Corporate Ghettos


When the personality of an organization breaks up, individuals develop their own cult following. A reaction common to many organizations is the establishment of corporate ghettos, where individuals gather together in the absence of proper leadership to form informal but fiercely defensive groups.

These separate ghettos become the mainstay of internal communication and loyalty switches from the organization to the ghetto. All socializing and as much working contact as possible is restricted to other members of the ghetto.

Ghettos can have amazing influence on the lives of all concerned and in time come to dominate the entire culture and effectiveness of an organization.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

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The Deliberate Innovation Strategy


The strategic choice view argues that if an incumbent is not the first to introduce an innovation, it may not be because it has no incentive to invest, its competence has been destroyed, it has not recognized the potential of the innovation, it does not have the complementary assets, it did not use the right adoption mechanism, or it is an environment that is not conducive to innovation. It may be because of the firm’s innovation strategy—its goals, timing, actions, and resource allocation in using new knowledge to offer new products or services. By making the right choices early, a firm can build the right competences and complementary assets, or even shape the kind of environment in which it is going to operate.

There are several innovation strategies: offensive, defensive, imitative, dependent, traditional, and optimistic. A firm with an offensive strategy is the first to introduce new products. If the strategy is to be the first to innovate, it will invest in the innovation and build the capabilities to do so.  In a defensive innovation strategy, a firm waits for a competitor with an offensive strategy to introduce a product first and resolve some of the uncertainties confronting the innovation. The defensive firm then introduces its own product, correcting any mistakes that pioneers may have made.

Firms pursuing a defensive strategy normally have very strong complementary assets—capabilities such as marketing, manufacturing, distribution channels, and reputation which allow a firm to commercialize an invention—and when they decide to move, they do so very quickly. They usually have a strong R&D since it takes knowledge to absorb knowledge. The product is not an imitation of the pioneer’s version but rather a differentiated product, often with better features and lower cost. The firm, in effect, catches up with or leapfrogs the pioneer. Thus not being the first to introduce an innovation may not be a sign of a lack of incentive to invest, competence destruction, absence of appropriate complementary assets, inappropriate adoption mechanism, or being in the wrong environment. It may be because the firm in question has a defensive strategy.

While a firm with a defensive strategy would like to differentiate its products, one with an imitative strategy would like to produce a clone of the pioneer’s product. It has very little attention of catching up with or leapfrogging the pioneer. It usually has such low-cost capabilities as lower labor costs, access to raw materials, and strong manufacturing. In the dependent strategy the firm accepts a subordinate role to a stronger firm. It imitates product changes only when requested by the customer or superior. Many large Japanese firms have these satellite firms. The traditional strategy makes very few changes to products, only striving to offer the lowest cost possible. In the opportunistic strategy the firm looks for some unique needs of a market segment that are not being met—it looks for a niche market. The point in all these other strategies is that a firm’s failure to introduce a product first can be due to its deliberate strategy.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Crisis Communication


One of the most visible functions of the PR department is to help management plan for and respond to crisis. A good PR professional looks for potentil problems, constantly scans the business environment, then alerts management to the implications of such problems, and suggests the best course of action.

Disasters of earthquake proportions fall into the category of public relations nightmares created by sudden , violent accidents. Plane crashes, oil spills, chemical leaks, and product defects all belong to this group. The other type of crisis is the sort that builds slowly and occurs because of a company’s conscious, but ill-founded, decisions.

Whn disaster strikes , a defensive posture is generally counterproductive. The best course is to be proactive, admit your mistakes and apologize.

When disaster hits most companies respond, to some degree, through their public relations department, but they often ignore the audience that is likely to be hit hardest—employees. To minimize the impact of any crisis on employees, be sure to communicate honestly, openly, and often, actively encourage employees to share their concerns, and use caution when sharing personal opinions.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Lectures, Line of Sight

Leveraging better Payment Terms


Negotiating better payment terms is always easier if a company has some bargaining chips. The party with the most to lose or the most to gain is always on the defensive; therefore, the secret to successful negotiating is to develop leverage that forces the other party into one or the other of these positions. Other than not meeting payroll, only two conditions might create circumstances more detrimental to a company on the brink of failure than to a creator: (1) being evicted from the building that houses the business, and (2) not receiving critical materials and services to keep the business going.

 

Not much can be done about either situation. A business must be housed, and it must have materials and services to make and sell products. That’s why landlords and critical suppliers top the payment priority list. Some leverage can be achieved, however. Most lessors would rather work out an extended payment arrangement than go to the expense and aggravation of a formal eviction. As long as the renter’s market holds, deferring rent payments for at least several months should be a real possibility. That’s not a permanent solution, but it does provide some breathing space.

 

It might be possible to leverage critical suppliers to gain better terms. The threat to go to a competitor usually brings even the most recalcitrant supplier to terms. In most cases, a supplier has more to lose (the overdue amounts plus legal costs to sue) or gain (future sales) than a debtor company does. At least making suppliers think that’s the case is good negotiating ploy.

 

Assuming that you have taken reasonable precautions to safeguard your personal assets, the worst thing that can happen is that you will be forced to liquidate the business. Granted, this can be a blow to any entrepreneur’s ego. It might also reduce personal income for a while, however, once the liquidation is over, you can always begin again. As long as creditors believe that they have the most to lose, you’re in driver’s seat. The ultimate creditors’ threat is to force the company into bankruptcy. By making it clear that this won’t hurt and that other plans for the future are in the works anyway, such leverage vanishes abruptly.

