The pandemic is forcing many companies to cut expenses. Many business crises require tightening the belt. But if you must cut costs, do so in the context of specific aims and criteria beyond helping the bottom line. Otherwise, you’ve reduced your future competitiveness. Case in point. Kraft. Kraft split itself into two businesses in 2012, one an international snack and confection foods company (Mondelēz International, Inc.) and the other (retaining the Kraft brand) the North American grocery item business, consisting of cheese, Oscar Mayer deli meats, etc. In 2015, Heinz acquired Kraft. Kraft Heinz’s share value has dropped by more than half since the merger. One would think that the synergies between the two grocery-channel based businesses would lead to rising value. What happened? The answer is simple. Kraft Heinz cut costs, then cut costs, then cut costs yet again in an attempt…
Changing times demand new questions and changing strategies
An environmental assessment is a critical part of any strategic planning process. Its purpose is to identify changes around your business that pose risks or opportunities for the business in light of its market position. The assessment follows the identification of Strengths and Weaknesses, creating the well-known SWOT Table. Too often, leadership teams forget the critical next step to the SWOT assessment – identifying the core strategic issues and questions facing the business. Richard Rumelt, a renowned strategist, argues in Good Strategy/Bad Strategy that “A strategy is a way through a difficulty, an approach to overcoming an obstacle, a response to a challenge” and a fresh way to build new competitive strength. Without identifying the strategic issues and challenges/opportunities, you bypass the thinking that can lead to an overarching strategy – a coherence of interdependent moves that together build success. For Walmart, the…
We need leadership, not more hubris.
We have many words for leadership, a trait desperately needed to surface solutions to today’s multiple crises: the pandemic, climate change, economic recession, inequality, and social unrest. We also need leadership to rally people around whatever solutions eventually arise. The opposite of leadership, to me, is hubris, and we are observing way too much of it during today’s crises. Hubris is an arrogance, a bold audacity, an overblown impression of one’s own importance. Hubris is also the opposite of respectfulness, which is at the heart of effective leadership. Respectfulness-in-action is challenging another’s behaviors but not making assumptions about the underlying motives. So is seeing the value in every human, from janitor to Board Chair, from the asylum seeker to the esteemed citizen, and acting in support of each person’s worth. Successful leaders tell the truth, as the respect of others demands we are…