Continuously assessing & evolving an executive leadership team is vital yet difficult.
First, people aren’t necessarily perfect packages of capabilities that meet every specific need. Often, people, even top managers, excel at some things but are not as competent in other matters.
Second, leaders may also be seemingly difficult to replace. Just because you are not satisfied with a current member of your team doesn't mean it will be easy to find an appropriate replacement. Nor does it indicate that the alternate will necessarily be an upgrade.
Third, there are learning curves to be concerned about. Someone new has to learn a new company role, and it might take some time before that individual is as proficient at day-to-day tasks as the predecessor. Moreover, a new leader also has to work with a new team, and earn the respect of other stakeholders in the organization.
So, the situation often comes down to the following. Is it a larger problem to keep somebody you should not have? Or to replace someone you shouldn't have?
Often times, there are no precise answers to such questions. It involves a matter of judgment.
This is one of a few key reasons why leadership is difficult.
In April 1993, Newsweek wrote about IBM's decision to hire an outsider as its next CEO. The new CEO had neither IBM
specific nor industry expertise. The article indicates that other "successful" CEOs weren't interested in the position and hence the IBM board was forced into hiring a sub-optimal candidate.
Now, some two-and-half decades later, it's interesting to look back at the situation, strategic decisions and results.
The Situation in 1993
For the nation's fourth biggest company, times had never been tougher. Despite cutting 100,000 jobs in three years, closing plants and abandoning a cherished commitment to lifetime employment, IBM lost $5 billion in 1992, and the computer industry's brutal price wars make more red ink likely this year.
The core of the its problem was IBM "badly misjudged the direction of computing in the 1980s. It continued to focus on mainframe computers even as customers were replacing them with networks of desktop units. It didn't foresee that low-cost clones would steal away its lead in personal computers, and it was slow to understand that much of the profit in computing would move from hardware to chips and software. And, while competitors dramatically reshaped themselves, IBM dithered.
The firm did take some action in 1991 such as:
Although IBM did improve its performance from 1993 - 2000, the results at least compared to the QQQ and TLT don't look as impressive. So, several questions remain:
Chart via Yahoo Finance
In a September 2015 Forbes article, a Stanford University professor of management cites survey data indicating challenges with employee engagement:
The professor suggests that one potential factor for this lack of engagement is "almost inevitable outgrowth of the increasingly “transactional” nature of work...as there are an ever-higher proportion of contractors and part-timers doing organizational work."
And, even "full-time employees face increasingly levels of economic insecurity including layoffs and, in the case of many retail employees, always-varying schedules that make predicting time demands and income almost impossible."
Furthermore, the researcher concludes that "seeing people as costs to be minimized, and the increasingly transactional nature of companies, means that the social relations that once bound people together and to their companies have largely disappeared."
5 Years Later the Data Are Worse
The contractual nature of work has only accelerated since the above observations were presented, with Uber and the rapid acceleration of the gig economy. Moreover, due to the effects of COVID-19 in early 2020, layoffs and retail disruption have surpassed those of the Great Depression nearly 100 years ago.
Viewing the workforce as an investment to be maximized is in stark contrast to the mindsets of many contemporary leaders. This perspective will not only help to improve employee engagement but also organizational results.
For those strategists interested in state-by-state COVID-19 data, this particular site provides visualizations of Rt data.
"Rt represents the effective reproduction rate of the virus calculated for each locale. It lets us estimate how many secondary infections are likely to occur from a single infection in a specific area. Values over 1.0 mean we should
expect more cases in that area, values under 1.0 mean we should expect fewer."
Two useful set of frameworks help an investor analyze a business' expected level of performance: Porter's 5 Forces & Value Chain tools. Used in combination, these frameworks help an equity analyst with framing a firm's ability to generate superior profits.
NOTE: this blog post is related to a Coursera #MOOC assignment and should be considered to a part of that particular program's requirements and context.
The End of the Cord for Comcast?
While cord-cutting has gotten a lot of media attention, it actually hasn't hurt the bottom line of traditional cable providers such as Comcast. And, it probably won’t for the foreseeable future.
What is Cord Cutting?
According to Technopedia, cord cutting “refers to the process of cutting expensive pay-television services (e.g., cable connection services) in order to change to a low-cost TV channel subscription through over-the-air (OT) free broadcast through antenna, or over-the-top (OTT) broadcast over the Internet. Cord cutting is a growing trend that is adversely affecting the cable industry.” Netflix, Apple TV and Hulu are some of the popular broadcasting services that encourage cord cutting. The cord cutting concept received a considerable amount of recognition starting as early as 2010 as more Internet solutions became available. These new media broadcasters have convinced millions of cable and satellite subscribers to cut their cords and change to video streaming.
