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Archive for the ‘Silent Problems’ Category

WalMart & Sears - kindred cousins?

Monday, May 2nd, 2011

When I was growing up, Sears was the place to go. They had the gadgets, the appliances, tools and electronics, and so much more. It was a fun place to go as a young boy. And for much of the time in their hey day, they were the low cost leader in the marketplace. But as we all know, Sears has been a shrinking brand of diminishing stature for several decades now. Sears is no longer the place to go or be seen. Sears is simply one of those iconic retail brands that has lost its way and and its future is uncertain.

Today, I’m thinking WalMart is on a similar path towards irrelevance as Sears started to go down some 20 years ago. And I’m thinking that 20 years from now, WalMart could very easily be a marginal brand. Here are a few of the reasons that could lead to WalMart’s demise.

  1. WalMart Likes To Fight: WalMart is a fighter. It fights with their suppliers to constantly lower their prices. It fights with their employees at the local, regional and national level (for instance the gender class action lawsuit now in front of the Supreme Court). It fights with munincipalities to gain access to their marketplace. And indirectly, it fights with its customers by being understaffed, their employees undertrained and less than enthusiastic (its simply a job), and their shelves at times, understocked. From my perspective, fighting and dissatisfaction are directly linked.
  2. WalMart Stores Are Tired: WalMart stores simply weren’t designed to provide an upbeat customer experience for most consumers (which is in sharp contrast to their #1 competitor - Target). Now, many stores are especially feeling tired and worn, which simply adds to an already weak customer experience.
  3. WalMart Suppliers Play the Game:  Over the years, suppliers to WalMart have figured out how to play their game. Today, WalMart needs their suppliers as much as their suppliers need WalMart. Ten years ago this was not the case.
  4. WalMart Feeling The Squeeze: WalMart is being squeezed by the likes of DollarTree on the bottom end of the market (small stores with really low prices), warehouse stores like Costco and upscale stores with good pricing like Target. In essence, the number of individuals feeling compelled to shop at WalMart is declining.
  5. WalMart’s Sourcing Strategy: WalMart led the maretplace to China, even setting up their own trading office early on. It’s been reported that suppliers were told that if they didn’t source from China, they would no longer be a supplier in the future. With the increasing valuation of the yuan, higher labor costs, etc. WalMart’s China strategy is providing decreasing returns. 
  6. Mother WalMart Doesn’t Know What’s Really Going On: WalMart in their gender class action suit currently in front of the Supreme Court essentially pleads innocense, because they didn’t know what was going on at the local level. This might sound like a smart defense, but its also a terrible way to run a business. Think about it. If corporate doesn’t know what’s going on a the local level, does it really know what’s going on?  Scary?

During the go-go days, WalMart was the place to shop. Stores were packed with customers and shelves filled to the brim with value-priced merchandise. Well the times have changed, and WalMart stores open a year or more have experienced reduced revenue for seven straight quarters. Suddenly, WalMart is desperately trying to figure out how to get their momentum back. They have a plan, although I suggest it’s going to be extremely hard. The reason being, a growing legion of shoppers are “anti WalMart”  Plus, many WalMart stores are tired, their offerings unattractive, their employees unmotivated, their value proposition weak and the competition is getting better. This is not a combination that will enable a swift and exciting turnaround. Yes, WalMart is filled with many silent problems that hold it back from achieving its glory days in the U.S. at least.

What do think? Will WalMart be able to regain their growth oriented momentum?

Gary Busey & The Apprentice

Tuesday, April 19th, 2011

Reality TV has a lot to be desired. It tends to be heavy on drama and short on impact. But this week’s (April 17) edition of The Apprentice was different. There was actually some great take away value, at least to those who are stewards of Organizational and Team Dynamics. Plus, it was entertaining.

