By Dana Baldwin, Senior Consultant
Strategic Planning Expert
Note: This post is a part of a series taken from Dana Baldwin’s article When Strategies Go Bad previously published in Compass Points in April 2004. In Part 1, we introduced the series and discussed what happened with IBM. In Part 2, we discussed what happened to Global Crossing. In Part 3, we discussed what went wrong with Worldcom, Enron, and the State of California. In Part 5, we discussed what went wrong with Tyco. In this final session, we will summarize our discussion.
What lessons may be learned from all of the examples we have listed in the When Strategies Go Bad posts? The results of actions taken or not taken by companies and/or high level executives can have a huge impact on their companies. These impacts range from misdirection of the corporation to outright violations of laws.
When IBM forgot to listen to the marketplace, it not only fell behind the curve with its PC products, but it held onto its main frame products beyond their useful life in some cases. The saving of IBM is a powerful story, and a real tribute to Lou Gerstner and his drive and perseverance. But that it was necessary drives home the importance of listening to multiple sources of market intelligence. Global Crossing overcommitted to its ambitious fibre plan, badly misjudging the market growth and demand, then compounded errors by falsifying records. Worldcom and Enron took unfair advantage of their customers, their employees and their stockholders, with the responsible people at the top driven by unrealistic personal ambition. The State of California tried to take advantage of a temporary situation in the energy market, with no consideration for the long term implications for the citizens and businesses which ended up paying the bills. An attempt at social and economic engineering resulted in a tragic set of losses for all.
Tyco’s CEO and CFO apparently looted the company for over $600 million. Their raw ambition and lust for money resulted in total disregard for the laws, ethics and morals that are required of businesses in the USA. They violated the trust of their stockholders, their employees, their customers, their bankers and the public.
A wide range of faults, from not listening to the market place to stealing from the company in huge amounts, resulted in some companies having to make a major turn-around, others going into bankruptcy. Many thousands of stockholders, creditors, customers, vendors and employees have been harmed, some grievously. A few were complicit, most were relatively innocent, with great losses thrust upon them, mostly for the benefit of the few.
At the corporate level, seeking broadly-based, multiple sources of market intelligence on which to base strategic planning is a good start. Having sufficient independent oversight on operations and finances is another good method. At the end, however, it comes down to the ethics of the company and its leaders. There is no substitute for good long-range strategic planning and good visibility inside the company, especially at the board level, of the activities and the direction of the company.
Does your strategic planning give you the control and the visibility that will help prevent unethical behavior going undetected? Good strategic planning will have risk analyses built into the process. How does your strategic planning provide protection for your organization?
M. Dana Baldwin is a Senior Consultant with Center for Simplified Strategic Planning, Inc. He can be reached by email at: baldwin@cssp.com
© Copyright 2017 by Center for Simplified Strategic Planning, Inc., Ann Arbor, MI — Reprint permission granted with full attribution.