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Don’t miss my other WW: bad corporate culture

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By Wes Ball, author of The Alpha Factor a revolutionary new look at what really creates market dominance and self-sustaining success. Read all of Wes’ posts here.

If youre alive, youve probably been watching the drama being played out at Starbucks. Hundreds of stores are slated to close across the country, and customers ranging from local neighbors to business owners to the mayors of cities are calling to lobby for their local store.

Starbucks management claim that they over expanded, and that has caught up with them as they experience the same economic downturn that is haunting everyone else. That is certainly the case, but there is something even more significant being displayed here: the power of an Alpha company.

Alpha companies are the leaders of customer expectations in a product or service category. They define what it means to be good. Everyone else has to either emulate or overcome them to establish themselves as acceptable. They accomplish that by driving emotional needs fulfillment ever higher to self-satisfaction and significance.

One of the benefits of making yourself this kind of company is that you have a lot more margin for error when you really blow it.

Not since Coca-Cola nearly immolated itself with New Coke in the 1980s has there been such a customer response as we are seeing for Starbucks. Customers saved Coca-Cola from disaster. They are trying to help Starbucks in the same way. What a testimony for leadership over management.

Cost-side management has really been the cause of the problem. What was forgotten was that cost-side management could never have created this kind of customer response. Only revenue-side management (which is the focus of leadership vs. management) could do this.

Luckily, Starbucks has been given a gift by its customers. I hope that it recognizes the true cause of its decline is a cost-side focus and uses this time to re-focus upon the customer experience that defined new experiential expectations for a coffee shop.

How will you react when your local Starbucks closes?

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Jeff Scott is the Library Director for the City of Casa Grande Public Library in Casa Grande, Arizona, and as president of the Pinal County Library Federation, a consortium of 13 public libraries, he helps guide a budget of over $3 million for the City and County Libraries. A technology advocate in a rural area, he developed the first free wireless hotspot in Pinal County and experiments with e-books and technology for the library users. You can find some of his writing at Gather No Dust, and at MCLC Tech Talk.

When we talk about leadership, we often speak of being innovative, having a vision. When we talk about management, we talk about leading teams and change management. Too often, leaders and managers are afraid to make changes or have a firm vision. There is a reason behind that, they have common sense. When you place your hand on the hot stove you get burned. In the future, you know not to do it.

Those who are innovative know that they are going to get burned, but they do it anyway.

I remember watching NFL films about the kickoff teams. These teams run downfield as fast as they can hurling themselves against a virtual brick wall of people. It is the equivalent of getting in a car accident every kick-off. One of the players was asked, Dont you get scared of doing that every time? His reply, Of course I am scared, but I do it anyway. Courage is being afraid, but going anyway.

I learned a lot from that when I became a manager. I know there are projects that are going to be very beneficial, but after a certain number of changes and innovations, you begin to learn who is going to oppose you and by how much. What happens over time is that you avoid conflict in those areas. You are too afraid to make the change because you dont want to deal with the consequences. This is bad. This is probably the number one reason things dont get done in an organization.

How do avoid this trap? This is what is commonly referred to as mitigating risk. We know what is going to happen when we make this decision. You will anger some people, please others and the end result may be positive or negative based on perspective. Knowing ahead of time which burners will launch on the stove will lead to avoid being burned. Attempting to get ahead of the curve and realize the hot points will save your bacon. It will also allow space for failure.

When you make a mistake, everyone will know how and why and what you learned to avoid it again.

How do you handle your hot stoves?

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Today’s investment bankers are known mostly for their greed and excess (with a few exceptions), but has the profession always been that way?

Meet James Truslow Adams, whose take on life is vastly different.

“There are obviously two educations. One should teach us how to make a living and the other how to live.”

“The greatest discovery of my generation is that man can alter his life simply by altering his attitude of mind.”

“The great use of life is to spend it on something that will outlast it.”

What unexpected source do you like?

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A week ago I brought IBM’s The Enterprise of the Future to your attention and said I’d be discussing it in the future, but there’s so much material in the three studies that I decided to make it a Saturday staple for awhile.

Additionally, if you or someone you know, would like to provide a guest post based on or related to any of the three IBM studies (CEO, CFO and HR) I would love to have them.

In the Global CEO Study five critical traits needed for success were identified through conversations with more than 1000 CEOs around the world.

The first is that to be a powerhouse, no matter your size, you must be “hungry for change,” not scared, tolerant or even willing, but hungry for it.

You must see “change within the organization as a permanent state” and build your culture accordingly.

According to Masao Yamazaki, President and CEO, West Japan Railway Company, “The key to successful transformation is changing our mind-set…it is easy to be complacent…company culture must have a built-in change mechanism.”

While corporate culture is the reason that “employees are comfortable with unpredictability. In an environment in which products, markets, operations and business models are always in flux, values and goals provide alignment and cohesion,” it’s MAP (mindset, attitude, philosophy) that provides the underpinnings for it all.

And it’s not just organizational change that’s moving so quickly, but positions, including CXOs, are, too.

In an insightful article in MIS Asia, Chris Potts says, “In less than five years’ time, the CIO role, according to CIOs themselves, is destined to become either an executive leader of business change or absorbed into another role,” and walks you through the reasoning and the changes that need to happen.

“There is a pressing need for integrated leadership of business and technology change. With enterprise architecture and investment portfolio management, CIOs have the two strategic tools onto which that leadership depends. The CIO’s cultural challenge is to explain that these tools are primarily about people and collaboration, not technology.”

Change requires talent and a paucity of talent was rated as the greatest barrier to growth, more so than even regulatory and budgetary considerations.

Moreover, the kind of talent needed has changed radically from the descriptions so often heard as has the ways to remunerate them. Now, it’s “people who question assumptions and suggest radical, and what some might initially consider impractical, alternatives” with the potential for “differentiated rewards, such as a stake in the business they helped create.”

Managing this kind of talent takes more than good people skills or charisma, it requires MAP that’s secure and willing to hire people smarter than itself, share a vision of the needed results, turn them loose and trust them to accomplish it.

Do you know many managers with this kind of MAP?

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