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And What About Those Silent Problems in the News

Monday, April 26th, 2010

It’s been a year since my book Without Warning first came off the presses. Since then, the incidences and case study possibilities relating to what I refer to as Silent Problems (problems that are being avoided, neglected, going unnoticed or are being intentionally silenced) seems to be growing exponentially. And the stories I’m referring to are front page news. Maybe that isn’t all that surprising due to the explosive nature of silent problems when they do finally become visible - Without Warning.

Over the past couple of weeks, news items that would fall under the umbrella of being a silent problem are worth noting. Here are just a few of the high profile cases.

  1. Porn at the SEC: One would think that the Federal Governement would have an effective I.T. strategy in place to prevent the viewing of porn while at work or with government owned computer equipment. Well, the SEC proved us wrong and received another black eye for incompetence. The Washington Post states, “Dozens of Securities and Exchange Commission staff members used government computers in the past five years to access and download pornographic images, according to a summary prepared by the agency’s watchdog.”
  2. Goldman Sachs on Winning: Goldman was considered the investment banking firm you could trust. Well, all of that has changed over the past 6-months or so, and its going to get even more complicated as Goldman e-mails show how crash turned into cash.
  3. Ratings Agencies Exposed: I guess we shouldn’t be surprised that the ratings agencies also have some dirty laundry now being exposed. From the Financial Times article, Rating Agencies’ Nixon Moment, “As one Moody’s managing director wrote to his superiors in 2007, the company’s errors, made it look “either incompetent at credit analysis, or like we sold our soul to the devil for revenue, or a little bit of both…” “Jason is looking into some adjustments to his methodology that should be a benefit to your folks,” wrote a Moody’s employee to a Chase banker.The bankers seemed fully aware of the competitive pressures the rating agencies faced - and they knew how to game them.”"E-mail from Moody’s chief risk officer to Raymond McDaniel, CEO, October 2007 - ‘[N]o body gives a straight answer about anything around here . . . how about we come out with new [criteria] or a new stress and actually have clear cut parameters on what the hell we are supposed to do.”

The list could go on including stories about the Catholic Church, Toyota and others. However the storyline is the same. A problem is avoided because it is too costly, potentially too damaging or simply too time consuming to solve. Over time, the problem grosw in size and magnitude, and jumping off the treadmill is too costly. And just like a volcano, when it blows the impact is devastating, extremely disruptive and costly. Such is the case of silent problems in the real world.

Keith Wendell, the new CEO at Harley Davidson puts it in perspective when talking about the tough decisions he had to make at the firm. “There is not one of us who wakes up in the morning and says, ‘Wow, this is another opportunity to ruin someone’s life,’ ” Wandell said. “. . .  But you cannot turn your head and look the other way when there are issues that are going to ruin the company. I wish we could be totally clear about that.”

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Toyota’s Silent Problem Crisis

Saturday, February 6th, 2010

The opening paragraph in the Wall Street Journal captures the essence of Toyota’s problems, but more importantly Toyota’s silent problems. The article A Crisis Made in Japan by Jeff Kingston, director of Asian Studies at Temple University states,

In Japan there is a proverb, “If it stinks, put a lid on it.” Alas, this seems to have been Toyota’s approach to its burgeoning safety crisis, initially denying, minimizing and mitigating the problems involving brakes that don’t brake and accelerators that have a mind of their own. President Akio Toyoda, grandson of the founder, was MIA for two weeks and the company has appeared less than forthcoming about critical safety issues, risking the trust of its customers world-wide.

The article further states: It is not surprising that Toyota’s response has been dilatory and inept, because crisis management in Japan is grossly undeveloped. Over the past two decades, I cannot think of one instance where a Japanese company has done a good job managing a crisis. The pattern is all too familiar, typically involving slow initial response, minimizing the problem, foot dragging on the product recall, poor communication with the public about the problem and too little compassion and concern for consumers adversely affected by the product. Whether it’s exploding televisions, fire-prone appliances, tainted milk or false labeling, in case after case companies have shortchanged their customers by shirking responsibility until the accumulated evidence forces belated disclosure and recognition of culpability.

Japanese firms often seek to cover up or fudge the facts and the people communicating with the media and public often do not have the information they need to do their job. The absence of a structure to quickly get accurate information to top management hampers an accurate and adequate response. That leaves management unprepared to deal with media questioning and conveys an image of stonewalling and indifference.

