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Hank Moore

The Big Picture of Business – Think Tanks to Strategize

The biggest problem with business, in a one-sentence capsule, is:

People exhibit misplaced priorities and impatience… seeking profit and power, possessing unrealistic views of purpose, and not fully willing to do the things necessary to sustain orderly growth and long-term success.

What organizations and individuals started out to become and what we’ve evolved into being are decidedly different things. The path toward progress takes many turns, expected and unexpected. How we evolve reflects the teachings, experiences and instincts which are not part of formal education.

Pressures continue and accelerate for companies to stay in operation, become competitive, keep ahead of the marketplace and perform quality work. Businesses of all sizes are besieged with opportunities, competing information sources and large amounts of uncertainty.

Executives are not fully prepared to handle challenges of the moment, much less to begin developing Big Picture thinking. Seasoned executives face burnout daily. Much of the workforce is in transition, with unclear anchoring of where they’ve been and where they could head. Young and mid-level workers do not really know what it takes to succeed long-term and are, for the most part, impaired from optimum achievement.

Failure to prepare for the future spells certain death for businesses and industries in which they function. The same analogies apply to personal lives. Greater business awareness and heightened self awareness are compatible and part of a holistic journey of growth.

I mentor business principals on all their options and the big ideas. I lay the groundwork so they can best utilize the niche consultants. I support all of the others and educate business owners on the best contexts to make consultants most effective.

There are seven levels of strategy retreats and processes in which companies can engage, with #1 being a starting point and #7 being the ultimate outcome:

  1. Information Sharing. What’s new in the marketplace. What the competition is doing. New ways of looking at the core business.
  2. Reacting to a Crisis or Emergency. Responding to crises is a good way to get in the research-planning habit. Preparing for crises helps avert 85% of them.
  3. Niche Review. Some phase of the business requires re-evaluation.
  4. Growth Strategies. How and where to grow. Concepts of orderly growth. Dynamics of growth, in relation to other organizational factors.
  5. Planning for the Future. Planning, vision and strategic direction account for 15% of an organization’s full picture…constituting the trunk and roots of The Business Tree™. The company that does not plan will not achieve staying power.
  6. Visioning. Determining what the organization will become.
  7. Change, Growth. Determine how the organization will get where it needs to go. Creative thinking about new approaches. Develop a true corporate culture.

7 Levels of What Companies Do with Think Tanks:

  1. Don’t understand the concept (confuse it with selling or training).
  2. Hold when the company is at a crossroads.
  3. Realize value and merit.
  4. Want to know and learn more. Eager to hold, assess and apply.
  5. Do something with it. Put findings to good use.
  6. Want to do more and evolve the business to higher plateaus.
  7. Change-Growth. Achieve advantages via knowledge. Make impacts on company future.

What Is a Think Tank:

  • Source of new ideas from outside speaker-presenter (as opposed to a training facilitator).
  • Common sense reminders of things people already know.
  • Inspiration to try new things and be successful.
  • Injecting Big Picture thinking into each part of the organization, macro over the micro.
  • Inspires the development of organizational Vision.
  • Realistic views or company strengths, weaknesses, opportunities and threats.
  • Study of external forces that can hamper your ability to do business.
  • Mentorship and leadership development.
  • Outside-the-box approaches to old problems.
  • Creative learning that helps executives think new ways.
  • Ways to understand the organization’s people (its best resource) better.
  • Common sense updating of old principles, with Futuristic viewpoints.
  • Puts the demands of the moment into perspective.
  • Takes Futurism out of the esoteric and into cohesive applicability.
  • Converts learning to knowledge…and knowledge to wisdom.

What a Think Tank is NOT… and Should Not Be Confused with Being:

  • Training. Political fund raising.
  • Sales or marketing support. Facilitated gripe session.
  • Bean counter approaches to processes. Ivory Tower academic exercise.
  • Internally conducted goal-setting workshop. Intellectual elitism.
  • Brokering of ideologies and hidden agendas. Research.

This program will accomplish the following:

  • Help small businesses of any size focus more clearly on their niche, strengths, weaknesses, opportunities and threats.
  • Apply Big Picture thinking toward all facets of the organization… to reduce costs of companies responding to problems with small-picture treatments.
  • Reduce costly organizational problems with planning on the front end.
  • Provide business owners with a totally different perspective on how they can operate and be more successful.

Visioning is the process where good ideas become something more. Visioning is a catalyst toward long-term evaluation, planning and implementation. Visioning is a jump-off point by which forward-thinking organizations ask: What will we look like in the future? What do we want to become? How will we evolve? Vision is a realistic picture of what is possible.

Organizations will succeed by having, communicating and garnering support for a Shared Vision. Visioning sets the stage for necessary processes, such as growth strategies, re-engineering, training, enhancing shareholder value and organizational development. Without visioning, other functions (marketing, human resources, financial, production, quality control, public relations, etc.) are simply performing band-aid surgery.

