Friday, January 22, 2010
The UNITED STATES and all of its major companies and universities must return to REALTIY THINKING and focusing on what can be done to IMPROVE, EVOLVE and INCREMENTALLY IMPROVE and not create half backed programs that only cause more harm than good.
FOR INSTANCE... if you want to create jobs...then do the following:
Get new ideas for new businesses and fund them...but be sure they pass the test of success.
Bring back jobs to the US by investing in businesses and giving them the UNFAIR ADVANTAGE that other countries provide...like no taxes, special incentives.
FIX HEALTHCARE by IMPROVING TORT LAWS, ALLOWING COMPANIES TO PROVIDE NATIONAL COVERAGE AND NOT JUST STATE BY STATE, GIVING DOCTORS INCENTIVES TO BE SUCCESSFUL..
IN SHORT, STOP THINKING OUR OF THE BOX AND THINKING IN THE BOX TO IMPROVE WHAT WE HAVE...THE WORDS ARE BE EVOLUTIONARY AND NOT REVOLUTIONARY..SINCE THE EVOLUTIONS WIN AND THE REVOLUTIONARY MOSTLY FAIL.
Bill ROTHSCHILD, AUTHOR OF STRATEGIC THINKING, LEADERSHIP BOOKS, AS WELL AS CONSULTING SERVICES TO IMPROVE STRATEGIC LEADERSHIP SKILLS.
Wednesday, February 11, 2009
."In 1929, the stock market collapsed and the world suffered the greatest economic depression in modern times. As noted, GE's revenues dropped more than 75% during the period. In comparison to many of its peers, who instituted sweeping layoffs---and in many cases put skilled and loyal employees out on the street--Swope and Yound were both more compassionate and more pragmatic. They recognized that if they wanted to keep talented people, they would have to take steps to minimize the Depression's impact on them.Three programs were introduced:
- Unemployment benefits. GE provided loans and relief to those workers the company could not continue to employ.
- Guaranteed work program. GE's electric lamp business allowed workers to share the pain. Instead of just laying off 20% of the workforce, it instituted a program to allow employees to reduce their work hours from five to four days. Because each worker took a 20% reduction in pay, the program permitted GE to keep everyone employed.
- Profit sharing in the 1930's. Another important innovation of the Swope/Young era was the introduction, in 1930, of a profit-sharing plan. This was unique in several ways. First it was offered at a time when many companies were having trouble simply surviving. Second, it was offered to all employees, regardless of their position in the company. Again, this plan was consistent with the socialistic philosophies held by Swope and supported by Young."
Monday, January 5, 2009
Of course, we all admit he may have been the biggest crook in all of history...but I would like to discuss what Bernie did that could be put to POSITIVE practices.
First Bernie understood segmentation. He targeted primarily the Jewish wealthy and charities. Based on what is published these were his chosen people. I am a strong believe in targeting and focusing on a specific segment. This might be based on gender, affluence or wealth...Bernie targeted both affluence and religion.
Second, he created a "myth" of exclusivity. He didn't accept anyone and even rejected some of his applicants...this made his myth even strong... it was the "exclusive country club" mentality.
Third, he didn't hire a large sales force, but permitted his sales force to belong and then use their Missionary zeal to convert others. Many of his missionaries lost all they had, but believed in Bernie.
Fourth, the created HIGH EXPECTATIONS and MET THEM. His returns were high and consistent.Overall BERNIE MADOFF was the living image of the RELATIONSHIP, ENTREPRENEURIAL salesman. He did a great job... but unfortunately it was ALL A LIE.If we ignore Madoff's dishonesty... he exhibited the essence of a RELATIONSHIP Salesman...
Bill Rothschild... author of THE SECRET TO GE's SUCCESS... a company who was never led by the MADOFF types and has delivered what it promised...for over 127 years (and hopefully will continue to do so for the next 100 years)
Friday, December 5, 2008
It is amazing to watch the three automobile CEO's sit before Congress and ask for the Federal Government to save them. The American Automobile companies are a classic case of a HARVEST strategy, which in simple terms they have sold off market share over several decades, reaped handsome profits and then collapsed.
Each of these three companies had innovative leaders:
- Alfred Sloane was the leader in market segmentation and providing unique brands and autos for each segment. He led the idea of market migration...the first buyers purchased a Chevy, then migrated upward to the ultimate a CADDY.
- Henry Ford was the low cost, manufacturing genius, introducing the assembly line and offering one color BLACK.
- Chrysler focused on product innovation and differentiation and introduced man
Each of the companies prospered until the early 1960s, when they all assumed that there would be FEW automobile companies and they could compete against themselves and ignore the new comers, Japanese automakers.
In fact they allowed the Japanese to take control of the small, economy car segment because its margins were lower than the big, gas guzzler segments.They all moved to a manufacturing strategy and ignored the markets and the trends. They sacrificed quality and innovation for lower costs and then gave away the shop to the UNION, providing unreasonable benefits and increasing salaries. They sold the same cars under different brands and downgraded the quality of the high end, prestige brands, like Cadillac, Lincoln and Chrysler.