This article by Jeff Kingston is a must-read if you want to get your arms around how Toyota’s crisis started, how it grew, and eventually how it exploded. It also points to why Toyota’s problem might be far from over and why its aftermath may continue to linger into the future. In my book, Without Warning, I write, There is little doubt that participating in and winning in a world that is connected, mobile and increasingly transparent can be challenging, creating a multitude of problems for political and business leaders alike, and their organizations. The problems one is expected to solve arrive with risks attached. The potential for faulure is real. At times, the opportunity for a happily ever after ending appears remote at best. Yet this is the sandbox where most political and business leaders play, and at times are asked to leave. It’s also this same sandbox where many followers find themselves, contemplating whether to follow their leaders in the games they play or to pursue a different path, one they believe they can truly make a difference.

Toyota’s problems are real, and everyone must ask, “Are there more surprises in the grass?”  Time will tell.

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Toyota Surprises Again & Again…

Thursday, January 21st, 2010

Over the past 12 months, I’ve been consistently harsh on a couple companies due to their exposure to silent problems. One of these companies is Toyota Motor Company. As is commonly the case, as one silent problem is exposed, suddenly another, then another and another begins to surface. Its as if the dike has been breached and is at risk of crumbling apart.

Today, Toyota announced an0ther recall. The second recall pertaining to dangerous acceleration in some of its vehicles. It stated:

DETROIT, Jan 21 (Reuters) - Toyota Motor Corp (7203.T) said on Thursday it would recall millions more vehicles in the United States, its second massive recall in four months, this time to fix potentially faulty accelerator pedals. The newest recall, affecting 2.3 million vehicles, marked an acknowledgment that potential problem with dangerous acceleration on Toyota vehicles run deeper than the automaker had first announced and broadened a recall that already ranked as its largest ever.  The recalls have damaged Toyota’s reputation for market-leading quality and safety at a time when the automaker’s U.S. sales remain under pressure.  Toyota had previously maintained that there was no evidence of a mechanical fault linked to reports of unintended acceleration that prompted the recall of about 4.2 mllion vehicles last year.

Toyota has lost its sales momentum, its quality distinction and its marketing muscle. In essence, Toyota is simply another me-too car company with nothing exciting to sell or a competitive advantage to tout. As I’ve noted here, here, here, here, and here. But more importantly, its brand reputation for quality over the past year has been bruised badly. Toyota is lost because many of the silent problems it has been avoiding and neglecting for years is engulfing it. As I’ve shown previously (see chart), there is a direct correlation between business performance and silent problems. And its my belief that the silent problems of years past is beginning to engulf Toyota, with more without warning events yet to surface.

What should Toyota do?

Unfortunately, the leaders at Toyota don’t know what they don’t know. First, they need to begin at the basics by asking employees what is really going on. What problems in your area have we been avoiding? What problems are being neglected? My guess is the Toyota culture that use to be great was built around open communication. Now its down to finger pointing. So my suggestion is to get back to basics and begin to inventory the silent problems inside the organization, and then create a strategy around how to solve them.

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Executive Read

Sunday, December 6th, 2009

Every Sunday, the St Paul Pioneer Press asks a local business leader what they’re reading and why. This week, Jeff Prouty of the Prouty Project  reviewed my book, Without Warning. Here is the article.

Who: Jeff Prouty, chairman and founder of the Prouty Project, a Minneapolis-based strategic planning and organizational development firm.

What: “Without Warning: Breakthrough strategies for solving the silent problems taking aim at your organization,” by Rodney N. Johnson

Why: After reading a book, I can always tell how much I gained by the number of Post-Its, dog-eared pages, underlined quotes and starred segments. Without Warning is a 127-page book filled with compelling stories  and pithy quotes that can help leaders begin thinking about their game plan for 2010

The book’s premise is that many businesses and organizations have silent problems - problems that are avoided, neglected or altogether unnoticed - taking aim at productivity and profitability. These problems are ready to attack without warning as people adapt to the problems rather than solve them.

