Musings at Altitude

One of the most memorable things about owning my own business in the late 90’s and then being part of a Silicon Valley start up right after 9/11 was the incredible sense of urgency when we were accountable for meeting payroll in the first case or keeping the company alive till the venture funding returned in the second.  In every active business moment, we had a sense of urgency that was shared throughout the team, and we shared the burdens of decision making as costs were pruned and people were let go during the cash crisis we faced in both cases.  Every cut hurt deep, but every cut was required to ensure the day to day survivability of the company.

In these tough economic times, folks who went through “survival training” as start ups or small businesses during the late 90’s and early years of this decade are well prepared to think quick and respond to the uncertainties of today.  But many of those who trained so well back then have moved into mid size and big company roles, and those skills that were honed during the tough times of the past seem numb now for some of them since they are now comfortably situated inside the bigger companies.  For some reason, big companies by nature reward methodicalism and in some ways complacency.  People are appreciated for muted responses to incredibly urgent issues…I guess it’s perceived as an act of maturity and stability to be able to patiently think through the challenge before deciding to act.  In the OODA loop scenario, when things are the most tense, big companies get great comfort from a long OOOOOOOO (that’s observe and orient) before any DDDDDDAAAAA (that’s decide and act).

As I think back on the fall of so many financial institutions in this country over the last 90 days or so, I can’t help but think that the lethargy of business decision making and the complacency of those in charge played a major role in the lack of action until only one possible action was left.  And today, even with the obvious examples of inaction in advance of failure, so many companies are hanging on to past practices and wishful thinking in a desperate hope that the economic crisis won’t collect them as well.

In today’s environment, every single company should be taking action – of some kind – of any kind.  If you believe Jack Welch and agree that you need to be changing faster than the environment around you, then change should be constant right now.  Any hesitation could be catastrophic, and as we’ve seen, catastrophic could be total implosion and collapse.

I love comparing business to sports, and when teams are faced with crisis on the playing field, they simplify the offense, get aggressive on the defense and take chances to win.  I’m a believer that the same applies in business – when things get tight (seems like that’s an understatement for today), then we should simplify the play book, focus tightly on the things we do best, get more aggressive in offense and get more aggressive on defense as well.  Here are two examples that are a far stretch in this case, but relevant:

(1)  I love professional football, but I hate watching games where the team in the lead goes into a prevent defense near the end of the game when the pressure builds and the other team gets more aggressive.  More often than not, by becoming conservative they actually give up the score and then – even worse – sometimes lose.  If being aggressive gets you the lead, then it seems like being aggressive will allow you to keep the lead when things get tense.  This seems to apply to business as well.

(2)  I enjoy watching NASCAR too, and we’re in for a treat this coming weekend when Jimmie Johnson wins his third consecutive championship.  Over the last few weeks, the commentators have talked about two different strategies to ensure the win – (1) race to finish, not necessarily to win; and (2) race to win.  Jimmie Johnson races to win in every single race, and because of that aggressiveness, he only has to finish in the top 36 this last race to win the championship.  I wonder how different the standings would be now if Jimmie Johnson became cautious once he got the lead rather than stayed aggressive.  I can’t believe it would be better than the massive lead he has now.  It seems like business is the same way.  When things get tense and the pressure builds, the things that led to success during the boom times should be the perfect and much needed approach during the tough times as well. 

In business, instead of getting conservative or slowing down, jack up the offense and defense and keep the accelerator floored.  Accelerate the decision making and then take decisive though simpler actions.