All of these companies instituted "cookie cutter" manpower and educational systems, so that all of the candidates looked alike and were "automobile" men.
Further all of them divested their non automobile subsidiaries to focus on just automobiles. For instance, General Motors sold its Frigidaire appliance business, its ALLISON division, its locomotive business and so on. All of which were market leaders, but didn't fit the automobile mentality
The reason that it has taken decades to put these companies on the edge of collapse is that they had very large share and were so big. It takes time to harvest giants, but ultimately they meet the same fate of smaller companies, they go out of business. This is the point they are today.
I have mixed emotions about whether to save them or not, but I do think that all of the current leaders, the company's Board of Directors SHOULD RESIGN now... but the problem is that because of their COOKIE CUTTER development systems, it is unlikely they have replacements that can do the surgery and competitive/ market based strategic thinking and development requried and unfortunately it has been demonstrated that bring in outsiders doesn't work either.
Further it is difficult to do creative strategic thinking when you are in the EMERGENCY room and just trying to stay alive. Strategy MUST Be DONE when you are healthy and have options and not when you are trying to survive.Sloane, Ford and Chrysler must be turning over in their graves.
Bill Rothschild, author of the book that shows why GE is different and hopefully will avoid the same mistakes as the Automobile companies...THE SECRET TO GE's SUCCESS and PUTTING IT ALL TOGETHER - a guide to strategic thinking and decision making.
Sunday, November 2, 2008
There are FOUR factors that have contributed to this destruction:
- Unrealistic expectations. Most of the LOSERS have promised results that were unrealistic, poorly conceived and missed them dramatically. It is truly amazing how much money major organizations have lost and missed their promised results.
- Surprised Themselves. To make matters worse, the management of these organizations have not only surprised their stakeholders, but themselves. This is the worse SIN anyone can commit. It means that the organizations lack internal assessments and believe their press releases and not the reality of their situation. It appears that they have had staff organizations who were "yes people" and not willing or able to point out that the "emperor has no clothes".
- Arrogance and unwilling to admit mistakes and take responsibility. Not only have these "so called leaders" fooled themselves, but have been so arrogant that they refuse to admit they made mistakes and were at fault. They use the "blame game" to say that everyone else was at fault and not themselves.
- Rewarding themselves for failure. Finally they destroy organizations, put them in bankruptcy, do harm to their investors, employees, communities, but have the nerve to take HUGE compensation packages. They reward themselves tens of millions of dollars and benefits for FAILURE.It is amazing that these four characteristics can be attributed to major organizations. Some are still viable, but many have been destroyed forever and everyone has lost.
The real issues are: WHY DID IT HAPPEN AND WHAT CAN BE DONE TO PREVENT THIS IN THE FUTURE. I hope that the major MBA programs are studying this situation and will determine if they were also responsible for the problem and how they can prevent it in the future.
Bill Rothschild, author of the only comprehensive, objective and insightful assessment of GE's 127 years... THE SECRET TO GE's SUCCESS and Risktaker, Caretaker, Surgeon, Undertaker- the four faces of strategic leadership.
Monday, October 13, 2008
IF WE WOULD ENFORCE THE USUARY LAWS AND STOP CHARGING CREDIT CARD USERS EXHORBANT INTEREST RATES. (15% PLUS) THE SAME AS THE LOAN SHARKS CHARGE WE WOULD RELEAVE THE AVERAGE AMERICAN OF AN ENORMOUS BURDEN. MOST AMERICANS ARE MAXED OUT BUT BEING CHARGED THESE LOAN SHARK RATES...TAKE A STAND AGAINST THIS ILLEGAL AND MORAL ABUSE.
Bill Rothschild, CEO of ROTHSCHILD STRATEGIES UNLIMITED LLC.
Saturday, October 11, 2008
"Never Over promise and Minimize (if not avoid) Surprises"
This was the essence of the Ralph Cordiner and Reg Jones eras in Strategic GE's history.
- These are some quotes from my book" The Secret to GE's Success" which focus on creating and meeting investor expectations:
" In the 1950's, Cordiner initiated Investor Relations as one of the new corporate functional services. The organization's job was to help create realistic expectations among the investment analysts and then communicate expectations internally so that the operating and executive officers understood the right level of profitability to achieve
- "Jones was one of the most skilled executives in this regard. He established a team consisting of staff members from investor relations, finance, and strategic planning (my job at the time) as well as his own vice chairmen to determine the expectations that could be achieved consistently.
- "If there was a gap between what business units promised and "Wall Street expectations" Jones recognized that if he compelled all of the businesses to increase their profit levels, he might negatively impact the ability of at some divisions to execute their approved strategies.. a special evaluation was created to assure that the increased profit levels didn't negatively impact the "growth businesses" (again one of my jobs).
I had the good fortune of being part of the Jones process and helping the company meet Wall Street Expectations while implementing the approved strategies. It was challenging but fun.
Bill Rothschild, author of THE SECRET TO GE's SUCCESS the most comprehensive, objective assessment of GE's 127 years of progress, now in six languages.