The Strategic Plan comes off the shelf and alive into action by being relative to all levels of the organization:

  1. Resource. Equipment, tools, materials, schedules.
  2. Skills-Tasks. Duties, activities, tasks, behaviors, attitudes, contracting, project fulfillment.
  3. Role-Job. Assignments, responsibilities, functions, relationships, accountability.
  4. Systems-Processes. Structure, hiring, control, work design, supervision, decisions.
  5. Strategy. Planning, tactics, organizational development.
  6. Culture-Mission. Values, customs, beliefs, goals, objectives, benchmarking.
  7. Philosophy. Organizational purpose, vision, quality of life, ethics, longterm growth.

Organizational and Business Planning

  • Questions to ask the organization… basis for budgeting.
  • Guidelines for re-examing the business position…criteria and benchmarks.
  • The 10 most common benchmarking mistakes.
  • Guidelines for conducting Strategic Planning.
  • Steps, processes and methodologies encompassed in longterm Strategic Planning.
  • Benefits of Strategic Planning.
  • Big Picture Visioning issues and dynamics.
  • How to make the process productive in the longrun.

About the Author

Hank Moore has advised 5,000+ client organizations worldwide (including 100 of the Fortune 500, public sector agencies, small businesses and non-profit organizations). He has advised two U.S. Presidents and spoke at five Economic Summits. He guides companies through growth strategies, visioning, strategic planning, executive leadership development, Futurism and Big Picture issues which profoundly affect the business climate. He conducts company evaluations, creates the big ideas and anchors the enterprise to its next tier. The Business Tree™ is his trademarked approach to growing, strengthening and evolving business, while mastering change. To read Hank’s complete biography, click here.

Hank Moore

What Really is The Big Picture of Business

The biggest problem with business, in a one-sentence capsule, is:

People exhibit misplaced priorities and impatience… seeking profit and power, possessing unrealistic views of purpose, and not fully willing to do the things necessary to sustain orderly growth and long-term success.

What organizations and individuals started out to become and what we’ve evolved into being are decidedly different things. The path toward progress takes many turns, expected and unexpected. How we evolve reflects the teachings, experiences and instincts that are not part of formal education.

Pressures continue and accelerate for companies to stay in operation, become competitive, keep ahead of the marketplace and perform quality work. Businesses of all sizes are besieged with opportunities, competing information sources and large amounts of uncertainty.

Executives are not fully prepared to handle challenges of the moment, much less to begin developing Big Picture thinking. Seasoned executives face burnout daily. Much of the workforce is in transition, with unclear anchoring of where they’ve been and where they could head. Young and mid-level workers do not really know what it takes to succeed long-term and are, for the most part, impaired from optimum achievement.

Failure to prepare for the future spells certain death for businesses and industries in which they function. The same analogies apply to personal lives. Greater business awareness and heightened self-awareness are compatible and part of a holistic journey of growth.

The term Big Picture is often used but rarely applied correctly. If one believes vendors and niche consultants, the Big Picture is what their specialty is. It may be: human resources, organizational development, training, technology, sales, marketing, advertising, public relations, coaching or financial management. Few of those have actually written Strategic Plans and do not really comprehend what the Visioning process actually is.

Thus, few in business know how to frame, craft and sustain a Big Picture of business. There are reasons:

  • Niche consultants say that their niche is The Big Picture, and the uninformed accept that.
  • Vested interests have a stake in keeping certain niche consultants in the driver’s seat.
  • Business school education is limited and behind the times.
  • Fear of change forces people to go to extreme lengths to defend their turf.
  • Spin doctors mine the fear and represent the vested interests of niche service providers.
  • People in business are so overwhelmed that they do not know any better.
  • A great many people set up barriers to learning anything more than is what is on their radar.

Businesses usually stop growing because they have failed to make investments for future company success. Rather than plan to grow and follow the plan, they rationalize organizational setbacks, excuse poor service or quality, and avoid change, all the while denying the need for change and avoiding any planning. Too often, they rely upon what worked for them in the past, on buzzwords, and on incomplete strategies. We’ve all seen businesses in which a paralysis creeps in, keeping them from doing anything at all.

A growth plan or strategic plan is essential for any organization that intends to survive and thrive in today’s rapidly changing business environment. Companies need to heed messages from the marketplace telling them of changing market conditions, new global business imperatives, new partnering concepts, recognition of new stakeholders, and other changes outside of their influence that may profoundly affect them.

These are the points at which a company must conduct a planning retreat to assess its own Big Picture and chart the process forward:

The Big Picture

  • The organization is not now what it started out to be.
  • There seems to be a need to change the direction of the organization.
  • No Vision was actually created…the organization just rolled with the flow.
  • Management is concerned that resources are not concentrated on important things.
  • Management of the organization seems tired or complacent.

Growth

  • Management is cautious and uncertain about the company’s future.
  • The company has grown too rapidly.
  • No-growth or slow-growth has occurred.
  • There is a need to step up growth and improve profitability.

