What Really is The Big Picture of Business

StrategyDriven Big Picture of Business Article
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.


  • 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.


  • 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.


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


  • 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.

The Big Picture of Business – Sayings, Meanings and Interpretations

StrategyDriven Practices for Professionals ArticleThis 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)

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.

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

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

StrategyDriven Big Picture of Business ArticleThis 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. – 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 companies, unrealistic expectations precluded most of their successes from the beginning.

The hype now is that the bubble burst. Former 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 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.

The Big Picture of Business – Situations Causing the Downtown and Corporate Scandals: Barriers to Progress and Business Growth

StrategyDriven Big Picture of Business ArticleEvery business, company or organization goes through cycles in its evolution. At any point, each program or business unit is in a different phase from the others. Every astute organization assesses the status of each branch on its Business TreeTM and orients its management and team members to meet constant changes and fluctuations.

It’s not that some organizations ‘click’ and others do not. Multiple factors cause momentum, or the lack thereof. As companies operate, all make honest and predictable mistakes. Those with a willingness to learn from the mistakes and pursue growth will be successful. Others will remain stuck in frames of mind that set themselves up for the next round of defeat or, at best, partial-success.

The saddest fact is that businesses do not always know that they’re doing anything wrong. They do not realize that a Big Picture must exist or what it could look like. They have not been taught or challenged on how to craft a Big Picture. Managers, by default, see ‘band-aid surgery’ as the only remedy for problems… but only when problems are so evident as to require action.

Is it any wonder that organizations stray off course? Perhaps no course was ever charted. Perhaps the order of business was to put out fires as they arose, rather than practicing preventive safety on the kindling organization. That’s how Business Trees in the forest burn.

This article studies obsolete management styles and corporate cultures that exist in the minds of out-of-touch management. Reliance upon many of these management tenets subsequently brought Enron and many others down.

This includes the characteristics of addictive organizations, their processes, promises and forms. It reviews the Addictive System, the company way and the organization as an addict. This chapter studies communications, thinking processes, management processes, self-inflicted crises and structural components of companies that go bad, or maybe never do what it takes to be good. Topics discussed include the society that produced business scandals, accountants and auditors, pedestals upon which CEOs are placed, spin doctoring, compensations and accountability issues with managers.

Companies are collections of individuals who possess fatal flaws of thinking. They come from different backgrounds and are products of a pop culture that puts its priorities and glories in the wrong places…a society that worships flash-and-sizzle over substance.

Characteristics of Corporate Arrogance

  • Support others who are like-minded to themselves
  • Scapegoat people who are the messengers of change
  • Blame others who cannot or will not defend themselves
  • Find public and vocal ways of placing blame upon others
  • Shame those people who make them accountable
  • Neither attends to details nor to pursue a Big Picture
  • Perpetuate co-dependencies
  • Selectively forgets the good that occurs
  • Find three wrongs for every right
  • Do little or nothing
  • At all costs, fight change… in every shape, form or concept
  • Making the wrong choices
  • Inability to listen. Refusal to hear what is said
  • Stubbornness
  • Listening to the wrong people
  • Failure to change. Fear of change
  • Comfort level with institutional mediocrity
  • Setting one’s self up for failure
  • Pride
  • Avoidance of responsibilities
  • Blaming and scapegoating others
  • People who filter out the truths
  • Non-risk-taking mode
  • Inaccessibility to independent thinkers
  • Calling something a tradition, when it really means refusal to change
  • Pretense
  • Worshiping false idols, employing artificial solutions
  • Preoccupation with deals, rather than running an ongoing business
  • Arrogant attitudes
  • Ignorance of modern management styles and societal concerns
  • Failure to benchmark results and accomplishments

Incorrect Assumptions that People Make

  • That wealth and success cure all ills
  • That business runs on data. That data projects the future
  • That data infrastructure hardware will navigate the business destiny and success
  • That all athletes are role models. That all well-paid athletes are national heroes
  • That the CEO can make or break the company single-handedly
  • That doctors don’t have to be accountable to their customers
  • That education stops after the last college degree received
  • That TV newscasters are celebrities and community leaders
  • That having an E-mail address or a website makes one an expert on technology
  • That the Internet is primarily an educational resource
  • That technology is the most important driving force in business and society
  • That buying the latest software program will cure all social ills and create success
  • That community stewardship applies to other people and does not require our own investment of time
  • That white-collar crime pays and that highly paid executives will avoid jail time
  • That senior corporate managers have all the answers and do not need to seek counsel
  • That return on shareholder investment is the only true measure of a company’s worth
  • That all people who grew up in the south are racist
  • That government bureaucrats are qualified to make decisions about taxpayer money
  • That activists for one cause are equally open-minded about other issues
  • That corporate mid-managers with expense accounts are community leaders
  • That deregulation is always desirable and in the public’s best interest
  • That home-based businesses are more wealth-producing than holding a job
  • That professionals can get by without developing public speaking and writing skills