Let me back up a second. From the beginning of this series of The Apprentice, actor Gary Busey has always been portrayed as a wild card of sorts. Someone that at times was brilliant, and at other times, totally dysfunctional and a major distraction. He appeared on camera with a frumpy hairstyle and quirky demeanor. Surprisingly in the early stages of this series, the team repeatedly protected Gary from his own shortcomings. They would work around him when necessary. Coach him when it was necessary. Direct him when it was required. The team went to great lengths to keep Gary on target so they could complete the task at hand. Then when it came to the boardroom, the team elevated him as someone that was a bit quirky, but brilliant. Consequently, each week Gary returned unscathed, and his presence and stature, elevated.

In the April 10th show everything started to change. First, some of the veneer that protected Gary started to wear thin and the team started to expose Gary for his lack of professionalism. During this show, the men’s team lost and Donald Trump met in the boardroom with Mark McGrath and Gary Busey. One was going to get fired. The Chicago Tribune captured the outcome.

We’re sure that when Gary Busey walks back into the TV room after surviving Sunday’s (April 10) boardroom on “The Celebrity Apprentice,” the men’s team will have a collective stroke. Not only have they lost pop-rocker Mark McGrath, one of their best players, but now they still have who they perceive to be their worst player still around.

On the April 17th show, survivor Gary Busey was put up on the pedestal so to speak. He was assigned the position of project manager. A position where individuals commonly are fired if they lose the task. This is how buddytv.com described the evening.

Last night on Celebrity Apprentice, when we weren’t watching the women do impressions of La Toya Jackson, all eyes (and brains) were on Gary Busey, as he led the men’s team to chaotic, embarrassing failure after their Omaha Steaks presentation failed to sizzle. His failure to manage time, manage the menu and manage his team mates, who begged anyone who’d listen to get them away from Gary, eventually led The Donald to do what he couldn’t do last week, and he fired The Busey. And so the crazy quotes were snatched from our Sunday nights.

At the top of the episode, country star John Rich told Busey he’d almost figured him out: “You’re either crazy, or you’re a saboteur. And I don’t think you’re actually crazy.” Gary responded by saying he was neither, but then went on to tell the camera that he’d been intentionally hiding his “focus” from Team Backbone, that he was “subtle and mysterious,” and that was all “part of [his] art.” Then he hissed at the camera and called it his “impression” of a cat, effectively undermining any credibility he’d just established.

And that’s pretty much how the whole two hours went for project manager Gary and his exasperated teammates. When doling out assignments, he gave the cooking job to Meat Loaf without asking first if Meat Loaf could cook. (To be fair, why are you named Meat Loaf if you can’t?) Gary took over planning the “variety pack” and writing the narratives to go along with their original Omaha Steak meals, which were predictably nonsensical, drawn out and bizarre, especially his Father’s Day yarn about buying a special kite for Dad. John Rich and Lil Jon were left with little to do but get a contact high off of Gary’s potent absurdity, and ended up giggling uncontrollably for most of the day. That, or they were just so frustrated by his random, rambling antics that the only thing they could do to not kill Gary was to laugh.

 

Last night’s show of The Apprentice quite simply was a textbook case about how team dynamics can unfold in real life.

  1. The team embraced and protected a dysfunctional team member. By doing so, they were able to have access to his intermittant brilliance, but also remained exposed to their dysfunctional characteristics.
  2. Over time, managing the dysfunctional team member becomes more-and-more difficult. This sunneeded stress, which ultimately negatively impacts the performance of the team.
  3. A high performing team member leaves.  The net result, an already stressful situation becomes toxic.
  4. Eventually the team turns on the dysfunctional team member. They take steps to make certain the toxic member becomes an emperor with no clothes.
  5. The functional team members become unwilling to work with the toxic member, thereby exposing the isolated member to elements of abandonment.
  6. The toxic team member ultimately gets fired.

