restructure the company at a time when weak credit and real-estate markets will make such a move more difficult.

The Hoffman Estates, Ill., retailer yesterday reported third-quarter profit plummeted 99% on a modest sales decline. It also forecast glum year-end results, noting markdowns on bulging inventories would hurt margins in what is historically the company’s most profitable quarter.

~

* A quick search uncovers these posts I’ve written related to Lampert:

• Interesting re Eddie Lampert.
• Just how smart is Eddie Lampert?
• Oooh, I love me some buyout rumors . . .

~~~

Yesterday while I was out and about I used my laptop to compose a blog post. Since there was no WiFi access where I was at the time, I just saved the post as a Notepad document.

Now that I’m back in the saddle at work, I want to plug in that post here . . . but the only copy of it lives on my laptop, which is sleeping on my desk at home.

Document sharing service Zoho made news in the past few days by launching a feature that allows you to work on Zoho docs offline, then sync them online whenever you like. But as I do with many tidbits of tech-geek niftiness, I just made the tiniest mental note of it, thought that the procedure might be slightly more complicated than I’d like, and moved on to other things. Now I’m wishing that I’d fired up my Zoho account and set the thing up, because then maybe I wouldn’t be in the (very mild) Predicament of the Trapped Blog Post.*

What I’d like is to have access today to the future system — I take it for granted that it will someday exist — that will automatically, without friction or even thought on my part, park my files where best it can park them, i.e. on my hard drive if there’s no Internet connection, on Zoho’s (or Google’s, etc.) servers if there is an Internet connection. I want this to work like my cell phone works when I fly from Austin to Denver: I turn it off when the flight attendants tell me to, and then when I turn it on again in Colorado, it knows automatically that it should now display Mountain Time.

The best technology is the stuff that keeps you from having to think about it. That’s what I want from the ideal electronic filing system.

~

* For some reason, that sounds to me like the title of a Sherlock Holmes short story: “The Predicament of the Trapped Blog Post.”

“What do you suspect, Holmes?”

“We need not suspect, Watson, that which we may know for a certainty. And we may take it as certain that the victim did not have use of Zoho document sharing — else why would he not have liberated the blog post?”

“Remarkable, Holmes. Perfectly sensible when you say it, but it would have taken me an hour to puzzle it out.”

“Nonsense, Watson. You underestimate yourself. . . .”

A tidal wave of evidence supports the idea that multitasking, that bliss / obsession / fever dream / affliction of so many of us, actively impedes our ability to work and think.

And yet we persist. Walter Kirn explores this phenomenon in an interesting, if flawed, essay (subscription required) in the 150th anniversary issue of The Atlantic Monthly.

The Autumn of the Multitaskers

The effects aren’t just personal, but societal — and certainly they loom large for the business world. Here’s a key passage from Kirn:

There may be a financial cost to multitasking as well. The sum is extremely large and hard to vouch for, the esoteric algorithm that yielded it a puzzle to all but its creator, possibly, but it’s one of those figures that’s fun to quote in bars.

Six hundred and fifty billion dollars. That’s what we might call our National Attention Deficit, according to Jonathan B. Spira, who’s the chief analyst at a business-research firm called Basex and has estimated the per annum cost to the economy of multitasking-induced disruptions. (He obtained the figure by surveying office workers across the country, who reported that some 28 percent of their time was wasted dealing with multitasking- related transitions and interruptions.)

That $650 billion reflects just one year’s loss. This means that the total debt is vastly higher, since personal digital assistants (the devices that, in my opinion, turned multitasking from a habit into a pathology, which the advent of Bluetooth then rendered fatal and the spread of wireless broadband made communicable) are several annums old. This puts our shortfall somewhere in the trillions . . .

The essay overreaches at points (e.g. in the section on Enron that follows close after the quotation above), but overall Kirn hits the mark in important ways.

The short version is that multitasking is a ruse, a scam, because our brains simply are not wired to do more than one complex or novel behavior at a time. Yes, I can hold up a conversation with you while I’m driving and you’re riding next to me, so long as the driving is uncomplicated. But what do we both do when I approach the on-ramp, or have to merge in traffic to get around a construction site? We both reflexively shut up long enough for me to do the more complicated bit of driving; we resume normal conversation only when that complexity has passed.

Yet our working days are filled with interruptions that derail our productivity. Worse, we choose many of these interruptions.

My own pledge to myself: to make myself less crazy with all the multitasking. Sure, sometimes we all must task-switch, but many of us embrace a level of multitasking — and cognitive hell — that reaches far beyond this.

I’m with Kirn: enough, already. Let’s get some real work done instead.

Just a housekeeping note here, folks: As I looked at my blog dashboard just now, I realized that the prior post was the 400th in the history of this blog. This seems like a good point to say something that I hope is clear all the time, but is probably worth reiterating, viz.,

You have a standing invitation to tell me what you’d like to see on this blog.

For the most part, I respond to the news and to the themes that particularly motivate me, but I’m always interested to know which topics interest you the most.

So, please feel free to leave a comment here, drop me an e-mail (hoovers-dot-com, twalker-at), or to send me a tweet via my Twitter account.

Thanks for reading!