Over time, as a company grows, the skills and systems that made the company and spawned the original success can be the Achilles heel of the company’s future growth. In Corning’s case, it was a brilliant discovery that spawned colored television which eventually left them arrogant and unresponsive.
Author and turnaround specialist Kenneth Freeman tells a story of Corning Television Glass division which had developed the glass used in color televisions forty years previously1. After forty years Corning TV Glass was still riding on the laurels of their initial success. Needless to say with few upgrades over forty years customers weren’t pleased and they actively started to look for other suppliers. The numbers were showing a declining business and several new divisional CEOs had been brought into fix the problem. At the time the core management team wasn’t seeing an issue. They didn’t believe that customers were unhappy and simply refused to review anything that suggested that their products were less than the very best. They said to the latest CEO, “You’re our third CEO in five years… you’re telling us the customers are going to walk away. We’ve outlasted the last two guys who told us that. Why should we believe you?”
To get management’s attention the new CEO shut the factory down for nine days and over that same period he invited Corning’s customers to the factory to tell management all that was wrong with them. The customers told the management team that if they thought that they could continue to get by with poor quality they (the customers) would figure a way to get by without Corning as a supplier. To their credit both management and employees listened to the customer’s plea and started to work together to improve service and product quality and turned the business around.
Once managers come to realize there is a problem or will be a problem in the foreseeable future, it is important to get the company to move forward. Freeman suggests creating a “blueprint” (a strategy document) to focus everyone’s energy. He states “it typically fits on one page and clearly outlines the game plan”. It is in a format that can easily be shared with everyone and provides a consistent method of communicating the company’s vision to both customers and employees. It includes:
- Company values: values and behaviors that ideally will be in place forever.
- Vision and mission: two simple, memorable sentences that describe, respectively, where the company should be in five to 10 years, and in three to five years.
- Strategic goals: goals to be achieved in the next couple of years.
- Specific actions to achieve each of the strategic goals, with clear metrics and accountabilities.
Hopefully you won’t need to shut down your operations for nine days to get your management team’s attention but understanding the problem is always the first stage to recovery. Arrogance, complacency, and corporate traditions can all cause businesses to lose focus on their customers. Often the skills and systems that brought you the initial success are not the same skills and systems needed to take your business to the next level. Once a problem is detected and understood by all, build a strategy, communicate it and act on it to maintain your position of leadership in your market.
1. Why Wait for Trouble? by Kenneth W. Freeman