People-Productivity

  • Apathy, low productivity and discord are exhibited.
  • Management seeks perspective and needs to be recharged.
  • There is a need to develop better information to help management make better decisions.
  • Individuals are more concerned about their own areas than for the overall organization.

Processes

  • There is a sense that company operations are out of control.
  • Management expresses a need for better internal coordination of company activities.

External-Marketplace

  • External forces threaten the status quo… and open up new opportunities.
  • The environment in which the organization competes is rapidly changing.

Did you ever wonder why some people have good ideas, and others make them succeed profitably?

Would it surprise you to know that one third of your efforts, money and resources will go toward reducing problems in your business this year? And if you don’t tend to issues as they occur, your high costs could multiply as much as six times per year.

Small business owners need all the tools they can get. Big corporations don’t have all the answers. Small businesses, in reality, have more flexibility to do something well and be more successful more quickly.

What Big Picture Growth Strategies Programs Accomplish:

  • Prestige or favorable image… and its benefits.
  • Promotions of products and sales.
  • Good will of the employees.
  • Prevention and solution of labor problems.
  • Fostering the good will of communities in which the company has units.
  • Good will of the stockholders, board of directors, and owners.
  • Overcoming misconceptions and prejudices.
  • Good will of suppliers.
  • Good will of government.
  • Good will of the rest of your industry.
  • Attraction of others into the industry.
  • Ability to attract the best personnel.
  • Education of the public to the purposes and scope of the product.
  • Education of the public to a point of view.
  • Good will of customers (and their friends and colleagues).
  • Seeing that the industry is properly represented in the curricula of schools and colleges.
  • Assisting educators in teaching about the industry.
  • Creating public support for legislative proposals that the industry favors or public opposition to legislation that it opposes.
  • Obtaining public recognition for the social and economic contributions that the industry makes to the nation.
  • Addressing outside interference or competition with the industry.
  • Public understanding of the regulation of the industry by the government, in order to assure equitable regulation.
  • Consumer understanding of how to use the product.

Expected Results:

  • Your service is efficient and excellent, by your standards and by the publics. You are sensitive to the public’s needs, and you are flexible and human in meeting them.
  • Your staff is likeable and competent. They demonstrate initiative and use their best judgment, with authority to make the decisions they should make.
  • You have a good reputation and are awake to community obligations. You contribute much to the economy. ou provide leadership for progress, rather than following along.
  • You always give your customers their money’s worth. Your charges are fair and reasonable.
  • You employ state-of-the-art technology and are in the vanguard of your industry.
  • You provide a good place to work. You offer a promising career and future for people with ideas and initiative. Your people do a day’s work for a day’s pay.
  • The size of your organization is necessary to do the job demanded of you. Your integrity and dependability make the public confident that you will use your size and influence rightly.

Conclusions and Opportunities

Here are 15 sure-fire steps to begin putting this information to immediate use in your business.

  1. Business cannot exist in a vacuum. You must put everything that you produce into a Big Picture context.
  2. Recognize that there is a Big Picture, and be skeptical about niche consultants and vendors who purport that their approach is the only one.
  3. Choose your advisors very carefully. Insist that they benchmark everything they do for you toward a Big Picture of your business.
  4. You must have both a Sales Plan and a Marketing Plan as sub-sets of your Strategic Plan.
  5. Advertising is a process, part of marketing and a cousin of sales. Running an ad here and there does not constitute advertising.
  6. Have concurrent programs in your plan, including direct marketing, sales promotions, advertising, internet presence, specialty advertising, public relations and other marketplace presence.
  7. Running a small business is tough. You cannot be a Lone Ranger. Develop a support system of friends and colleagues. Surrounding yourself with employees and consultants is not enough.
  8. Always think about new products to create.
  9. Never stop changing. Change is 90% positive. Every person and company changes 71% per year anyway. You might as well benefit from it, rather than become a victim of it.
  10. Find ways to measure the success of every new initiative that you adopt.
  11. Use my Business Tree as a way of always looking at the whole of any situation… then at the parts…and back to the whole again.
  12. You never stop paying dues. It doesn’t get easier… yet, creative opportunities create more successes.
  13. Take ownership of planning programs, rather than abdicate them to human resources or accounting people.
  14. Predict the biggest crises that can beset your company. 85% of the time, you’ll prevent them from occurring.
  15. Challenge yourself to succeed by taking a Big Picture look… while others are still thinking and acting small-time. Your biggest resource is a wide scope… and the daring to visualize success and then all of its components.

About the Author

Hank Moore has advised 5,000+ client organizations worldwide (including 100 of the Fortune 500, public sector agencies, small businesses and non-profit organizations). He has advised two U.S. Presidents and spoke at five Economic Summits. He guides companies through growth strategies, visioning, strategic planning, executive leadership development, Futurism and Big Picture issues which profoundly affect the business climate. He conducts company evaluations, creates the big ideas and anchors the enterprise to its next tier. The Business Tree™ is his trademarked approach to growing, strengthening and evolving business, while mastering change. To read Hank’s complete biography, click here.

