Showing posts with label Alan Deutschman Walk the Walk. Show all posts
Showing posts with label Alan Deutschman Walk the Walk. Show all posts
Tuesday, September 1, 2009
Wall Street Journal review of "Walk the Walk"
The Wall Street Journal's review of my new book, "Walk the Walk" called it "an engaging reminder of some leadership basics that aren't necessarily taught in business school."
Friday, July 10, 2009
"Walk the Walk" Watch: Angelo Mozilo
The great business journalist Connie Bruck's fascinating article in the New Yorker magazine about the fallen king of home mortgage lending, Countrywide Financial's Angelo Mozilo ("Angelo's Ashes," June 29, 2009), shows the disastrous effects of powerful leadership that was focused on the wrong objective. Bruck writes that in 2002, when Countrywide had a market share of almost 10 percent, and none of its competitors had more than 13 percent, Mozilo decided to strive for unprecedented dominance of his industry: He set a goal of capturing at least 30 percent market share. As the co-founder and strong leader of Countrywide, Mozilo's overriding goal became the laser-like focus of his people, even after Mozilo himself largely stepped away from the company's day-to-day operations. In their effort to achieve his highest values--rapid growth and market dominance--they sacrificed other values that should have been important, such as creating relationships with their customers that would be mutually beneficially for the long-run.Countrywide was one of the biggest pushers of high-risk mortgages that led to countless people losing their homes--and the financial system nearly collapsing.
In my upcoming book "Walk the Walk," I write about how a real leader must constantly show the one or two values that are most important for the company. Mozilo did exactly that. The problem is that they've got to be the right values. Any time a company is focused on growth and dominance as its No. 1 objective, then the other things that get in the way, such as ethics and prudence, will likely be sacrificed. If Mozilo had enshrined the security and prosperity of Countrywide's customers as his top value, the outcome might have been very different. Instead, he wanted market dominance at whatever price--and that's exactly what he wound up achieving.
In my upcoming book "Walk the Walk," I write about how a real leader must constantly show the one or two values that are most important for the company. Mozilo did exactly that. The problem is that they've got to be the right values. Any time a company is focused on growth and dominance as its No. 1 objective, then the other things that get in the way, such as ethics and prudence, will likely be sacrificed. If Mozilo had enshrined the security and prosperity of Countrywide's customers as his top value, the outcome might have been very different. Instead, he wanted market dominance at whatever price--and that's exactly what he wound up achieving.
Monday, June 1, 2009
"Change or Die" Watch: General Motors' bankruptcy
Anyone who's wondering how a company that it had so dominant in its field, as General Motors once was, could wind up declaring bankruptcy, as GM did today, might want to read the sections about GM in my book "Change or Die" (Collins, 2007). Here's one passage from the book describing the "denial" of GM's executives about their problems going back a half century:
In its heyday GM had been had been extraordinarily dominant in its business. It captured 60 percent of the U.S. car market in 1960, selling twice as many cars as Ford and Chrysler combined and six times as many as the imported brands. But GM's executives developed a superiority complex, and for decades they remained in denial about their cars' quality problems.
They had the facts from the beginning. In 1960 GM's engineers came up with a 100-point scale for comparing the quality of cars produced by the company's many factories. A perfect car would score one hundred. Every defect would knock off a point from the total. It turned out that many of GM's plants typically made cars with forty or more defects. They posted scores of sixty or below. That was embarrassing, since everyone remembered their own schools days, when a sixty was an F, a failing grade. They didn't improve the quality of the cars--they didn't know how. Besides, their cars weren't any worse than their competition's. Instead, they recalibrated the scale so 145 would represent a perfect score. This way, all of GM's plants would score one hundred or higher. A-plus! When a plant scored 130, employees would throw a celebration even though the cars still averaged fifteen defects. No customer would celebrate buying that car.
Of course GM ultimately closed the quality gap, but its top executives remained in denial about the crisis that confronted its industry beginning in the 1970s. Instead of learning lessons from the '70s oil shock, they went right back to relying on big gas-guzzling vehicles for their profits while Toyota got a crucial head start of several years in developing the technology and the market for fuel-efficient hybrids. GM has been in crisis since the '70s, but crisis does not actually inspire change, contrary to the conventional wisdom.
Faced for decades with a "change or die" scenario, GM didn't change.
