Thursday, June 18, 2009

Working hard on a bad idea does not make it good

The difference between determination and stubbornness is a thin line that can result in either success or failure. Taking a bad idea and working it to death does not make an idea any better. Many leaders talk about the importance of perseverance, the "never say die "attitude. What many forget to mention is that if your idea is consistently not leading to the successful results you expect, then maybe it is just a bad idea.

I was invited by a friend (lets call him Vivek) who is the founder and CEO of a medium sized technology company, to observe their director's review of his organization. Their 2008 annual revenue was about US$300M, and like many companies, Vivek's company has also been hit by the tough economic situation and expects their revenue to be around US$ 220M in 2009. Like everywhere else, people are working overtime to figure out ways to "grow" the company more than it would normally.

As they went over the various changes they were instituting in the organization, I could not but help think of the agendas of the people behind these ideas. Two things struck me as the most obvious, the CEO Vivek was more interested in the technology and products that his company made, than in the company itself. The other was that the changes were being made to the only part of the organizational structure that was consistently successful with hard to argue success metrics.

True to the current theme of "why waste a good crisis" the management team was being restructured. The product development team now needs to go 3 levels deep before people with deep technical or market expertise could be found. The distribution channels were changed to be uniformly efficient globally, but in practice hardly effective in many parts of the world.

When I asked Vivek what he expected to gain from these changes, he was honest that from the products perspective he would continue driving the strategy because his top leaders did not "get it". And from a distribution point of view the people behind the change were unwilling to commit to more than 5% growth over the current estimates. As we talked he admitted than in 15 years this was the 4th time his product team was reorganized, and the 3rd time they attempted to change the distribution model. Vivek said that finally it always reverted to the current structure. This time Vivek was determined to make it work, so he did not expect my question "why change the organization" when similar changes did not work in the past. I suggested that maybe his idea was just bad. The clarity of the situation struck me when I saw his face; often in life we mistake stubbornness for determination. May be Vivek's company will be 5th time lucky! He clearly thinks that his determination will make his new structure work better.

In times of crisis there will be continuous demands for change. Many of these demands will be justified. Many will not. If you are in a position to provide direction to your organization, take a little time and understand the history of your organization, and the agenda of the current actors including your own agenda. This will help you differentiate between stubbornness and determination.

4 comments:

Yiannis said...

Well said Chandran, so many times change is initiated for the sake of itself, because its hard and people are resistant to it and because it is somehow perceived as necessary to survival. I believe the concept of adaptability / adaptation is probably a wiser mechanism. I stole this from one of our Vice Presidents who used Darwin and adaptation as a main theme in the current environment. The difference for me is that adaptation is a gradual process that adjusts to the real practical environment as opposed to being initiated from a 'vision' or 'management initiative'. However I fear that the whole political climate of today's crisis forces executives to be see to be 'doing something' that holds the promise of swift results. Even if the truth is that the historical evidence in every organization suggests that there are no easy answers and results take investment, good leadership and lots of painstaking effort (and time), this environment makes the 'quick fix' very seductive.

Anonymous said...

Zeena Fruitwala:
Agree with you. Most often success is sustained when you achieve goals through determination – you tend to carry your people along with you in the achievement.

Anonymous said...

Gopalakrishna Janardan:
smart, flawless execution with finesse is ingredient to sucess.
being persistent, bull headed without vision & direction is the killer ..... is that what you saying to man?

Anonymous said...

Girish Nair This is a chronic problem with many entrepreneur run companies. Like 'Vivek' they believe their 'ideas' have more value than it actually has. I liked your observation that 'Vivek" was more interested in his technology than in his company. So true!