By  protecting Gary in the early episodes, Gary became a Silent Problem as detailed in my book Without Warning. Donald Trump initially saw Gary Busey as a high performing team member - a little different, yet brilliant. By the time Gary was exposed on April 10, Gary had already earned a “get out of jail card” from Donald, which was immediately played. However when April 17th came around, the dynamics had changed. Mark Rich, Lil Jon and Meatloaf were vehemently upset that their friend Mark McGrath was fired and Gary Busey was saved. And they were more than willing to let Gary Busey die by his own sword. Yes, it was a night of team dynamics and how individuals can get pushed off the team.

How many individuals do you have in your organization with similar attributes and behavorial traits to Gary Busey? How do you vote them off the team, or do they stay?

 

Tokyo Power’s Big Silent Problem

Wednesday, April 13th, 2011

Attached to every disaster lies a calamity of sorts it seems. It’s often a place where fact too often feels as if it were fiction. It’s a place where adversity faces reality. It’s a place where shady and dangerous acts of defiance can cascade into a cataclysmic disaster. And when the plot begins to unfold and thicken, a long trail of events begins to emerge.  They often reveal: falsified documents, the manipulation of relationships, evidence that is covered up and often tainted, and a place where whistleblowers are often silenced. Yes, they all fall under what I refer to as Silent Problems in my book Without Warning (silent problems are problems that have been avoided, neglected or intentionally silenced).

A long list of companies and individuals that perpetuate this often deadly disease exist throughout the world. We can easily turn our attention  towards the likes of Enron, Lehman Brothers, WorldComm and numerous others. Today however, a silent problem of immense proportion is being revealed in Japan. It’s the story of  Tokyo Electric and Power (TEPCO), the operators of the Fukushima nuclear power plants that have succumbed to the wrath of mother nature and the revealing of a host of silent problems. And the silent problems at TEPCO not only preceeded the disaster at Fukushima, its history foretells its vulnerability to such an event. Let’s take a look at how vulnerable TEPCO was by looking into its history.

Bill Pesak from Bloomberg writes: Once one of Japan’s proudest names, Tepco is now seen by some in the same toxic class as Enron Corp. or Lehman Brothers Holdings Inc. Each day brings new disclosures about how Tepco doctored safety reports and underestimated risks all without holding responsible the company directors who are still collecting their salaries, never mind keeping their jobs.

Financial Times, September 2002: The admission last week by the world`s largest private electric utility (TEPCO) that it had falsified safety records at nuclear power plants has shaken the Japanese public`s trust in the industry and is likely to make a dent in the company`s finances…  Tepco this week announced it would shut five reactors that are still operating despite cracks in shrouds that surround the reactor core. The move follows its admission that there were 29 cases of data falsification at three nuclear plants in the 1980s and 1990s. The closures came despite assurances from the Nuclear and Industrial Safety Agency that the reactors were safe. Tepco`s voluntarily closure of the reactors and president Nobuya Minami`s swift resignation after the falsified records were made public are an attempt to limit damage to the company`s image. But the doctored safety reports have rekindled fears about lax safety standards in Japan`s nuclear industry, three years after a fatal accident at a nuclear reprocessing plant in Tokaimura, a small town north-east of Tokyo.

From Nuclear News: Power company failed to maintain safety checks, Kimiko De Freytas-Tamura SMH March 21, 2011 OSAKA: Days before Japan plunged into an atomic crisis after a giant earthquake and tsunami knocked out power at the ageing Fukushima nuclear plant, its operator had admitted faking repair records. The revelation raises more questions about the scandal-tainted past of the Tokyo Electric Power Company (Tepco) and the government’s perceived soft regulation of the industry. The operator of the Fukushima No. 1 plant submitted a report to the country’s nuclear watchdog 10 days before the quake hit on March 11, admitting it had failed to inspect 33 pieces of equipment in its six reactors. A power board distributing electricity to a reactor’s temperature control valves was not examined for 11 years, and inspectors faked records, pretending to make thorough inspections when in fact they were only cursory, Tepco said. It also said that inspections, which are voluntary, did not cover other devices related to cooling systems, including water pump motors and diesel generators….