Hank Moore

The Big Picture of Business – Sayings, Meanings and Interpretations

This essay uses grammar as an analogy for looking new ways at how business is conducted. Strategy development requires the mining the gold within any organization and seeking new outcomes via creative applications of ideas.

Times of crisis and economic downturn get people thinking differently about the conduct of business. Organizations say that they need to re-evaluate and get back to basics, that nothing is guaranteed. They realize that the old ways of doing business will no longer work. They seek to better themselves as professionals and to rethink the business models. Changing times require new perspectives.

For some, these are stark new approaches. This is the reality in which the small business and entrepreneurial worlds have always experienced. Welcome to the paradigms that many of us have operated under for some time.

Accepting change as a positive guiding principle, one then seeks to find, analyze and apply fresh approaches toward addressing the old problems. For many, times of crisis mandate that they think boldly and get used to doing business that way henceforth.

This essay is an exploration into the creativity, the opportunities and the potential rewards of reflecting differently upon business. Our intention and the experiences of many companies who have followed the model presented here is that organizations must now learn how to paint their own ‘big pictures’ of business, rather than focusing upon certain niches. They benefit from change, while the non-change stagnates become additional casualties.

Punctuation changed the meaning of this telegram to a business associate:
Have discovered oil on your property. Nothing but good luck to you.
Have discovered oil. On your property, nothing. But, good luck to you.

Fish is one of those rare multi-purpose words that is used as a noun, verb, adjective and adverb.

  • Let’s have fish for dinner.
  • Are you fishing for an answer?
  • This has a fishy taste.
  • Something smells fishy.

Bar has numerous meanings and is used as a noun, verb, adjective, adverb and preposition.

  • Raise the bar. (increased standards of quality, measurement)
  • Stand by the bar. (piece of furniture, a counter)
  • Visit the bar. (place of business where alcohol is served, nightclub)
  • Pass the bar exam. (qualification to practice in the legal profession)
  • Bar someone from doing something. (ban, prohibit, exclude or prevent)
  • Bar coding. (price verification, inventory control)
  • Bar none. (unlike any other, unsurpassed)
  • Bar in the courtroom. (railing that encloses the judge)
  • Bar bells. (weights for physical training)
  • Bars as accent materials. (used in construction)
  • Bars of music. (contents of notes and accents)
  • Barring elements together. (fasting, joining)
  • Put someone behind bars. (sentenced to jail)
  • Bars on a uniform. (metal strips, connoting military service)
  • Bars on the windows. (metal pipes, for safety and protection from intruders)
Older Name for It Modern Name for It
Parasol Umbrella
Ice box Refrigerator
Horseless carriage Automobile
Constantinoble Istanbul
Yugoslavia Kosovo
New Amsterdam New York
French Indochina Vietnam
Pocketbook Purse
Handbag Backpack
Stove Range
Toilet Commode
Toilet paper Bathroom tissue
Tin foil Aluminum foil
Refuge receptacle Trash can, garbage can

 
Concepts which have changed names over the years…

  • Peep show | film arcade | silent films | talkies | movies | cinema | video
  • Mexican | Chicano | Mexican-American | Hispanic
  • Soda | fountain drink | ‘coke’ | pop | soft drink | mixer | diet drink
  • Janitor | custodian | sanitation engineer
  • Washroom attendant | maid | domestic | steward
  • Housewife | homemaker | domestic engineer
  • Sheriff | marshal | constable | bobby | COP | law enforcer | peace officer
  • Militia | rangers | soldiers | battalions | regiments | army | military forces | peace keeping forces

Categories of Words and Terms

  • Anomaly – Something different, irregular, of uncertain nature, peculiar or not easily classified.
  • Contronyms – Words that have opposite meanings, depending upon usage.
  • Heteronyms – Words that are spelled identically but have different meanings when pronounced differently.
  • Oxymorons – Combination of contradictory or incongruous words…pointedly foolish.
  • Paradox – A tenet that is contrary to expectation or received opinion. Self-contradictory statement that at first seems true. Something with seemingly contradictory qualities or phrases.
  • Pleonasms – Two concepts (usually two words) that are redundant….needless repetition of an idea in a different word, phrase, or sentence.
  • Homonyms – Words pronounced alike but different in meanings, connotations or significance.
  • Synonyms – Words with the same or nearly the same meanings.
  • Antonymns – Words with opposite meanings.
  • Homograph – One of two or more words spelled alike but different in meaning or pronunciation (as the bow of a ship, a bow and arrow)

Sound similar…but different meanings…

  • Arthur – Author
  • Gorilla – Guerilla
  • Mussel – Muscle

Spelled the same…but different meanings…

The word “set” has more definitions than any other word in the English language.

Homonyms – Words pronounced alike but different in meanings, connotations or significance.