Fatal Quotations Voiced to Justify Fatal Thinking

  • “Might makes right. Take no prisoners. Wear the other side down.”
  • “Everyone knows who we are and what we do.”
  • “Our accountants will catch it and take care of it.”
  • “It’s none of their business. The public be damned.”
  • “We’re not paying people to think…just to do. Make them understand.”
  • “We don’t need outsiders coming in and hogging the credit.”
  • “If you don’t cooperate with me, I’ll bring you down.”
  • “We cannot do that right now. Once this crisis is past, we can think about the future.”
  • “How does this contribute to our bottom line?”
  • “If it does not contribute directly to the bottom line, we’re not interested.”
  • “We have more business than we can handle.”
  • “Too much competition destroys free enterprise. We need to eliminate competition.”

Addictive Organizations

Addictive organizations are predicated upon maintaining a closed system. Alternately, they are marked by such traits as confusion, dishonesty and perfectionism. They are scarcity models, based upon quantity and the illusion of control. Only the high performers get the gold because there are not enough bonuses to go around. Addictive organizations show frozen feelings and ethical deterioration.

Addictive organizations dangle ‘the promise’ to employees, customers, stockholders and others affected. People are lured into doing things that enable the addictive management’s pseudopodic ego.

All that is different is either absorbed or purged. The addictive organization fabricates personality conflicts in order to keep people on the edge all the time. There exists a dualism of identifying the rightness of the choice and a co-dependence upon the rewards of the promise.

In such companies, the key person is an addict. The CEO and his chosen lieutenants have taken addictions with them from other organizations. The organization itself is an addictive substance, as well as being an addict to others. They numb people down and addict them to workaholism.

The addictive system views everything as ‘the company way.’ The entity is outwardly one big happy family. It is big and grandiose. The emphasis is upon the latest slogans of mission but does not look closely at how its systems operate. The term “mission” is a buffer, excuse, putdown and roadblock.

Rather than embrace the kinds of Big Picture strategies advocated in this book, the addictive system seeks artificial fixes to organizational problems, such as bonuses, benefits, slogans and promotions of like-minded executives.

Communications are always indirect, vague, written and confusing. People are purposefully left out of touch or are summarily put down for not co-depending. Secrets, gossip and triangulation persist, as a result. The addictive organization does communicate directly with the news media and often adopts a ‘no comment’ policy. Company officers (who should be accessible to media) are cloistered and unavailable. The addictive organization does not recognize that professional corporate communications are among the best resources in their potential arsenal.

The addictive system does not encourage managers to develop thinking and reasoning processes. The system portrays forgetfulness, selective memory and distorted facts into sweeping generalizations. We are expected to take them at their word, without requesting or demanding facts to justify.

In the addictive organization, those who challenge, blow whistles or suggest that things might be better handled are neither wanted nor tolerated. Addictive managers project externally originated criticism back onto internal scapegoats. There is always a strategy of people to blame and sins to be attributed to them.

Management processes tend to exemplify denial, dishonesty, isolation, self-centeredness, judgmentalism and a false sense of perfectionism. Intelligent people know that perfectionism does not exist and the quest for quality and excellence is the real game of life and business. Addictive organizations do not use terms like ‘quality’ and ‘excellence’ because such terms must be measured, periodically reexamined and communicated… the organization does not want any of that to occur.

There persists a crisis orientation, meaning that everything is down to the wire on deadlines (not to be confused with just-in-time delivery, which is a good concept). Things are kept perennially in turmoil, in order to keep people guessing or confused. Management seduces employees into setting up competing sides in bogus feuds and manipulating consumers.

Structural components include preserving the status quo, fostering political games, taking false measurements and pursuing activities that are incongruent with the organization’s announced mission.