And for a historical perspective of TEPCO as a companyand its tainted past. Japan’s TEPCO: a history of nuclear disaster cover-ups: The Tokyo Electric Power Company (TEPCO) is the conglomerate at the centre of Japan’s nuclear radiation emergency at Fukushima. Its operations over the past several decades epitomise the government-backed pursuit of corporate profit, at the direct expense of lives, health and safety. A nuclear safety agency official who declined to be named said: ”We can’t say that the lapses listed in the [February 28] report did not have an influence on the chain of events leading to this crisis……

 TEPCO is the fourth largest power company in the world, and the biggest in Asia, operating 17 nuclear reactors and supplying one-third of Japan’s electricity. It has a long, documented history of serious safety breaches, systemic cover-ups of potentially fatal disasters, persecution of whistleblowers, suppression of popular opposition and use of its economic and advertising clout to silence criticism.

Among the company’s record of more than 200 proven falsifications of safety inspection reports are several relating to the stricken Fukushima Daiichi facility itself. In 2002, TEPCO admitted to falsifying reports about cracks that had been detected in core shrouds at reactors number 1, 2, 3, 4 and 5, as far back as 1993.

As the historical perspective illustrates, the number of silent problems inside TEPCO is huge. In fact, cultural underpinnings that embrace and foster silent problems likely exists. And this is a major problem facing TEPCO looking into the future. One can assume the future of TEPCO does not look good. Yes, TEPCO may be silenced by its own silent problems.

The Ability to Hide

Tuesday, October 19th, 2010

Alvin Toffler, author of Future Shock and The Third Wave just released a paper titled, 40 for the next 40, A sampling of the drivers of change that will shape our world between now and 2050. As expected from a futuristic thinker, Toffler provides a plethora of ideas to think about and ruminate on.

There is one idea that Toffler points out that relates to the phenomenon I refer to as Silent Problems (problems that are being avoided, neglected, going unnoticed or are being intentionally silenced) in my book Without Warning. This idea is:

It will be impossible for organizations to hide improper actions:

Rapidly growing amounts of information, and the proliferation of professional/consumer grade tools for analysis and interpretation, mean previously empowered individuals will now be able to see what organizations are doing, and promote that information to others.

 

Consumer opinion of corporate responsibility practices will influence product/service selection and brand switching.

 

This obviously doesn’t imply that mankind, nor organizations won’t try to hide improper actions. After all, there will always be a Madoff, a Petters, an Enron and others out there preying on the innocent. For some, it is simply their human nature and their predisposition. And this is not to suggest that even with vast computing power; governments will become smarter, thereby becoming more effective in their vigilance in preventing such wrongdoings. It does suggest that a cat and mouse game where wrongdoers will find it necessary to weave an increasingly complex web of deception in an attempt to stay one step ahead of the Feds will continue into infinity. Which by itself; is a knowledge network of sorts.

 

In the end, the empowerment of data changes everything. Yet man must take such data and make decisions, and implement actions. Which makes me ponder, will data overwhelm our ability to make decisions and implement actions?

Responding to a Silent Problem

Friday, August 27th, 2010

The Gulf of Mexico oil spill story has raged on for upwards of 4-months now. It’s been been a story with anger displayed, heartache captured, concerns emitted and consequences discussed. Yes, it has been a long and arduous 4-months. Yet despite the magnitude of this disaster, it can be broken into three parts, These being:

  1. Exploring the great unknown. “What will be the consequences, if any?”
  2. Shutting the beast down. “This thing is bigger than we’ve been told, can it be shut down? If yes, how soon.”
  3. Gathering information to avoid a similar catastrope in the future. “Every disaster reveals consequences from the unknown. Until its been experienced, its difficult to understand all of the unintended consequences of certain actions and procedures.”

As part of the third stage of this story, the investigation is revealing that numerous silent problems were present. For instance, recent stories reveal that a single engineer may bear a huge responsibility in the blowout.  However, this isn’t the story I’m fascinated with at the moment. I’m intrigued with how the environment is and has responded to this ecological disaster - most of it is a huge surprise - most scientists included. This story is titled, the great vanishing oil spill.