Johnson encourages readers to look out for the following yellow flags, which often are telltale clues of something lurking below the surface:

  • Slow decision-making
  • Unnecessary complexity
  • Busy people with insignificant results
  • Incomplete information
  • Low performance standards
  • Spun answers versus straight answers
  • Quesiness in your stomach.

Johnson shares real-life examples of leaders tackling silent problems. I loved the one about Continental Airlines where the new CEO held an all-employee ceremony in the parking lot to burn the nine-inch policies and procedures manual as a way of creating a sense of urgency to eliminate the stifling bureacracy and start over.

I recommend reading this book as 2009 winds down to stretch every leaders thinking for proactive strategies in the New Year.

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Snippets from Book Reviews

Saturday, August 22nd, 2009

In recent weeks, sales for the book Without Warning have taken off. I contribute part of the success to the independent book reviews received (below are five independent book reviews discussing the book, complete reviews can be found on my website under the “Media Kit” tab). Independent book reviews provide the critical eye essential in determining whether or not you might want to purchase a book. In addition to these reviews, you can also click on the “Learn More” tab, where the first two chapters are available for free. Enjoy, and I look forward to continuing the discussion on Silent Problems and why they’re so important in today’s business environment.

From Lead on Purpose: Without Warning is a fast read with excellent real-world applications and pertinent information for leaders who are striving to move their organizations forward without the barnacles of silent problems.

From Corporate Eye:  The identification of silent problems is a key leadership skill: a good leader will be constantly looking out for them. Rodney Johnson offers 7 symptoms and 5 areas where the problems are likely to be lurking.

Without giving away the list, I can tell you that some of the symptoms could be easily missed in the hurry and scurry of actually doing business. This is why a silent problem is a leadership problem: someone needs to be working at enough of a strategic level that they are working ‘on’ the business not ‘in’ the business - that way they have a chance of spotting the problem.

The book offers a structure for resolving these problems, and this, together with the case studies, is very thought-provoking (as well as entertaining), but it seems to me that the most important element here is identification of the problem. And that, of course, is the nub: the very thing that makes these silent…

 From the magazine, Baltimore SmartCEO: What are your biggest problems right now? What’s the biggest? Go ahead, take a moment and think about these two questions. According to author, consultant and CEO think tank leader Rodney Johnson, it’s highly unlikely that you listed your biggest problem. Johnson says that the biggest problems facing businesses today are “silent problems,” and as a result are much harder to solve.

 Without Warning: Breakthrough Strategies for Solving the Silent Problems Taking Aim At Your Organization takes readers through a unique viewpoint of the problems that may be getting in the way of results.

 From Deon Binneman on Reputation: You’re the manager: how do you know if there is a silent problem? Or do you wait for a whistleblower or until the Media conducts an investigation?

This extract really made me think - Do we wait until reputation risk manifest? Or do we deal with issues whilst they are small? Are we prepared as Dr Roger von Oech wrote in the book, A Whack on the Side of the Head, to slay some sacred cows. To ask, which sacred cows or hidden problem can destroy our hard-earned and carefully crafted reputation?

From Kraig Kramers CEO Tools Blog:  Ever notice how things sometimes suddenly sneak up on us?  Like running out of cash, like your bank isn’t honoring the agreed-to credit commitment, like this recession we’re in, and like dozens of other “creepers” coming up through the cracks?  Finally, there’s a book on spotting the silent problems and solving them!  Rod Johnson, Vistage Chair and speaker and business consultant/coach, has authored “Without Warning” - a fabulous easy-to-read book on breakthrough strategies for seeing and solving those silent problems before they leap in front of you.  A must-read, get it today!

Note: Without Warning is available from most online book retailers - simply click on the “Order Info” tab for a list.

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China’s Without Warning Nature

Wednesday, August 5th, 2009

Over the past decade, the world has become the go-to country. If you want something manufactured, China is at the top of the list. If you want engineering services completed, China is gaining in stature. Yes, China has become the go-to nation on so many products and services. It has also become an integral component of the World economy.

I’ve written about the woes of China many times (China’s Silent Problem), and we now realize there is a consistent and persistant quality challenge for many products sourced there. To help curtail this issue, the FDA set up a Chinese office and now the Consumer Product Safety Commission is setting up a Bejing office. The AP reports.

U.S. regulators announced plans Thursday to set up a Beijing office to help ensure Chinese exports are safe for Americans following a slew of recalls involving everything from pet food to children’s toys.

