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Posted by on May 14, 2013 in Featured, Leadership, New Leadership in the New Economy: Diversity Matters, Talent | 25 comments

Dear Enterprise Leaders, You’re Screwed. Here’s Why.

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Dear Enterprise Leader,

I’ve got some terrible news for you. Your best talent isn’t good enough to compete. Better talent is at work right across town, in an over-crowded garage at the house of some tiny firm’s founder.

Unlike your mammoth offices, this garage is full of energy, excitement, and – here’s the worst part for you – it’s full of absolute brilliance, the type of brilliance your own company was attracting just a few years ago, at the depth of the recession.

Buddy, you’re screwed. Chances are, it’s all over but the crying.

Your company is big, has a whole lot of customers, and an absolutely astonishing amount of cash. That’s all great, without question.

So what on earth am I carrying on about?

They’ve been so vanillafied that they have no flavor

In today’s business environment, each of those benefits I listed is actually a liability, that’s what.

You’re big – cumbersome. While new, little companies can turn on a dime, your bureaucratic processes allow you to change course about as quickly and gracefully as a fully loaded cargo ship on a water-ski slalom.

Worse, by the time all of your committees and layers of management put new ideas through their paces, they’ve been so vanillafied that they have no flavor: they’re safe, when today’s hyper-competitive world demands bold.

You have a lot of customers: good news, right? Not when all of your customers hate you. And let’s be honest, the only reason you haven’t adopted Net Promoter Score is that you don’t want your stockholders to learn what you already know: that it’s damned hard to find a promoter among your maltreated and ornery customers.

You’ve got contracts? Contracts expire, and as they do, the customers you tricked or bullied into signing will be only too happy to talk to that little garage firm across town.

You’re cash rich: yea!!! Right? Not when your employees resent you for it as they do. They know full well what reserves you have on tap, and what lavish bonuses you dole out to your C-level cronies every year.

Meanwhile, their own wages have stagnated for far too long; they’ve endured layoffs of their friends and had to absorb two, three, or more people’s workloads. As with your customers, you don’t ask your employees about their engagement for a very good reason: you already know, and you don’t want your board to get wind of it.

Time was when you could read those bullets and laugh smugly, while ordering another round of layoffs and another new jet. But with the recession behind most of us, and with the costs associated with starting a company at unprecedentedly low levels, new companies are popping up all over the place. These startups have energy and excitement, as startups often do.

Order another round of layoffs and another new jet

They also have one more feature that maybe wasn’t so important back when you were cutting your teeth in business a generation ago: they have much of the best talent available, anywhere.

The economy of the Twenty-Teens is motored by talent rather than by geography or capital or scale or defensive patents or anything else that used to matter last time you checked.

Talent is such a vital component of business that the following sentence should be tattooed backwards on every leader’s forehead, for them to read in the mirror several times each day:

He who wins the war for talent wins it all.

Are you winning the war for talent? Are you even fighting in that war? Or are you playing by last century’s playbook? – And I do mean playing, while those inspired, engaged, ingenious folks in the garage across town aren’t playing around at all: they’re fighting, and they’re winning.

It’s an important question, because if you don’t figure out how to attract and keep fewer bureaucrats while adding and retaining more talented staff, you truly are screwed.

 

Continue reading our New Leadership series with Time to Embrace the Millennial Overachiever

Photo by Pites

Ted Coiné

Ted Coiné

Keynote speaker. Author of A World Gone Social: How Companies Must Adapt to Survive. Three-time CEO. Chairman and Founder of Switch and Shift. Ted Coiné is one of the most influential business experts on the Web, top-ranked by Forbes, Inc., SAP Business Innovation, and Huffington Post for his leadership, customer experience, and social media influence. Ted consults with owners, CEOs and boards of directors on making their companies more competitive by making them more human-focused. He and his family live in Naples, Florida.

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  • http://twitter.com/PASmithjr Al Smith

    Another fantastic post, my friend. Absolutely love this. Hope some of the big dogs actually read it. take care brother. Not sure when I will be back to Naples. We need to set up a lunch meeting or something.
    Al

    • http://twitter.com/tedcoine Ted Coine

      Thanks Al – the top brass who read Switch and Shift regularly already get how to do business from a more human perspective – at least those I know of! But we’ll see who forwards this to their boss… ;)

      Come on over, any time!!

  • Madhurima Nag

    A very well written article rather letter I must say! Big enterprise leaders do need to worry, don’t know whether they are aware of it at all!

    • http://twitter.com/tedcoine Ted Coine

      Thanks Madhurima! You know, if they aren’t aware… well, that’s more their problem than anyone’s, isn’t it?

