A crisis reveals a leader’s values and measures his trustworthiness. Effective leaders remember this truth as they work to create followers, not just from their close-in base (e.g., the executives you brought into the company or, in the case of politics, your base) but also the mass middle. The mass middle enhances and moves the leader’s proposed solutions forward without the kind of push back that stops needed change efforts dead in their tracks. People only follow leaders they trust. It’s why leaders must be honest about a crisis. Manufactured crises take leaders nowhere, fast. In meeting with his Lincoln car dealership owners, Ford CEO Alan Mulally announced that the Lincoln brand was dying and half of their dealerships must close. The dealers believed and cheered him. Why? Prior to the summit meeting, Mulally had sold valuable Ford assets and enacted radical R&D…
In a global economy, local business models thrive.
Even as companies become increasingly global, a reverse trend is happening that is worth paying attention to. In an intriguing feature story in Madison, Wisconsin’s alternative newspaper, The Isthmus, journalist Phil Busse argues that Madison is at the forefront of a revolutionary approach to agriculture – Slow Money, an offshoot of the local food movement, that holds the potential to disrupt the food industry. Revolutionary suggests something outside normal business. Actually, it’s business at its best. Slow Money is an innovative business model ecosystem for building local employment, reducing carbon footprints and enhancing the nutritional value of locally available food. Back to the story – A small group of Southeastern Wisconsin agricultural innovators are seeking to build a more robust growing and food-processing infrastructure. The problem they aim to solve is the fact that the average American meal is estimated to travel 1500…
Three business model lessons that Walmart forgot
Love Wal-Mart Stores, Inc. or hate it, you have to admire the consistent business model strategy its leaders followed to emerge as the world’s #1 retailer. They dramatically improved distribution productivity – in fact, supply chain as a revered specialty arrived with Walmart, as did a measurable bump-up in US productivity due to Walmart’s efficiency. They then leveraged growing power over its suppliers to fulfill Walmart’s compelling value promise – “everyday lowest price.” It took decades for competitors to figure out how to stop the Fortune 500 company’s march. Did leadership hubris then lead to Walmart Stores, Inc.’s weak post-recession performance? Walmart stores open at least one year lost .75% revenue each quarter over the past year while Target, Costco and Family Dollar saw same-store revenue climb. Walmart’s decline is about more than post-recession consumers shopping-up. The American consumer is still highly price-sensitive,…
Five Indicators of Broken Industry Business Models
How do you know when an industry is broken and radical change is undoubtedly on its way? The question is an important one for established and start-up companies. Industry transformations offer rich opportunities and devastating risks. Take the case of college education. I’ve seen enormous progress in my daughter’s writing and critical thinking skills since her arrival at Bates College in Maine where she is a Junior. Yes, the tuition payment (without any scholarship or financial aid) is very high, but I see significant value in the exchange, based on the college papers Lauren has shared and conversations about issues at the dining room table. Apparently Lauren is the exception to the rule among college students, according to a recently released book, Academically Adrift: Limited Learning on College Campuses by Richard Arum and Jospia Roksa. “According to their analysis of more than 2,300…