The U.S. Consumer Product Safety Commission was seeking to establish a permanent presence overseas for the first time to better cooperate with Chinese regulators and companies so the country’s products are up to U.S. standards, the agency’s chairwoman Inez Tenenbaum said.

However, even as one gets past the quality challenges of doing business with China, bigger and potentially more toxic problem likely exist. For one, political and social unrest is present in many sectors of this vast country. For instance, in this weeks edition of ”The Economist,” an article on the growing labor discontent  is on page 37. It states:

WORKERS’ opposition to privatisation and job cuts is widespread but rarely takes so brutal a form as it did on July 24th in northeastern Jilin province, when steel workers chased down and killed an executive who had reportedly come to tell them that an imminent privatisation of their factory would bring massive job cuts… The incident highlights not only China’s labour discontent but the country’s difficulty in dealing with it. Last year, China introduced a series of labour laws that improved mediation and set up an arbitration process to give workers better formal recourse for their grievances, both individual and collective. Workers have indeed been using the process in greater numbers. But only a small share of disputes are taken up, whereas discontents are multiplying.

China chose to become a world leader for many reasons, including improving the standard of living for its’ people. However as a world leader (which they are), comes with it increasing transparency and disclosure. And with each passing day, one has to wonder if another Without Warning Event like toys tainted with lead, a civil uprising, or an economic bubble will present itself. Yes, China is a world power. However, China also feels like its just a minute away from another Without Warning Event, which will be heard and felt around the world.

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Google Insight

Wednesday, July 1st, 2009

In my presentation, Without Warning, I present the problem, silent problem and without warning trifecta. I discuss how a codependency exists between problems and silent problems. I illustrate how problems that are uncomfortable want to naturally gravitate toward becoming silent. And once they’ve become silent, over time they naturally want to gravitate back towards being visible (If more people understood this dynamic, they’d be less inclinded to pursue the silent problem option). Its as if a bozo switch exists that says to us, “If I can avoid disclosing this problem, I’ll be able to figure a way out.” It’s a seductive safety valve that rarely works, yet is often deployed. The challenge is, the silent problem morphs over time, growing more complicated and tenacious to the point where it wants to be visible. And when this occurs, a without warning event occurs.

What does this have to do with Google. As you likely know, Google as a company is admired and feared. It’s transformed businesses and made others irrelevant. It has helped change the world, and much of the world has adapted to it. So when Eric Schmidt, the CEO of Google speaks, people tend to listen. Jeff Jarvis, author of “What Would Google Do” recently attended Aspen Ideas Festival where Eric Schmidt spoke and Jarvis wrote about it over at his blog, BuzzMachine. Here was my Silent Problem moment.  Schmidt states;

I learned awhile ago that the right way to run human systems is transparency. Problems came from information hiding.

 Information hiding is one of the cornerstones for silent problems and a catalyst for Without Warning Events. Information hiding can and does occur at every level of the organization, from the individual, the group, the division and all the way up to the organization itself. It’s a dangerous path filled with short term gains, yet long term consequences. Just look at the daily news. Individuals as varied as Madoff to South Carolina’s Mark Sanford perfectly illustrate this point. It speaks volumes about the individual and their integrity. But take a moment and see how this actually manifests itself.

Problem > Silent Problem > Without Warning Event

Sanford had a problem - infidelity. He somehow believed he could keep it all silent(maybe there was some comfort that having an affair in a different country could be held in secrecy). And when it was exposed without warning, it ruins his career and potentially his aspirations for higher office.

I’ve seen this over and over again. That is, the problem, silent problem, without warning trifecta. It’s a losing combination where careers are lost and opportunities squandered. Spread the word, and of course if you want to learn more - go to the book, Without Warning.

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Undervalued - Opportunity or Risk?

Tuesday, June 16th, 2009

Around the world, the term undervalued is gaining strength. There is undervalued equipment, buildings, and land. Buildings can be purchased for less than they cost to build just a few years ago. Businesses are for sale at “fire sale” prices. Today,” undervalued” is beginning to transform many industries.

Opportunity or Risk?