      I’ve noticed something about massive shift, of all kinds: the old ways keep going, and going, and going, completely oblivious to the threat that’s brewing, until it is much too late and the threat has made them obsolete. Clay Christiansen wrote a very compelling series of books about this, and why it happens, starting with “The Innovator’s Dilemma.” If you haven’t read it, you need to read it!

  • danperezfilms

    Yeah, being a big company with a lot of customers and cash rich really sucks. And Generation Y is gonna show those old farts how it’s done.
    More generalizations.
    C’mon, Ted. Really?

    • http://twitter.com/tedcoine Ted Coine

      Dan, I can always count on you to defend the status quo. Then again, you can always count on me to rail against it, so I guess that means we’re two sides of the same predictable coin.

    • Ed Gutierrez

      Sorry Mr danperezfilms. I’m in my 40′s, have worked for a Blue Chip, a starter, and something in between. I have to side with Ted on this one. The industry I’m in is looked at as a Cash Cow, and at that the market share is fiercely competitive. We reinvented ourselves, and we are ahead of the pack. Noticeably so.

      • http://www.savvycapitalist.blogspot.com TedCoine

        Thanks Ed. Your real-life, in the trenches experience makes your endorsement quite valuable.

  • http://LeeSilverstein.com Lee Silverstein

    Ted,
    You nailed it. Another “sad state” that I’ve observed is big companies that chase the latest technology with absolutely no concept of how to “play in that sandbox.” Look at the number of companies that rushed to be players in social media only to do nothing, but “push” their message while having a total lack of understanding of how to interact with customers on these platforms.

    • http://twitter.com/tedcoine Ted Coine

      Thanks Lee. You’re right on the money about companies (large and small!) jumping on trends because they think the technology itself is the savior or “game changer,” rather than the use of that technology. Your example with social is right on the money, too! Broadcasting via your social channels makes it asocial media, doesn’t it? Just like the stuff we tune out so effectively with TV and radio ads, billboards, magazine ads, website banner ads, Facebook ads, Google search ads… Need I continue?

  • ahhprods

    So true. Before starting my bean bag biz, I was a process engineer and saw how bogged down large companies get- simple processes became illogical, and the employees were always frustrated but the companies were so large they weren’t flexible enough to make even the most logical changes!

    • http://twitter.com/tedcoine Ted Coine

      I love your career switch – that’s brilliant! Process engineer to bean bags. You’re living confirmation of the trend I’ve been following, which is going to make it into a post one of these days as “The End of the Enterprise.”

      But moving from your career change to your comment: Gadzooks, it’s so true! Organizations institutionalize processes in order to ease work, not as ends in themselves. Then, as soon as it’s a policy, good luck changing it or even skirting it as appropriate. It would be foolish of me to say that I hate large organizations (that’s far from true), or even that I hate bureaucracy across the board. But I will say, with no hedging or qualification at all, that I revile inflexibility. It will kill your organization slowly from within, as your most talented people leave, and your leftovers stay.

  • http://www.activo.com/ Ron Peled

    To some extent big companies with old mentality will go extinct but don’t forget that now Google, Apple, and Facebook are the large, cash reach enterprise. Do they see what you are writing? not so sure. Also take a look at what Marissa Mayer is doing with a big and cash rich enterprise… She will blow your socks off!

    So maybe you ought to look harder at what you refer as the characteristics of a dying company…

    • http://twitter.com/tedcoine Ted Coine

      Ron, I love a good challenge! Your comment actually speaks to my, “On the other hand….” This is what I see: large companies will always exist, but the way they’ll stay relevant is to buy smaller companies and absorb the innovative talent within. Their challenge, ongoing, is to keep the nimble innovators engaged (and even employed!) once they’ve bought the target company: a creative soul will often react to an M&A by leaving, and then what is the purchaser left with?

      I have worked with quite a number of enterprises in the past several years, and not a few bought and absorbed on a regular basis. One of the executives I worked with actually compared his company to Star Trek’s “Borg!” (It’s important to be able to laugh at yourself, and he was talented at this).

      As for Ms Mayer… at some point, I have to write about her. One thing she’s accomplished already, without question, is to remind us that Yahoo! still exists. I still haven’t figured out WHY they’re still in business, but more power to her if she can make them relevant again. Jury’s still out, methinks.

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  • Ed Gutierrez

    Wow. Great post. Easy read. And well said. This is true for most big companies. It really doesn’t get any clearer than this. If you are one of those big companies, and you’re about to become extinct, I suggest a cultural overhaul that you have to really believe in. If not, your employees won’t believe in it either. And one of the key ingredients; don’t be above acknowledging or working WITH anyone you employ.

