Monday, January 22, 2007

when brutal facts become brutal reality

Here is an interesting follow up to Jessmy's smart post below on Intel's change in logo as a reflection of their renewed strategic empahasis. Among all the buzz about iPhone, I recall hearing that Apple will drop "computer" from their name.

Both of these seem to be real examples of "cosmetic" changes (brand/PR) reflecting strategic changes. Too often, it seems like folks make the cosmetic changes but fail to address the reality ("you can put lipstick on a pig, but it is still a pig"). Branding and PR often (to me at least) have the "lipstick" connotation.

In today's WSJ, Andy Grove channels Michael Porter to discuss how public policy can learn from business strategy. In "Thinking Strategically" (subscription required) He makes the point that while businesses are able to adapt and adjust, governments typically do not (or at least governemtns adjust much more slowly). He attributes this to a few qualities -- most noteably measurement and the ability to confront what he calls "brutal facts" (he uses a stagger chart to illustrate).

He notes:
Our nation's corporations have been under severe criticism for a variety of shortcomings. Even so, the capitalist/free-market system of corporations consistently produces results. When corporations do not produce, they become irrelevant and often perish. In other words, if the brutal facts are not faced by the leaders, the brutal reality sets in. By contrast, our national strategy-setting and -execution machinery often seem broken. Consider this: Could we pull off the Manhattan Project today? With its complexities of planning and execution, under extreme time pressure? I doubt it.

Fruit flies can teach us how to cure diseases in human beings. Why not study how businesses set strategies and execute them, and adopt the best methods to address the overwhelmingly important issues facing our society?

He is especially concerned about nations' (especially the US) ability to adjust to structural changes in the competitive environment (this is the Porter part) - particularly those changes that have the power to influence our future (like foreign oil). However, it is one thing to recognize the change and its importance it is another to confront it. Here is where the data becomes key. In talking about oil dependence he notes:
The most recent addition to this thread of commitments was when President Bush, in his 2006 State of the Union address, set a new goal to replace more than 75% of our oil imports from the Middle East by 2025. Even if we somehow achieved 100% replacement of all imports by that time, when we compare this goal with the one set by President Nixon in 1974, we see a 45-year slippage in the course of 32 years. Even though the importance of the energy independence issue has been recognized and emphasized by every president since 1974, our vital national objective is vanishing like a mirage in the distance.
We have made little progress because we have failed to measure and adapt to facts (this is what a business is structured to do very well). This takes discipline, courage and an aversion to "lipstick" (not that there's anything wrong with it...)


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