Yes, microbes may become the heroes of the Gulf of Mexico oil spill by gobbling up oil more rapidly than anyone expected.

This leads me to a parallel discovery. As I have worked with organizations and helped them work through their silent problems, I’m always surprised how organizations respond from the effects of silent problems.  And once it is solved, the results can be equally surprising and unexpected. At times, organizations remain devastated for months on end. However more often than not, once the silent problem is identified and rectified, a rejuvenation phenomenon often takes place. Unexpectant individuals step up to the plate with previously unknown skills that can be leveraged. New processes and procedures that were unwelcomed, are suddenly adopted. However most important in this equation, people learn how to speak about the unspeakable, and take action. Quite similar to the little oil eating bacteria at the sight of a natural disaster.

Silent Problems & Brand Valuations

Wednesday, July 21st, 2010

Market valuations and silent problems - are they correlated to each other?

24/7 Wall Street recently looked at the 10 Biggest Brand Disasters of 2010. Guess what? There is a close correlation to the exposure of silent problems and the loss of brand valuations. On the list:

1. BP: Need I say more.
2. Dell: This company has exposed numerous silent problems in recent years.
4. Sony: I’ve written about Sony and its silent problems numerous times.
5. Goldman Sachs: What can I say other than they’ve created a culture where silent problems are endemic to the organization.
8. Johnson & Johnson: J&J use to be squeeky clean when it came to their brand, now silent problems are eroding it.
10. Toyota: Toyota’s culture of silencing their problems was exposed in a big way in 2010.

The other companies on the list R.I.M. (Blackberry), Adobe, Nokia and Google. Interestingly, each of these are in the fast moving technology arena where a “what’s hot” and “what’s not” mentality can reside. Yet the 6-companies on the above list have direct ties to silent problems. Makes one wonder when the marketplace will finally look at exposure to silent problems in stock valuations.

Adobe:

Everything Is Illuminated

Thursday, June 3rd, 2010

I watched a neat movie last night, “Everything is Illuminated.”  The story is about Alex, a young American jewish man that goes on a quest to find the woman who saved his grandfather during the Holocaust. If you haven’t seen it, it’s a wonderful story. The quirkiness of the characters make it come to life. It was at the very end that caught my attention though when Alex is reflecting on his journey on his return trip when he reflects,  

I have reflected many times upon our rigid search. It has shown me that everything is illuminated in the light of the past. Alex

When I look into silent problems as far ranging as Madoff, to Toyota, to the financial crisis and countless others, its amazing how everything is eventually illuminated in the light of the past. Or in plain terms - the truth is eventually exposed. And what gets exposed is the numerous warning signs along the way. There was discontent amongst employees. There was a conflict of interest present. There was a bully in the mix that did everything in their power to keep the problem silent. 

I’ve thought of and examined the context of these scenarios many times, and I realize there is a question we should be asking.

How can we illuminate problems in the present - so they can be acted upon?

This is the question we need to pursue, and one I focus on in the book Without Warning and on this blog. Because when we illuminate from the present, we can take action and hopefully avoid or at least mitigate the fallout from silent problems. And more importantly, many of the world’s problems could have been mitigated.

Your thoughts?

The Edge of What’s Legal

Friday, May 21st, 2010

In Minneapolis, businessman Tom Petters was recently convicted of running a $3.5 Billion ponzi scheme. He was a high flyer with a huge presence in the Twin Cities business community. What is interesting about this scheme is that Petters was attempting to pay off all of his debtors by leveraging legitimate businesses such as Sun Country Airlines and Poloroid. But the mountain was simply too high, and then the roof collapsed. One of his key employees turned Petters in and the rest is history. Today in the Pioneer Press, writer John Welbes quotes Hank Shea, a former federal prosecuter and teaches at the University of St Thomas Law School states:

White-collar criminals normally start out with minor transgressions and then progress to more serious crimes. “Don’t be focused on whether you can walk up to the edge” of what is legal.