    • http://www.savvycapitalist.blogspot.com TedCoine

      Thanks Ed – I’m 110% with you on the cultural overhaul. The best opportunity to effect that change is in the first 3-6 months of a new CEO’s tenure, when she still (presumably) has the backing of the board that just hired her, when she has just installed her new team throughout the C-suite, and when momentum, that great immeasurable yet all-important factor, is completely on her side.

      Strike while the iron is hot, as the saying goes. And act boldly, because you only get one chance at being brand new.

  • Stew

    Ted, this is just an inane rant. Bitter, opinionated, prejudiced, arrogant crap, completely void of substance.
    But, you’ve got it off your chest now; do you feel better?

    • http://www.savvycapitalist.blogspot.com TedCoine

      Stew, your comment was fun to read. Let me guess: you’re an enterprise leader; at the very least, you’re emotionally invested in the Old School, it seems. Thanks for visiting Switch and Shift. I’m not sure you’re going to like our community, though of course you may find you love to hate it.

      Best,
      Ted

      • Stew

        Hi Ted, glad you enjoyed the comment. I’m neither enterprise leader nor invested in Old School, your article was just bollox.

        Those inspired, engaged, ingenious folks in the garage of which you speak, could be tomorrow’s Microsoft, Apple, Amazon etc. all of whom, as I’m sure you’re aware, started off in garages and sheds. If today’s back-street entrepreneurs become tomorrow’s enterprises, will they then become subject to your vitriol?

        At what point does your garage-entrepreneur hero become the big-business villain – is there a definitive line?

        BTW. I’m criticising your article, not you personally. Why would you want to scrutinize me, rather than my comments? Ahh…I see – you’re wondering who this remarkably astute, dashing and daring stranger is; thinking I simply must find out more about him, so we can establish a partnership and conquer the world, for together we would be unstoppable!

        Fondest Regards,
        Stew

        • http://www.savvycapitalist.blogspot.com TedCoine

          Stew, thank you for connecting with me via email. As we discussed, I now completely get and do understand your desire to be somewhat anonymous.

          I have to write a followup post on big companies that live and breathe the human side of business, rather than the curse of the dinosaur I wrote about today. Here’s a short list of remarkable large companies that get it:

          Southwest Airlines, Virgin Group, Gore Associates, NetApp, SAP (from all I’ve seen thus far), Wegmans, Whole Foods… Okay, there are a whole lot more, but then no one will feel compelled to read my followup post.

  • http://www.frymonkeys.com Alan Kay

    Sounds like you are talking about how Apple now operates. Still, let’s
    be optimistic and trust that the CEO’s of large, ‘old’ organizations will soon
    realize that it’s not the hoard of dead cash that they are leading, but the
    opportunity to unleash the potential in their people.

    • http://www.savvycapitalist.blogspot.com TedCoine

      The current CEOs, or (more likely) their successors.

  • William Powell

    Love it Ted! I was talking about some things in my business today and the idea of “packaging” something came up. I nearly had a nervous episode. I can’t, in good conscience, take the message of people being the center and “package” it. It has to have a face that meets a face. Thanks for the reminder and the confirmation!

    • http://www.savvycapitalist.blogspot.com TedCoine

      It’s a real issue, isn’t it? I know of one really inspirational consulting company whose main clients lead compliance for their companies. Compliance. It strikes me as an unnatural fit – just the word “comply” makes me think of “doing what you must to stay out of trouble.” Yet I know this consulting firm gets it, and that they move well beyond that very low mark to something more transformative.

      Regardless, a face does indeed need to meet a face. And there is no reason on earth why a big company would be unable to make that happen. When they don’t, it’s a choice, not a law of physics.

  • http://custservicestories.blogspot.com/ barrydalton

    Ted,
    I look at this question a bit differently. And I think this is the root of the discussion in the comments here. IMHO it’s not about size. It’s about culture and leadership. Some of the comments here have danced around it. But the distinction must be specifically called out. There are examples of companies of all sizes that are disfunctional to the point where the best talent splits. The issues are different. But the result is the same…talent drain. The issues you outlined here are not the exclusive domaine of the Fortune 500. I’ve seen mid size companies experience the same challenges – overhead, stifling of creativity, etc. Where, as has been accurately called out here, some gigantic companies remain nimble, progressive, customer focused and innovative. It all comes down to the leader. The CEO. So, I would suggest that your post, in a manner of speaking, lets these CEOs off the hook. You’ve implied that its the size of their companies that is at the center of the issue, not them. Keep the thought provoking posts coming.
    Barry