Now Geneal Motors is going to survive only because of the federal government's role. But from what I hear, the Detroit auto executives are still in denial, even now. For months they've felt that U.S. has been ungrateful for everything they've done for this country, as evidenced by the feds' refusal to bail out Detroit to the extent that it bailed out Wall Street, instead forcing the automakers into bankruptcy and GM into nationalization.
Never underestimate the power of denial.
In its heyday GM had been had been extraordinarily dominant in its business. It captured 60 percent of the U.S. car market in 1960, selling twice as many cars as Ford and Chrysler combined and six times as many as the imported brands. But GM's executives developed a superiority complex, and for decades they remained in denial about their cars' quality problems.
They had the facts from the beginning. In 1960 GM's engineers came up with a 100-point scale for comparing the quality of cars produced by the company's many factories. A perfect car would score one hundred. Every defect would knock off a point from the total. It turned out that many of GM's plants typically made cars with forty or more defects. They posted scores of sixty or below. That was embarrassing, since everyone remembered their own schools days, when a sixty was an F, a failing grade. They didn't improve the quality of the cars--they didn't know how. Besides, their cars weren't any worse than their competition's. Instead, they recalibrated the scale so 145 would represent a perfect score. This way, all of GM's plants would score one hundred or higher. A-plus! When a plant scored 130, employees would throw a celebration even though the cars still averaged fifteen defects. No customer would celebrate buying that car.
Of course GM ultimately closed the quality gap, but its top executives remained in denial about the crisis that confronted its industry beginning in the 1970s. Instead of learning lessons from the '70s oil shock, they went right back to relying on big gas-guzzling vehicles for their profits while Toyota got a crucial head start of several years in developing the technology and the market for fuel-efficient hybrids. GM has been in crisis since the '70s, but crisis does not actually inspire change, contrary to the conventional wisdom.
Faced for decades with a "change or die" scenario, GM didn't change.
Now Geneal Motors is going to survive only because of the federal government's role. But from what I hear, the Detroit auto executives are still in denial, even now. For months they've felt that U.S. has been ungrateful for everything they've done for this country, as evidenced by the feds' refusal to bail out Detroit to the extent that it bailed out Wall Street, instead forcing the automakers into bankruptcy and GM into nationalization.
Never underestimate the power of denial.
Saturday, May 30, 2009
"Walk the Walk" Watch: Laura Chenel
Even though my new book, Walk the Walk: The #1 Rule for Real Leaders, won't be published until September 17th, it's too late for me to add new material: the text is already edited and the advance copies ("galleys") have been printed and we've received endorsements (for the back cover) from some truly remarkable people. So of course I've been discovering even more examples of leaders who actually "walk the walk" and would have fit perfectly for the book.
One of those leaders is Laura Chenel, a pioneer in the delicious revolution in American food, who back in 1979 became the first person in the U.S. to make a real business out of producing goat cheese. I've enjoyed her cheese for the past two decades, but it was only recently that I understood why it was so good. I found a New York Times profile of Chenel (published October 18, 2006) that talked about how much love and attention she gives to her five hundred goats in Sonoma, California. She names every goat. She gets to know the goats so well that her business and life partner, John Van Dyke, said: "I know right where I stand. I am number 503, after her 500 goats and her two cats."
Now that's passion and commitment! The Times story was about Chenel, at age 57, selling her cheese business to a French company. But she would keep her 500 named goats and supply the new owners with the milk for the superb cheese that bears her own name, Laura Chenel Chevre.
One of those leaders is Laura Chenel, a pioneer in the delicious revolution in American food, who back in 1979 became the first person in the U.S. to make a real business out of producing goat cheese. I've enjoyed her cheese for the past two decades, but it was only recently that I understood why it was so good. I found a New York Times profile of Chenel (published October 18, 2006) that talked about how much love and attention she gives to her five hundred goats in Sonoma, California. She names every goat. She gets to know the goats so well that her business and life partner, John Van Dyke, said: "I know right where I stand. I am number 503, after her 500 goats and her two cats."
Now that's passion and commitment! The Times story was about Chenel, at age 57, selling her cheese business to a French company. But she would keep her 500 named goats and supply the new owners with the milk for the superb cheese that bears her own name, Laura Chenel Chevre.
Sunday, May 17, 2009
Preview of "Walk the Walk," the book, is up on my website
An image of the cover of my upcoming book, "Walk the Walk: The #1 Rule for Real Leaders," is posted on the homepage of my newly redesigned website, www.alandeutschman.com, along with a brief preview of the book's contents. Check it out. The book will debut in stores on September 17, 2009.
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