  • Ant is an insect. Your aunt is a relative
  • Bat is sports equipment in baseball. A bat flies around in the dark
  • Chips are units of snack food (potato, corn). Chips are components of computers

Business Meanings Via the Perspectives of Words…..

  • To most people, the milkman brings bottles of milk products to your door. (At least, they did in the old days.) On the farms, the milkman is the one who takes cans of milk away to the dairy.
  • Marketing can be either inward or outward. Companies undergo marketing campaigns to promote products and services to potential customers. Those same consumers do their own marketing when they shop at grocery stores.
  • People define music according to their personal tastes, experiences and backgrounds. What may be entertainment to one person may be noise or objectionable content to another. Music to one’s ears is defined as what they want to hear or choose to acknowledge.
  • Service is a term that constitutes more hype than actual practice. Companies say they pride themselves on customer service. In reality, they see service as a sales vehicle or an add-on product. When customers ask for non-paid service (politeness, consideration, follow-up, manners), that’s a totally different situation, and they are often disappointed. Sadly, customer service in business is poor, declining or nonexistent, per company.
  • Change is a wonderful phenomenon that people hate and fight to their detriments. Research shows that change is 90% positive and that people and organizations change at the rate of 71% per year. Yet, out of fear, they fight, resist and are combative toward change and to those who are change agents. It is inevitable, and one should benefit from change, rather than become a victim of it.
  • When some people hear the term consultant, they run. Research shows that only 2% of all consultants are really veteran business advisors. Most consultants are vendors who sell packages of products and services, displaced executives, computer vendors or people in transition. There really is an art to quality consulting, which requires years of experience, finesse, discipline and talent to amass…few have it.
  • Futurism is seen as an esoteric term. Some say they have no control over their destiny. In reality, thoughtful planning for future eventualities enables one to prevent tragedies 85% of the time. Futurism is a series of thinking and reasoning skills, backed by planning. To deny, ignore or fight the future is foolhardy. To prepare for it means steady growth and success.
  • Diversity is a concept that encompasses ideas, cultures, philosophies and behaviors. Sadly, some people see diversity as a punishment, when associated with training. To the contrary, it is a gift because all of us are living examples of diversity.
  • Technology is a tool of the trade, not an ideology or a mantra. Some people mistakenly believe that technology creates the future, or they are willing to abdicate control of their own destinies to outside forces. Such an extreme position is not fair to technology because it sets up mechanical processes to get blamed later for thinking not done today. Thought processes need many avenues in which to be successful. Thereafter, tools of the trade (including technology) may be applied.
  • Food is a means of survival for some…a base source of nutrition, sustenance and nourishment. Food becomes a creative expression of artistry for gourmets. For many people, food equates to a reward system. Mealtimes are prime business development and networking events. Social occasions have quality food and beverage components.
  • Transportation is necessary to get people from here to there. Transportation is a vital component of the economy…conveying goods throughout intricate networks to marketplaces. Transportation is a status symbol to some people.
  • Business is a livelihood for some. It is a cut-throat game for others. It is a creative expression for still others. For most people, the team becomes an extended family. Business is really a grouping of wants, needs, objectives, outcomes and much more. The way in which priorities and stresses are juggled depends upon how successful the business becomes.
  • Communication is something that all of us utilize, yet is one of the most misdirected concepts. Many people see communication is a one-way process…it is only effective if it is two-way and continually refined. Many businesses put out messages that they want to be heard, yet do not test for effectiveness of messages received. Many organizations seek out response from audiences, and many others set roadblocks to dissenting messages getting within earshot. Communication is the barrier that causes misunderstanding, strife, unrest and productive shutdown in organizations. Depending entirely upon the mindset of human beings in charge, communication can also be the “breath of fresh air” or information source that widens opportunities for understanding, action, support and interactive participation.

About the Author

Hank Moore has advised 5,000+ client organizations worldwide (including 100 of the Fortune 500, public sector agencies, small businesses and non-profit organizations). He has advised two U.S. Presidents and spoke at five Economic Summits. He guides companies through growth strategies, visioning, strategic planning, executive leadership development, Futurism and Big Picture issues which profoundly affect the business climate. He conducts company evaluations, creates the big ideas and anchors the enterprise to its next tier. The Business Tree™ is his trademarked approach to growing, strengthening and evolving business, while mastering change. To read Hank’s complete biography, click here.

Hank Moore

The Big Picture of Business – Business Lessons to be Learned from the Enron Scandal

This is my own Big Picture full-scope analysis of the Enron debacle. It far transcends financial analysis made by other people.I have been carefully observing Enron with interest since 1984 and have seen the trouble coming for most of those years. The company cried ‘case study’ from the very beginning, when it segued from the former Houston Natural Gas moniker. I have been chagrined as to why people could not or would not see through the facade. But, human nature being what it is, people are more easily duped than they are taught to appreciate the attributes of quality and substance.

