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Saturday, December 19, 2009

THIS MIGHT HURT: DENIAL - How Successful Businesses Become Failures



THIS MIGHT HURT...
“Words are Tools; Words are Weapons.” – Douglas Castle

This Article written and © by Douglas Castle and originally published in THE NATIONAL NETWORKER™ Newsletter. All rights reserved. This article may be reproduced only in its complete form, inclusive of all hyperlinks, with full attribution to both the author and to the publication. For information about the author, go to Linked In/ Douglas Castle or to Douglas Castle’s Blog ; for information about the publication, go to THE NATIONAL NETWORKER™ Newsletter.
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DENIAL - How Successful Businesses Become Failures

Dear Readers:

My friend and oftimes worthy adversary, Gabriel Siegel (founder of the now-famous Westchester-Putnam Guitar Society), wrote me a letter expressing some of his thoughts on the precipitous and tragic decline of the US Automotive Industry, citing GM as the prophetic example. His letter is re-printed below (edited for the purposes of this publication):

I was surprised (but not shocked) to learn that the president of GM was forced out.



For many years, GM (as was the rest of the automotive industry) was the ultimate in insular, inbred and ossified management. They lived in constant denial of the Japanese encroachment into a market they considered exclusively theirs.


Maybe the question we should be asking is at what point do the Boards of Directors of these companies realize that failure is imminent unless fresh thinking is introduced. IBM and Xerox realized that their futures were doubtful unless new CEO s - without industry experience-were bought in to redirect the company.


When I would visit my mother in Brooklyn, on each trip I would notice subtle changes in the neighborhood. The 2 fine men's clothing stores were no longer there. The corner grocery store was gone, replaced by an ethnic supermarket. The population was different; people of color and of Russian descent. The three major synagogues were closed or converted to other denominations. Yet, my mother couldn't (or wouldn't) see the change.


Have we become a society where the worship of the status quo is allowed to over rule the need for reevaluation?


I hope that GM doesn't replace its president with another GM insider. But the acid test, yet to be graded, is whether or not they sell more cars.


- Gabe
####

As businesspersons, industrialists, professionals and leaders, we are constantly faced with changes in our operating environment. These include a host of variables including rising/falling interest rates, capital availability, emerging competition, consumerism, technology, availability of supplies, market demand, government regulations, ideologies...to name several. All Human Beings are frightened by the notion of change. But our fears must be kept in perspective and must be addressed.


There have always been and there will always be changes in our world.


Some of these are within the scope of our control, and some are outside of our control. In these latter cases, we must make changes in the way in which we do business in order to survive - we must make adaptations to adjust to a dynamic environment. The world does not wait for us; it is in a constant state of transition. As I've mentioned countless times before (more than 30 times, at least), we always have a choice. We can either learn to surf or be crushed by the tidal wave. Ignoring the rapidly rising ocean is not a viable option.


Denial and increased insularity make us victims instead of champions of change. Reality cannot be wished away -- it always must be dealt with, either sooner or later. Recognizing the need to change and acting on that recognition after an assessment of options and strategies are powerful survival skills.


If blind pride, indolence and contentedness are permitted to become part of our business attitude, we will ultimately fail. It is only a matter of when.


If we insulate and isolate ourselves from communication and interaction with the outside world, new ideas (from our employees, our consumers, our suppliers, "outsiders," the news media), other industries (even if they are not directly related to our own), other cultures and voices, we are not only ceasing to grow -- we're beginning to die.

We need to watch trends, to engage in contact outside of our own "inner circle", to entertain new ideas, to experiment, to be open-minded, lest we permit ourselves to become irrelevant or extinct.

In the case of General Motors, the other question I was prompted to ask after having received Gabriel's correspondence was this:

Is GM just making a primitive sacrificial gesture (i.e., making a burnt offering of a high-ranking executive) for public relations or other purposes, or is it actually taking an action to change its course?


If this firing was a superficial gesture of appeasement to any third parties who happen to be watching, then nothing will change. If, on the other hand, this firing is intended to make room and make way for a change in course and culture, then the results will become apparent when (or if) GM starts to sell more cars.


What's that I hear you saying? But you're not in the automobile industry?

If you cannot learn from GM's example, then please either 1) read this article again (to gain some comprehension), or 2) make an appointment with your taxidermist.

Faithfully,

Douglas Castle

For more information, please visit Douglas' TNNW Bio.


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