In fact, in 2018, the major pay-television companies lost about 2.5 million television customers according to research analysts at the investment banking company XYZ. Global media research & consulting firm ABC is suggesting that it could be time for traditional pay TV services to grab a lifejacket, “as the first quarter of 2019 brought about the largest number of cord-cutters yet.”
Here's What's Happening Now in the Industry
Currently, in most situations, consumers who eliminate pay-TV subscription are not giving up on television entirely. They're just swapping from traditional cable to the new media or streaming services. That means they not only require broadband service, but they probably also desire the highest quality broadband possible.
Occasionally there's no alternative, since approximately half of Americans reside in geographies served by only one broadband provider. For those who live in a market with multiple providers, the choice has largely been to select the faster, higher-quality service provided by cable companies compared with alternative connection types available via telephone company providers (e.g., AT&T) or satellite suppliers (e.g., DISH network)
The telephone providers are losing immense amounts of internet customers, meaning that existing their subscribers aren't switching from pay-TV to internet connection services. According to company annual reports, AT&T lost 18,000 internet customers in 2018 while Verizon gained just 2,000. The larger Internet broadband losers – which most likely saw their customers switch to Comcast, Charter and other cable providers – were CenturyLink (down 262,000) and Frontier (down 203,000) according to analysts of the AAA Research Group.
Here's What's Happening Now to Comcast
Similar to the other cable operators, Comcast continues to gradually lose its cable-TV customers to the less expensive, more flexible new media streaming alternatives. Indeed, Comcast recently saw its biggest ever annual loss of such subscribers in history, with Comcast losing 120,000 subscribers during the third quarter alone according to analysis from CRFA research.
Realizing it must take action to deal with the continued success of the new media streaming competitive threat, Comcast has responded by adding Netflix to its own cable boxes in the hope it will keep its existing customers from eliminating their services. And, recently, Comcast indicated that the company launched a new streaming device for its Internet customers that enables its users to view not only Comcast's cable TV content, but also that of some competitors. Once more, the aspiration is that by expanding the set of options, it customers will resist the new and emerging options.
Here's What's Might Happen to Comcast in the Future
Looking to the future, Comcast does have a variety of options that could prove compelling. First, as described above there is limited competition in certain markets in terms of both cable and broadband Internet options. Second, when it comes to subscription services, many consumers still are avoiding the hassle of making cutting the cord because of inertia. And, third, the advent of 5G wireless technology. 5G will usher in a number of new technologies including smart cities, augmented and virtual reality and autonomous vehicles, all of which present new revenue streams for network operators. And, since 5G network deployments will require substantial investments in new antennas, stronger data backhaul infrastructure and network cores to facilitate growing data traffic and an increase in the number of connected devices, Comcast has the financial resources whereas most other new media firms certainly do not. It will be interesting to see how the “cord-cutting” phenomenon unfolds in the future for both consumers and Comcast.
Below are my raw show notes from a recent "Measured Thoughts" audio cast featuring the Chief Marketing Officer (CMO) of Deloitte.
I highly recommend this particular episode for those interested in the changing nature of marketing activities as well as how a professional services leader views marketing consulting services.
And, recordings of many of the shows are listed here: https://www.measuredthoughts.com/radio-shows
My raw show notes from the "Work of Tomorrow" audio cast focused on Journalism in the age of digital.
Full show available via iTunes:
Highly recommend it for those interested in the changing nature of work due to globalization & digitization.
What is it that is preventing you from spending more time in Box 2 and Box 3? What are the barriers that prevent you from spending more time on the future?
There are four challenges or barriers which when coupled together make is nearly impossible for a traditional financial services firm to spend more of its collective time, investment and resources in Box 2 and Box 3. The first challenge is increasing industry competition. One of my clients is a Global 50 financial services organization which offers a wide range of products such as commercial banking, retail banking, mortgage lending and other related banking services. The competition in these markets is intense and even more so with the emergence of the digital giants (e.g., Amazon) as well as the digital disrupting fintech startups (e.g., Prosper, Betterment).
Second, many industry insiders focus their short-term attention on the regulation and compliance rules that have consistently dominated management’s attention since the 2008 Financial Crisis. The consistent wave of these new rules creates demand for new Box 1 initiative which crowds out investment in potential Box 2 and Box 3 programs and experiments.
The third challenge relates to management’s predilection for short-term financial metrics. As a public company, management must satiate shareholders in the short term. This quarterly focus also limits management’s appetite for programs that don’t generate a predictable, return on investment in a timely fashion.
The fourth and final barrier to more non-linear thinking is that many financial service insiders are risk adverse by nature as well as training. Box 3 is about creating the future and thus involves a high degree of uncertainty and risk taking. Perhaps this lack of risk-taking on the behalf of traditional financial services management is the key barrier to Box 3 innovation? The digital giants and fintech upstarts do not face this barrier.
@RayBordogna opines on "strategy" concepts.