 

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Building Shared Vision


The skills involved in building shared vision include the following:

  1. Encouraging Personal Vision. Shared visions emerge from personal visions. It is not that people only care about their own self-interest. People’s values usually include dimensions that concern family, organization, community, and even the world. Rather, it is that people’s capacity for caring is personal.
  2. Communicating and Asking for Support. Leaders must be willing to continually share their vision, rather than being the official representative of the corporate vision. They also must be prepared to ask, “Is this vision worthy of your commitment?” This can be difficult for a person used to setting goals and presuming compliance.
  3. Visioning as an ongoing process. Building shared vision is a never ending process. At any one point there will be a particular image of the future that is predominant, but that image will evolve. Today, too many managers want to dispense with the “vision business” by going off and writing the Official Vision Statement. Such statements almost always lack the vitality, freshness, and excitement of a genuine vision that comes from people asking, “What do really want to achieve?”
  4. Blending extrinsic and intrinsic visions. Many energizing visions are extrinsic, that is, they focus on achieving something relative to outsider, such as a competitor. But a goal that is limited to defeating an opponent can, once the vision is achieved, easily become a defensive posture. In contrast, intrinsic goals like creating a new type of product, taking an established product to a new level, or setting a new standard for customer satisfaction can call forth a new level of creativity and innovation. Intrinsic and extrinsic visions need to coexist; a vision solely predicated on defeating an adversary will eventually weak an organization.
  5. Distinguishing Positive from negative visions. Many organizations only truly pull together when their survival is threatened. Similarly, most social movements aim at eliminating what people don’t want: for example, anti-drug, anti-smoking movements. Negative visions carry a subtle message of powerlessness: people will only pull together when there is sufficient threat. Negative visions also tend to be sort term. Two fundamental sources of energy can motivate organizations: fear and aspiration. Fear, the energy source behind negative visions, can produce extraordinary changes in short periods, but aspiration endures as a continuing source of learning and growth.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Change and Transformation Losers


Losers adopt a combination of attitudes, approaches and priorities, from a limited vision and a short-term and internal orientation, through cutting corners, to attempts to protect corporate interests, and this locks them into a ‘spiral of descent’. The almost inevitable outcome of their actions and inaction is a struggle to remain viable as a supplier of low-margin commodity work.

Losers become reactive and defensive, get lost in complexity of labyrinthine proportions and the more activities they engage in to break free, the more they become entangled. They introduce changes for changes’ sake. They become neutralized by their lack of imagination and entangled in barbed wire created by their own words and actions. The trick they try to play is to retire or to move on at a high point.

Losers in the battle to become and remain competitive:

·        are ‘in their own space’ and relatively oblivious to the needs of others; they do not anticipate and remain unaware of significant external developments and pressing requirements to change;

  • lack self-confidence and self-worth and hold back, they are different, can be indicative and find it difficult to commit themselves;
  • do not have a compelling rationale and purpose; they are not unique, special or even distinctive;
  • are not noticed by people, they are grey and dull, and hence fail to stand out or have an impact;
  • copy and follow others; they do not innovate or differentiate  themselves from their competitors;
  • respond to events; they react to incoming approaches and invitations to tender;
  • do not prioritize and focus; they fail to address what is important as a result of being distracted by trivia;
  • hoard information and hold on to the reigns of power; they are reluctant to delegate and to trust and involve others;
  • remunerate people according to their seniority and status in the management hierarchy;
  • are driven by internal personal goals and corporate targets rather than by customer requirements;
  • play other people’s games rather than live on their own terms; they become pawns on other people’s chessboards;
  • adopt standard approaches and are rigid and inflexible;
  • follow fashions and have a penchant for fads;
  • search for panaceas and single solutions;
  • define their capabilities in terms of the tangible assets they own and the people they employ;
  • are consumers rather than producers of knowledge, understanding  and intellectual capital;
  • respond unimaginatively and mechanically to business opportunities;
  • rely on traditional ‘hard-self’ techniques and undertake win-lose negotiations;
  • make little effort to learn from either their experience or that of others;
  • hold back and stay aloof; they avoid personal commitments, partnering  arrangements and inter-organizational links;
  • are selfish in relationships and put the minimum of effort into maintaining them;
  • use their customers to achieve their own short-term objectives;
  • are cautious and half hearted in their approach to e-business;
  • mouth generalizations and they indulge in self-deception and spin;
  • live for the moment; they have short time horizons;
  • do little to keep competitors out of their key accounts;
  • leave the building of customer relationships to specialist sales staff;
  • ignore organizations that are supplied by competitors;
  • prize their freedom and independence, they prefer to operate alone;
  • attempt to protect their interests with small print and avoid the assumption and sharing of risks;
  • are secretive and defensive; they build internal and external barriers to create a hard shell;
  • offer other employees general training and development that is viewed as a cost;
  • fail to equip their people to win new business, create new offerings or build customer relationships;
  • are complacent and set in their ways; they are reluctant to think, question and learn;
  • confuse the roles of owner-shareholder, manager and director;
  • fail to distinguish between operational matters and strategic issues;
  • become typecast and locked into certain roles; they tend to end up as commodity suppliers.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact http://www.asifjmir.com