Of course, it depends. It’s somewhat analagous to going to a garage sale. “It’s only a bargain if you can truly need or can use it.” However, here is the fascinating part of the equation. “Undervalued” tends to be a greater opportunity, especially  for small to mid-sized businesses. Companies that are well run and have adequate capitalization can take advantage of destressed assets. But here is the bigger picture to think about, and it falls under the “Without Warning” umbrella.

If a company is able to purchase undervalued assets and put them to work, how does this change the competitive landscape? Can this become a competitive advantage?

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Entanglement - A New Name For A Silent Problem?

Friday, June 5th, 2009

I was reading an article over at dimbulb. Yes, this is the name of the blog by Jonathan Salem Baskin. It’s a marketing blog, and always seems to have an interesting perspective. Well today’s entry was a little out there in left field and discussed an area of science called entanglement. You’ll have to read the blog entry to appreciate how he ties it back to marketing. It states:

Researchers have recently proven that a quality of the unseen quantum world called entanglement can happen also at the microscopic level (i.e. the size of stuff in the regular world).   

Entanglement is really strange.  What happens is that two particles can get mated (how that happens is a bit of a mystery), and then communicate with one another not just faster than the speed if light, but instantaneously.  This is a really, really big mystery, because it violates a few cardinal laws of physics: nothing can travel faster than the speed of light, at which point an object’s mass should become infinite.  And since light itself has a speed, being instantaneous is something that just doesn’t happen in Einstein’s relative universe. 

Personally, I find some of this stuff I don’t understand, much less comprehend really fascinating. But then dimbulb turned my head with a bright light. Baskin notes;

It turns out that everything there doesn’t really exist at all, per se, but rather hovers in a state on indeterminacy, only collapsing into something observable when somebody observes it. 

Wow… As I’ve discussed in my book and on this blog numerous times, this is exactly how certain types of Silent Problems exist inside organizations, a.k.a. they hover in a state of indeterminacy, only collapsing into something observable when somebody observes it (except I likely didn’t state it that poetically). And thats why silent problems are problematic and opportunistic. I’ve experienced it many times, the silent problem is right under our nose. And unless we become obervationally focused, it too often escapes our sight. And when this occurs, the problem turns toxic and eventually emerges as a Without Warning Event.

For instance, take a look at the headlines in the WSJ or business section for a newspaper. In fact Jim Collins talks about it in his new book which I reported here . Bottom line: Silent Problems are the most challenging type of problem and oftentimes can only be identified when one begins to conciously begin to observe them.

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A Problem That Is Already Half Solved

Thursday, May 7th, 2009

Southwest has and continues to be a much admired airline and company, despite its recent economic downturn. They have been a leader on so many fronts, especially as relates to moral and empowering employees to do whats right. Yes, Southwest reinvented the airline industry. So I was surprised when I read a Bloomberg article titled, “Southwest Slows Growth as Slump Dents ‘Golden Shield.’” This was my special nugget as relates to Silent Problems.

Southwest’s losses have been due in part to its strategy of locking in fuel prices in advance, as far out as five years. Masterminded by Kelly, the contracts helped ensure profits as prices rose. They became a liability when fuel rates tumbled 65 percent last year after a July 3 record.

In December, Southwest replaced its hedging contracts to minimize future losses. It has since resumed hedging, and now goes out only as far as 24 months.

‘Dangerous Competitor’

“One of the neat things about Southwest is that they have problems, but they recognize them,” said Michael Boyd, president of aviation consulting firm Boyd Group in Evergreen, Colorado. “That means the problem is already half solved. That makes them a very dangerous competitor.”

Wow. Words of sage advice. Yes one of the goals of being a leader is to position your organization to become a “Dangerous Competitor.” And one of the best paths to becoming a “dangerous competitor” is to simply solve the problems that your organization interfaces and deals with on a daily basis. Avoid the desire to avoid. Tackle those tough problems up front. And put the problems behind without fear.

In my book, Without Warning, I present why problems are avoided, and why that’s Dangerous. Secondly, I discuss how problems that are avoided rarely fix themselves, but more importantly, how they morph and turn toxic over time. And third, why silent problems tend to be the most dangerous problems of all. Because when they finally surface, they in effect become a Without Warning Event. This is why this book is essential reading to everyone striving to become a dangerous competitor.

Are you up to the challenge and the task?

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Without Warning - Rondey Johnson

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