Three guesses who came up with that little gem
- Sprint customers
- The American people about GM
- Time magazine readers
Actually it’s a quote from Woody Allen from the movie Annie Hall but it could have come from any of the above – or indeed from millions of customers describing thousands of companies. Companies that have stopped moving forward. That have no energy, no vision, direction or purpose beyond making money. They might provide products and services, but they actually serve themselves – or at least they serve their C-Suite and maybe their institutional shareholders. They’re certainly not in the business of building thriving relationships with their customers.
Sadly, running on self-serve auto-pilot appears to be the default strategy for the vast majority of companies in corporate America. And guess what? It’s killing them.
Who’s to blame?
I blame Wall Street. Not for huge bonuses, not for busted banks and brokerages. I hold them accountable for something much worse – destroying American competitiveness and innovation.
For the past 10 years or so the Street has demanded that companies hire CEOs who have what’s known as ‘executional competence’. A safe pair of hands. Technocrats in other words – the kinds of people who are more comfortable parsing a balance sheet than rallying employees and customers around a mission or a cause.
These green eye-shade CEOs have been successful delivering increased operational efficiency – squeezing every ounce of time and cost out of corporate production, distribution and supply chains. And for a decade that was the best way to grow margins and keep the Street happy.
Partly this was an on-going reaction, I think, to the gung-ho leadership style of the 90’s as exemplified by Jack Welch at GE and more recently Carly Fiorina at Hewlett Packard. High wattage corporate leaders are mostly distrusted, and not entirely without reason.
But our current roster of faceless, MBA’d-up, over-cautious, unimaginative bosses are now fundamentally failing to deliver the growth on which the Street feeds and capitalism thrives. Why? Because they’re expert at things that have ceased to provide competitive differentiation – nationally and, crucially, internationally.
The problem is that every company has been busy doing the same things. The result is that sector after sector has essentially been commoditized. Brands mean little or nothing because everything’s the same.
For the consumer of course this is all fine and dandy – in the short term. It means products are cheaper while choice, quality and speed to market have hugely improved. In the longer term, however, and for the companies themselves, it’s a slow motion train wreck in the making.
Why? Because the technocrats don’t know how to lead. And companies that fail to lead, innovate, be customer-centric and dynamic are at massive risk from companies that do. And right now, increasing numbers of the latter are Indian or Chinese. This is such an obvious point that it’s almost incredible that more companies (or the public, or the government) don’t seem to get it.
Set our talented people free!
Many extremely bright people work for hide-bound American corporations. They understand the problems and they probably have brilliant solutions (that they share with their co-workers over a beer after work or their husbands at the kitchen table).
Trouble is companies are made or broken by the people that run them, not the people that work there. The vast majority of employees are simply not empowered to change things – in fact they’re often actively discouraged from doing so. If the CEO doesn’t support, direct and incentivize a culture of ideas, innovation, collaboration and disruption, that culture won’t exist – however bright and capable the talent on hand.
Of course there are exceptions. But they’re so obvious to us for the very reason that they’re too few and far between. What we need is a new generation of hard-charging innovators in the corner office – leaders who inspire employees, customers and all the other stakeholders who care about our future as a successful, competitive, growing nation.