Craig Schiefelbein, CEO/owner of Wisconsin-headquartered Paragon Development Systems, Inc. (PDS) exemplifies strategic leadership. Is it any wonder then that his Information Technology Solutions (IT) company has grown in twenty-two of the last twenty-four years and strategically partners with healthcare IT departments across the Midwest? Schiefelbein’s strategic leadership rests first and foremost in his willingness to change his company’s business model. “We’ve changed our business model seven times. Every time I’d think we had it all figured out only to discover we’d be out of business if we didn’t change. The challenge is in running the business while also rerouting it, and doing it before the changes become mandatory.” PDS started humbly in 1986 as the computer component wholesaler, Memory and More. Today PDS architects, supplies, implements and manages entire IT hardware infrastructures. Its business model involves aligning PDS’s unique blend of leadership, services,…
Business model evolution is job #1 in today’s copycat economy
Madison-based TomoTherapy, a health care technology innovator, has sold out to another niche radiology technology company, California-based Accuray. The combined company will be better able to afford the direct sales and service forces and R&D investments critical to success when selling against radiology leaders like General Electric (GE), Varian Medical Systems and Siemens. Accuray’s superior financial performance made it the acquirer. Many in the region had hoped when TomoTherapy went public at a high valuation that it would join Epic and Promega as mid-sized companies headquartered in our region anchoring Madison’s biotech community. Had TomoTherapy evolved its business model strategy, it just might have succeeded. Instead, a plummeting then flat stock price led to the sale and, with it, an anticipated loss of high paying management jobs from Madison. TomoTherapy invented a break-through niche radiology product that enabled higher doses of radiation to…
Business model strategy anchored in abundance
Happy Thanksgiving. I love the Thanksgiving holiday. Each year the celebration reminds me that practicing gratitude and believing in abundance create a more abundant life. These two concepts are at the heart of great leadership, an opportunity mindset, and building a better business model. Gratitude (versus being unappreciative) and a belief in abundance (versus scarcity) are interdependent in my life. Reflecting on what I feel grateful for changes my lens on life. I see even more things to feel thankful for, making my world feel more abundant. When I fall into the trap of being too busy for my daily practice, my frustration level starts to rise and the world can feel far more limiting. Gratitude is at the heart of great leadership. Grateful leaders are far more aware of how others are trying to advance their organization’s success. As a result, they…
Does Carly Fiorina’s HP legacy foreshadow her Senate leadership?
It seems natural to judge a political candidate by her previous work performance, which is precisely why my eyes are on the California Senate race. Former HP CEO Carley Fiorina is challenging the incumbent democrat, US Senator Barbara Boxer, to represent the financially strapped state. While the two women trade public policy barbs, HP shareholders are debating whether to dump HP stock. From my perspective, the seeds for HP’s current problems were planted from 1999-2005 during Fiorina’s tenure as CEO of HP. (Disclosure: I vote in Wisconsin. I am an independent and have voted for both parties.) Before her forced exit, Fiorina changed HP in two ways that each demanded significant internal focus. First, she reorganized the company, a reorganization that Mark Hurd who followed Fiorina spent time dismantling, as it diffused responsibility for organic growth and delayed decisions. (Hurd’s reorganization cut out…
Honesty Advances Business Model Innovation
Milwaukee Brewers owner Mark Attanasio demonstrates one of the most important qualities of a strategic leader – an honest assessment of the status quo. “We know we’ve got a problem, which is starting pitching. We as an organization need to face that reality and address it, as opposed to shrink from it or excuse it. Our offense is so good, if we were just average in pitching, we’d be a contender. We’ve had two seasons now of having a top offense and extremely poor pitching.” Attanasio then admits there is no one coming up through the ranks to solve the problem, suggesting a trade may be necessary. Imagine if someone somewhere in the J&J leadership team spoke up, “Our drive for earnings is leading plant managers to compromise quality to meet earnings expectations. If we don’t address our quality issues, I’m calling the…
Reflections from Austria
I am spending two weeks, mostly in Austria, exploring the Eastern Alps and biking along the Donau (Danube) River, before seeing Wein (Vienna) and Prague in The Czech Republic. Austria is exquisite. The majestic views here make Wisconsin’s landscapes look like a table model for the real thing. (And I love Wisconsin’s land.) In Saltzburg, an imposing castle stands atop the city. (The photo is an IPhone shot I took in Salzburg.) Indeed in most significant Austrian cities there are castles or grand churches hundreds of years old, each so stately it defines the character of the community. I can’t help but wonder how the imposing presence of the past impacts those who live in Austria today. Unlike the US which grew steadily, the Austrian-Hungarian empire significantly shrunk following World Wars. How does this affect the cultural norms passed from generation to generation?…
When Is Bigger Better in Business Model Innovation?
I spent the weekend in Scotland, where one cannot escape RBS’s logo, RBS standing for The Royal Bank of Scotland. Its brand imagery stands out exiting the airplane, passing city billboards, and reading or listening to local media. Today, the people of Scotland own close to 70 % of RBS because the former (duly fired) CEO and his board believed that bigger is better. With a small domestic market of 5.2 million residents (about the size of Minnesota) and strong English competitors, RBS acquired what turned out to be a poorly run Dutch bank in order to grow. Thankfully, a strong domestic position will keep the bank in business; but it will be a long time before Scottish taxpayers are repaid for keeping RBS afloat. Small is beautiful. Consider PNC, the regional bank headquartered in my hometown of Pittsburgh compared to Bank of…
Leading Business Model Innovation
My CEO client sent the following e-mail to his leadership team last week to prepare for this week’s retreat that I’ll lead. His e-mail is an example of terrific business model innovation leadership. We will make mistakes as we go through this planning –this week and beyond. I’m more concerned about not making mistakes. If we don’t make mistakes, it means we are taking no risks, we are content with the status quo and are defaulting to making a few minor changes here and there. We can’t do that. The way I see it, that’s far riskier than making decisions and finding out that our best plans need to be adapted. Not making mistakes means choosing film over digital, slide rules over calculators, Northern Lights [bet you never heard of that] over Google. As we think about what we plan this week and…
Business Model Strategy Execution Rests in the Details
“You’ll find the style you want at the optometrist store on State Street,” my most stylish girlfriend advised. Sure enough, I walked into rack after rack of brands and styles upon entering the shop. While the amount of choice was reassuring at first glance – surely there is a look here for me – I soon felt frustrated. Already daunted by the prospects of wearing glasses full time, selecting “my best” style felt as confusing and full of potential regrets as selecting a college felt when I was 17. “Can you advise me on a good style for my facial shape?” I asked the elderly clerk ten minutes into my trying styles on. “No. You’re on your own. But I can access the most expensive brands in the locked cases if you want.” Half an hour later, I left. The store’s “best choice”…
Without Appeal, You’ll Be Bypassed in the Slow 2010 Economy
From Oslo I attended an economic briefing from the Chief Economist of a major European bank yesterday. It was fascinating to hear the financial crisis and recession described from the perspective of the OECD, where the recession has been much worse than in North America. For example, Germany’s GDP fell 6.5% from its peak, with its manufacturing down 25% and exports down 26%. And despite massive European fiscal and monetary stimulus, his expectation for 2010 and 2011 is slow OECD growth, as is mine for the US economy. His most insightful comment was a quote from a UK central banker, “It’s about the level, stupid,” an analogy to Bill Clinton’s 1990’s campaign comment that helped him knock George Bush out of the U.S. presidency. The gap between actual economic performance and full-capacity economic performance is so great across the industrial world that the…