I once had a client who felt that he owed Ken Lay a favor. Thus, when Lay (CEO of Enron) was chairing a charity drive, Lay asked for 100% participation from the client’s firm, and the client reciprocated by edicting donations from his 200+ employees. This client was a prime example of a leading CEO who served his community, profession and firm well. Lay was the outsider who wanted status with the downtown CEO clique.

I thought that demanding participation in one person’s pet cause was too punitive to the company’s employees and told the client so. I further made recommendations that future charitable requests would go through committee and that the client’s partners and key executives were better suited by serving on community boards, thus polishing their own luster. The company’s emphasis shifted from making ad hoc contributions to chunks of time, whereby the firm got recognition, the partners became better leaders, and the community benefited from their expertise.

In the ensuing years, I saw Lay get lots of community credit, but his other executives and friends in different companies who aided the causes rarely got billing. For a period of time, Enron had an excellent foundation that steered it toward important community activities. Yet, when the company shifted from being an energy supplier to the hucksterish energy trader, the charitable activities were dispensed with. So were professional development programs, rewards for random acts of kindness and other empowerment initiatives.

Executives never stayed long. Enron routinely fired 10% of its top salaried people each year, fostering a lean-and-hungry spirit among producers of business.

The Enron scandals of 2001 and 2002 focused only upon cooked books audit committees and deal making. There was so much more to look at… from the perspective of learning from the trouble and inspiring other companies to more forward.

Enron’s debacle can serve all of us with lessons learned. Within that spirit and out of respect to many fine professionals who tried to save that company, I offer this analysis. These are my considered opinions, having conducted Performance Reviews, Strategic Planning and Visioning for other companies over 35+ years. I never worked for Enron… they never would have related to my Big Picture of business scope. I would have asked too many tough questions, and that was not what they wanted consultants for.

These observations are intended to contextualize the Enron case studies in broader terms than were reported in the news media:

  1. Conditions Which Allowed It to Occur. The pivotal event was the passage of the Securities Reform Act of 1995, also dubbed the ‘Securities Rip-off Act.’ Corporations lobbied for and got major loopholes and a relaxed posture on the part of the Securities & Exchange Commission. As a result of that act, the SEC is no longer a watchdog but is a sideline to brokerage houses and major financial institutions. In my opinion, deregulation, as a whole, has worked negatively upon business and society (banking, airlines, trucking, and broadcasting), and the SEC is no exception.
  2. Congressional Hearings. It was a public and media curiosity, though becoming a good opportunity for the public to understand business better. Many of those investigating Enron had received campaign contributions from the company, yet kept maximum objectivity. Several committees competed with each other for the spotlight. After the hearings, there was little follow-through. Granting immunity often sets dangerous precedents, making it hard to get the complete truth. While frying some fish, immunity lets other more culpable ones off the hook.
  3. Corporate Culture. At Enron, it was dictatorial and repressive to new ideas. It was very ‘old school’ (a management style that was 40 years obsolete), though it pretended to be ‘new school.’ It fostered a false sense of security for employees, paying higher salaries than the marketplace, thus keeping employees dependent upon the system via golden handcuffs. It demanded blind loyalty, hired ISTJ personality types for support and rewarded dogmatic sales types for trading deals. Employees were expected to live the same ways (even in the same neighborhoods) and have common outside interests, with little individuality.
  4. Core Business. Enron (like many other companies) got into areas beyond their core competencies. They got into business ventures on whims or for flashy reasons, utilizing concepts that were untried.
  5. The Deals. The company did more than 4,000 deals…most risky and without research, planning and benchmarking. Stock was transferred to partnerships simply to lock in gains on balance sheets. Many deals were put on the books in order to inflate the price of Enron stock, which the insiders sold at peak price levels. The audit committee of the board would not sign off on behalf of the deals, which just kept happening and developing secret lives of their own.
  6. Attitude with Suppliers and Vendors. They took posture that nobody could say ‘no’ to Enron and that suppliers and vendors work with Enron on their terms only. The attitude was non-collaborative, with business units acting as Lone Rangers and often in competition with each other. There were no checks and balances for members of the supply train. This archaic mindset flies in the face of progressive supply chain management, which successful companies now embrace.
  7. Communications. They were secretive and guarded from the beginning. The manner in which company and unit name changes were handled exemplified a non-communicative executive suite, with lack of media or public access to top management. Spokespersons were not media-trained, nor media-friendly. The company issued everything through written news releases. No on-camera interviews were sought or granted No pro-active corporate communications campaigns were ever waged. The Annual Reports carried and permeated this communications aloofness. The way the California energy crisis was handled speaks to Enron’s disdain for media openness.
  8. The News Media. Though it took a field day with the Enron story, the media itself had played a part in crowning Enron as the king in previous years. In absence of substantive business reporting and asking the tough questions, the media tends to pander to the hype and flash that the companies themselves dish out. Financial media indeed bought and published Enron’s version of the story without checking as far as journalists have recently.
  9. Concept of Examining the Company. Bean counters set the perimeters at Enron and ran the company. The term ‘audit’ is too micro-niche and limited. Companies should be doing full-scope Performance Reviews. Without Strategic Planning, there is no benchmarking of specific tactics. When goals are only in financial terms, the company is disproportionately lopsided.
  10. Accounting. Enron paid too much for outside auditing services. ($1 million per week) Every company should re-examine its major professional services relationships every five years, take competitive bids (especially from talented mid-sized firms) and look at options available from service providers. Enron did not demand enough accountability, fairness, ethics and operational autonomy from its outside auditor.
  11. The Auditing Firm Employed by Enron. In their marketing, accounting and auditing firms claim to be full-service business advisors, in order to get business. In reality, audit, tax and management consulting services rarely communicate and are, in fact, competing business profit centers within large firms. Enron’s auditor says its scope was limited, when, in fact, it should have been as full-scope as the company could have provided. The outside auditor took unfair advantage of not being watched. It charged too much money and got away with it (because mid-managers but brand names of firms). There was a conflict of interest in alliance with Enron…not objective enough. After the scandals hit, the auditor played the Blame Game, without admitting itself of wrong-doing. The CEO of the auditing firm tacitly dismissed the whole issue as, ‘A company failed because the economics did not work.’
  12. Lawyers. They too were privy to what was transpiring. Congressional investigations have so far avoided implicating lawyers.
  13. Executives. No executive development program was held at Enron. Ken Lay’s management style was that he sat in the tower and had people to filter the bad news out. Other executives were brash, exhibited poor management judgment and made windfall money by selling stock due to insider trading information, when employees could not cash-out. The roles of other executives were to keep quiet and look the other way.
  14. Bonuses. Doing deals was the mantra…quickly and with great flash. Exorbitant bonuses and side ‘consulting fees’ for executives were the goals…and what were most aggressively pursued.
  15. Employees, Morale, The Workforce. Employees pledged blind loyalty to Ken Lay, though few ever had access to him. They worshipped the emperor from a distance. Individuals blindly accepted the company’s 401k directives but could have managed their money alternately. Employees emulated corporate culturisms. Egos and working mannerisms did not produce the most productive workforce. Too many bought into the hype and lost objectivity. Employees were better paid than the marketplace, thus forcing many to stay or not question policies. They’ll find some rude awakenings in the outside job world. Training, empowerment and team-building programs were cut and never reinstated. Incentive and ‘random acts of kindness’ programs were deleted.
  16. Community Relations. The company was quite active in the Houston community for many of the right reasons…but took its controls and influence too far. The company pushed many of its own pet agendas upon an unsuspecting community. It made too many charities dependent upon the company…thus wielding more community control. By 2001, many charities that were still counting on pledged donations and found themselves left in a lurch (though it was also their fault for not casting other nets for funding and being too dependent upon Enron). This circumstance had occurred years before, when Enron diverted pledged charity and community funds into high-gloss events, such as the 1991 Economic Summit and the 1992 Republican convention.
  17. Customers. They could have asked more questions, could have demanded further accountability. The customers are being hurt the most by the collapse…and need to communicate their stories better to the public.
  18. Wall Street Analysts. They too could have asked more questions and could have demanded further accountability over the years of Enron’s growth and boom. Some analysts who asked the tough questions were scorned or scapegoated by Enron. One must question why one company could wield such control over the investment community and what powers Wall Street had acquiesced in order for such power to grow. One must also ask why weren’t regular reviews conducted by underwriters and why were not annual reports more properly screened.
  19. The SEC. The commission could have asked more questions, could have demanded further accountability. However, since deregulation, it has not been compelled to do so.
  20. The Government. Nobody knew or kept their eyes on Enron until the scandals hit the front pages. Bureaucratic agencies quickly distanced themselves from funding issues or responsibilities in letting such a catastrophe occur. The U.S. government had deregulated too many industries over the years…thus, having the effect of allowing loopholes and marketplace-unfriendly situations to occur. In my opinion, Congress should look at re-regulating certain industries (oil & gas, utilities, airlines, banking, trucking, broadcasting). Long before congressional hearings were held, the government could have asked more questions and could have demanded further accountability.

Techpitfalls.com – Roadblocks to growth, opportunities missed.

Companies come and go. Not every startup is destined to make it. Yet, in this era of super-hype about tech and dot.com companies, unrealistic expectations precluded most of their successes from the beginning.

The hype now is that the bubble burst. Former dot.com owners are crying that they were stripped of their entitled riches. Employees who were promised stock options came away without still knowing what it takes to build a real business.

The e-commerce and dot.com wars have more than their share of casualties because their players never had the artillery and mindset to play seriously in the first place. Overt marketing hype led to an unwatchful marketplace…which always wakes up to the realities of business eventually.

