Corporate Mediocrity Can’t Be The “New Normal”

Meg Whitman - HP Photograph: Imaginechina via AP Photo

Meg Whitman – HP  [Photograph: Imaginechina via AP Photo]

At a time when great companies like Yahoo, Hewlett-Packard, Sprint, and IBM (among others) are working through serious issues, vigorous efforts to eliminate behaviors that institutionalize mediocrity must be a top priority.  I have found that a key to understanding and then, changing, a culture is carefully listening to how employees speak.

Business-speak tends to be a very accurate reflection of a given environment, with some once popular phrases benignly fading over time (“Management By Objectives“) and others becoming comical clichés (“Win/Win“) they’re not worth commenting on.  Of all the truly horrible business terms that have ever been coined, “setting expectations” has always deserved particular contempt, but since it has gotten married to managers who blame all their shortcomings on “the economy“– and now birthed a child–it’s downright dangerous.  The child, of course, is the growing number of executives looking to sell “flat is the new normal” as acceptable corporate growth.

Spotting and correcting the damage expectation setters, the economy justifiers and flat is the new normalites cause in a business requires purposeful, hand’s on leadership. Flat is the new normal–setting expectation’s” and the economy’s lethal child–must be euthanized before it further matures and gains broader acceptance.

Case in point:

A high potential financial services company in distress brought me in as–in their own words–a last resort to determine if the company could be saved.  Although the company had a great product and apparently capable staff, the business was in steep decline in every measurable category.  It didn’t take me long to determine why this was the case.  At my first meeting with their executive committee

  • The firm’s CEO opened by saying “the problem is our competitors have wrecked the industry by cutting prices the customer doesn’t want to pay a fair price for our great service”.  Having opened the door with set expectations,
  • their CFO chimed in that since the economy tanked everyone in financial services was just fighting to survive and by his estimation they had done an excellent job since they were still in business.  Now that he firmly fixed the problem on economic forces beyond the company’s control,
  • the EVP-Development quickly followed suit by talking about their emphasis on achieving profitability by firing customers and that their goal was to not grow.  Yes, the executive in charge of business development stated an elegant case for not developing business and his executive committee peers were in full agreement!

In this case, like many others, the top-level senior executives had become so adept at justifying poor results, poetic in letting themselves and each other off the hook, and so removed from the company’s business they were stifling the very organization they were expected to lead. My subsequent meetings with staff and company customers revealed no one else shared management’s views.  Employees believed executive management would reject any new initiatives so they didn’t bother trying.  Customers liked doing business with this financial services firm and expressed great interest to expand their relationship.  When the firm’s executive committee was presented with the evidence and a plan of action they quickly agreed to implementing a growth strategy that has paid off with restored profits and double-digit growth.

Corporate leadership and superior business acumen is most needed when companies are faced with adversity.  However, instead of inspiring great performance when challenged, too many executives not only accept inadequate results, they work overtime to find and describe plausible boogeymen.  Companies unable to profitably grow a business are fundamentally flawed and executives unable to address the strategic or operational imperfections are the wrong people.  Conditioning stakeholders to just deal with flat growth as the way it is and will be strangles innovation and destroys a company’s culture;  assuring institutionalized mediocrity that will further reduce expectations ultimately leading to business failure.

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