Monday, June 9, 2008

"Season of Change," Carly Fiorina

Fiorina based her talk on the idea that industries and individual businesses within those markets go through "seasons of change" – that is, significant shifts in industry dynamics the scope and scale of which may not be immediately evident. Those who miss the nuanced indicators of change may be left in the lurch. She used this platform to describe how well she was able to identify the season of change facing Hewlett-Packard (for instance, getting HP into digital photography) while, by comparison, Kodak was too late to notice the changing season and is now relegated to a second tier player.
At a current macro level, Fiorina pointed to six primary points of change which are being fueled by the relentless pace of technological innovation. The most powerful factors in her view are these:
  • Global – business & technology are increasingly global and interconnected; think Skype
  • Digital – what was analog is now or will soon be digitized; think
  • Mobile – un-tethered computing & communications is the new wave; think iPhone
  • Personal – content the way you want it; think iPod and iTunes
  • Transparent – Combine Sarbannes-Oxley and the Internet and there’s no more hiding…anywhere; think WIKI leaks in which people are encouraged to publicly "rat out" lousy companies and their revealing documents
  • Empowered – Power is in your hands…not "the Man’s." It has flowed and continues to flow from corporations to individuals; think tools like YouTube (make your own commercial) and blogs (make your own publication); think The Drudge Report.

Indicators of change
At a company or firm level, in order to stay competitive, Fiorina stressed, leaders not only need to recognize seasons of business change as they occur but also capture and capitalize on such change. Laggards, she implied, look at lagging indicators so they miss seasonal shifts. Leaders, in Fiorina’s view, should look to leading indicators of change. Lagging indicators are historical documents such as backward-looking financial statements. Unfortunately by the time we see historic indicators such as annual Profit and Loss Statements and Balance Sheets, it might be too late. Instead, Fiorina proposes that business leaders focus on the following indicators:

  • Customer satisfaction – is it trending upwards or down and what’s behind it?
  • Ethics – what signs are there of character strength or flaws in leadership?
  • Rate of innovation - what’s the rate of patent production or new product introductions?
  • Diversity – are you accommodating more & better talent from differing backgrounds?

Leading Change
"Change is like heaven," Fiorina quipped, "Everyone wants to go there but no one wants to die." Employees are afraid of change from the status quo however undertaking change and risk are the only ways to grow a business. She described the difference, in her view, between managers and leaders:

  • Managers play the game as outlined. Leaders redefine the game.
  • Leaders help unlock potential, seize possibilities and build confidence.
  • Managers do the work to the best of their abilities without leaving challenging the outlined parameters.
  • Leaders change the competitive landscape

When undertaking change:

  • be clear and open
  • put processes in place
  • measure success including the effectiveness of collaborative processes
  • teach your upcoming management team the skills of collaboration

Good ideas come from employees, customer and competitors. Make sure you listen and take notes. Do not focus on the failures but on the lessons that come out as a result. Implement a "perfect enough" rule – look at the big picture.

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