Yes, the edge of what’s legal is a slippery slope. It’s a finite spot that too many people and businesses explore, only to find themselves unable to pull back from its magnetic force. It’s a spot where some venture in search of a competitive advantage, often with toxic consequences. It’s a spot where many problems become intentionally silenced, creating the long lasting risk of the silent problem phenomenon.

Bottom Line: Be wary of the “edge of what’s legal.” It’s often a trap.

Silent Problems Play By Different Rules

Monday, May 17th, 2010

Have you ever noticed that problems that have been silenced tend to play by a different set of rules? When a problem that is being silenced is exposed, a strategy to keep it silent appears to be standard protocol. A case in point, I’ve discussed the silent problems over at Toyota repeatedly over that past 6-months. Quite honestly, records reveal that Toyota historically has tried to silence problems. This past week another story surfaced. This one out of the Associated Press, it states:

Toyota officials were looking to attack the credibility of witnesses who testified before Congress about sudden acceleration problems in the automaker’s vehicles, according to a report in Washington Post.

The Post says it obtained documents that show Toyota sought to create a public relations campaign based in part on polling that questioned the integrity of two witnesses. Such polls are used by businesses and politicians to test the weaknesses of their opponents.

The Post identifies the witnesses as Sean Kane, a Massachusetts safety consultant, and David Gilbert, an auto technology professor. Each criticized Toyota’s handling of the problem.

In response, Toyota told the Post it never produced advertisements based on the polling.

When I read stories related to silent problems like these, I’m not surprised by what is considered a possible defense/offense. Everything is placed on the table so to speak. Everything is calculated. Risk and opportunity measured. After all, once a problem has been silenced - a change in the game plan cannot occur midstream. Because this would be considered guilt, which carries a high degree of financial risk and exposure.

5-Attaboys Displaces 1-Awe S…

Wednesday, May 12th, 2010

The impact that silent problems (problems that are being avoided, neglected, are going unnoticed or are being intentionally silenced) tend to be profound and damaging. Their impact can affect performance areas ranging frm profitability, to employee engagement & turnover, to customer satisfaction. This morning I came across an interesting article by Bob Sutton that highlights this effect. The article is titled Bad is Stronger than Good - The 5:1 Rule. It states:

“Bad is Stronger Than Good”  is the title of one of my favorite academic articles, which shows that negative information, experiences, and people pack a far bigger wallop than positive ones.  I touched on this theme in The No Asshole Rule and dig into in detail in the forthcoming Good Boss, Bad Boss. But perhaps the most important finding for most of us is the research on  romantic relationships and marriages: unless positive interactions outnumber negative interactions by five to one, odds are that the relationship will fail.  Scary, isn’t it?

Several studies found that when the proportion of negative interactions in a relationship exceeds this “five-to-one rule” divorce rates go way up and marital satisfaction goes way down. The implications for all of us in long-term relationships are both instructive and daunting: If you have a bad interaction with your partner, one (or apparently two, three, or four) positive interactions aren’t enough to repair the damage.  It apparently takes at least five — at least over the long-term. Related studies on workplaces suggest, along similar lines, that bosses and companies will get more bang for the buck if they focus on eliminating the negative rather than accentuating the positive (although the latter is important, the best evidence suggests that more effort and resources should be focused on getting rid of bad people and experiences).

When we leave silent problems to sit and ferment, it takes a lot of good will to neutralize them. And in most instances, we come up short. Yes, the odds are against you. In fact I would suggest that the longer they remain silent, the challenge could easily approach 10, 15 or maybe even 20 attaboys to neutralize an entrenched silent problem. That is a high mountain to climb.

This is simply one more reason why silent problems should be dealt with proactively, not reactively. And conducting a silent problem audit is an effective means to completing the task.

Be the one to see it coming!

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Without Warning - Rondey Johnson

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