Technology companies must now learn the lessons that steady-growth companies in other industries absorbed. Actually, most companies still have not truly learned the lessons. Thus, most businesses are at frequent ‘crossroads,’ where turns have deep implications and far-reaching.

I advised several technology companies during their gravy years. I tried to warn them about the things that would get them into trouble:

  • Focusing upon technology… not upon running a business.
  • Maintaining too much of an entrepreneur and family business mindset
  • Branding before being a real company
  • Their system’s inability to deal with any kind of disruption
  • Each side picks their favorite numbers for ‘success’ because they really do not know
  • Not comprehending the business you’re really in
  • Venturing too far from your areas of expertise
  • Thinking that the rules of corporate protocol did not apply to them
  • Misplaced priorities and timelines
  • Making financial yardsticks the only barometers
  • Wrong relationships with investors…letting angels call too many shots
  • Getting bad advice from the wrong people, mainly other tech professionals
  • Rationalizing excuses, ‘the rules have changed’
  • Feeling entitled to success and exemptions from business realities
  • Copycats of others’ perceived successes
  • Working long and hard, but not necessarily smart
  • Failure to contextualize the product, business, marketplace and bigger picture
  • Inability to plan
  • Refusal to change

Most of these pitfalls are common to so many industries. They simply were focused upon tech companies from 1994-2000 because they were the latest flavor. Some heeded the advice of myself and others… many did not avail themselves.

Reasons why some want to grow beyond their current boundaries:

  1. Prove to someone else that they can do it.
  2. Strong quest for revenue and profits.
  3. Corporate arrogance and ego, based upon power and influence (as well as money).
  4. Sincere desire to put expertise into new arena.
  5. Really have talents, resources and adaptabilities beyond what they’re known for.
  6. Diversifying as part of a plan of expansion, selling off and re-growing subsidiaries.
  7. The marketplace dictates change as part of the company’s global being.

Circumstances under which they expand include:

  1. Advantageous location became available.
  2. Someone wanted to sell out…a great deal was tough to pass up.
  3. Can’t sit still…must conquer new horizons.
  4. Think they can make more money, amass more power.
  5. Desire to edge out a competitor or dominate another industry.
  6. Create jobs for existing employees (new challenges, new opportunities).
  7. Part of their growth strategy to go public, offering stock as a diversified company.

This is what often happens as a result of unplanned growth:

  1. The original business gets shoved to the back burner.
  2. The new business thrust gets proportionately more than its share of attention.
  3. Capitalization is stretched beyond limits, and operations advance in a cash-poor mode.
  4. Morale wavers and becomes uneven, per operating unit and division.
  5. Attempts to bring consistency and uniformity drive further wedges into the operation.
  6. Something has to give: people, financial resources, competitive edge, company vision.
  7. The company expands and subsequently contracts without strategic planning.

7 Defeating Signs for Growth Companies:

  1. Systems are not in place to handle rapid growth…perhaps never were.
  2. Their only interest is in booking more new business, rather than taking care of what they’ve already got.
  3. Management is relying upon financial people as the primary source of advice, while ignoring the rest of the picture (90%).
  4. Team empowerment suffers. Morale is low or uneven. Commitment from workers drops because no corporate culture was created or sustained.
  5. Customer service suffers during fast-growth periods. They have to back-pedal and recover customer confidence by doing surveys. Even with results of deteriorating customer service, growth-track companies pay lip service to really fixing their own problems.
  6. People do not have the same Vision as the company founder…who has likely not taken enough time to fully develop a Vision and obtain buy-in from others.
  7. Company founder remains arrogant and complacent, losing touch with marketplace realities and changing conditions.

Everything we are in business stems from what we’ve been taught or not taught to date. A career is all about devoting resources to amplifying talents and abilities, with relevancy toward a viable end result.

Business evolution is an amalgamation of thoughts, technologies, approaches and commitment of the people, asking such tough questions as:

  1. What would you like for you and your organization to become?
  2. How important is it to build an organization well, rather than constantly spend time in managing conflict?
  3. Who are the customers?
  4. Do successful corporations operate without a strategy-vision?
  5. Do you and your organization presently have a strategy-vision?
  6. Are businesses really looking for creative ideas? Why?
  7. If no change occurs, is the research and self-reflection worth anything?

Failure to prepare for the future spells certain death for businesses and industries in which they function. The same analogies apply to personal lives, careers and Body of Work. Greater business awareness and heightened self-awareness are compatible and part of a holistic journey of growth.


About the Author

Hank Moore has advised 5,000+ client organizations worldwide (including 100 of the Fortune 500, public sector agencies, small businesses and non-profit organizations). He has advised two U.S. Presidents and spoke at five Economic Summits. He guides companies through growth strategies, visioning, strategic planning, executive leadership development, Futurism and Big Picture issues which profoundly affect the business climate. He conducts company evaluations, creates the big ideas and anchors the enterprise to its next tier. The Business Tree™ is his trademarked approach to growing, strengthening and evolving business, while mastering change. To read Hank’s complete biography, click here.