7 Layers of Organizational Addictiveness – Companies That Go Bad… Self-Inflicted Crises

  1. Self Destructive Intelligence. There exists a logic override. Since the company does not believe itself to be smart enough to do the right things, then it creates a web of rationalism. Since the mind often plays tricks on itself, management capitalizes upon that phenomenon with people who may question or criticize.
  2. Hubris. This quality destroys those who possess it. Such executives exhibit stubborn pride, believing their own spin doctoring and surrounding themselves with people who spin quite well on their behalf. They adopt a ‘nobody does it as well as we can’ mentality. Such companies scorn connections, collaborations and partnering with other organizations.
  3. Arrogance. Omnipotent fantasies cause management to go too far. The feeling is that nothing is beyond their capacity to succeed (defined in their minds as crushing all other competition).
  4. Narcissism. Company executives possess excessive conceit. They are disconnected from outside forces, self-centered and show a cruel indifference to others. The view is that the world must gratify them.
  5. Unconscious Need to Fail. These companies try too hard to keep on winning. With victory as the only possible end game, all others must be defeated along the way. In reality, these people and, thus, their organizations, possess low self-esteem. Inevitably, they get beaten at their own games.
  6. Feeling of Entitlement. Walls and filters have been established which insulate top management from criticism (which is viewed as harming the chain of armor, rather than as potentially constructive). Anger stimulates many of their decisions. The feeling is that they deserve it all. Power satisfies appetites. These executives have poor human relations skills. They believe that excesses are always justified.
  7. Collective Dumbness. Such organizations have totally reshaped reality to their own viewpoints. The emperor really has no clothes, but everyone overlooks the obvious and avoids addressing it forthrightly. The organization dumbs down the overall intelligence level, so that people are in the dark and cannot readily make judgment calls. Cults of expertise function in vacuums within the company. Neurotic departmental units do not interface often with others. Employees are slaves of the system. There exists total justification for what is done and an ostrich effect toward calls for accountability.

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.

The Big Picture of Business – What Business Must Learn: Putting the economic downtown and recent events into perspective

The public does not react to any crisis until it is big enough and far-reaching to affect their daily lives. When business news gets on Page 1 of every day’s newspaper and every evening TV newscast, then the public notices and cares.

Business and organizational stories do not hit the public consciousness until there is a crisis. People decry the scandals and rest assured that such doings are not happening in their companies. Often, it is assumed that some protector or regulator will adequately address the issues. When the outcomes are of high magnitude, the outcry becomes larger. As people see the events as having a direct effect on the economy and their livelihood, they take notice and follow the stories more thoroughly.

The recent years succeeded in exploding a great many myths and presumptions about business. Formerly sainted icons went down in disgrace. Tactics deemed as ‘standard operating procedure’ for some companies were exposed and ridiculed by others. A few whistle blowers were lauded in the efforts, though others were attacked as the perpetrators of the chaos shuffled aside.

One must ask many simple and pertinent questions about a seemingly unsettling business future:

  • How did business get this far?
  • Why did the scandals and corporate disrepute occur?
  • What are the implications of Enron and other corporate scandals upon business?
  • Where are the next trends and opportunities?
  • How do we cope in the new environment?
  • What beacons of opportunity do we look for?
  • What will it now take to succeed and fail?
  • How do we react to and benefit from changes, rather than become victims of them?
  • Do we still take band-aid approaches (such as buying enterprise software)? Or, do we now see the need and importance to embrace longer-term approaches?
  • How far will we go to excel?
  • How creative must we become in the New Order of Business?
  • How far-reaching are business practices?
  • How much further should we extend ethics?
  • Where will the pendulum swing next?

Business in the 21st Century is real and dangerous. People suddenly feel lost. They are no longer in a safe port. They don’t know how to cope. Yesterday’s strategies simply do not work anymore.

Many of the old assumptions which business previously held have proven untrue and unworkable. We really must examine what we assumed before and what we can assume now. Business is at a juncture and needs new focus.

The victims’ fear and the public’s apathy enabled the crises to occur. This is the perfect climate for unethical people to have gotten away with murder. Sadly, many of the perpetrators did not see lapses in ethics… it was legal and just business to them.

It takes tragedies occurring in order for the system to stand back, take focus and fix what is wrong. It’s a whole new world. This chapter talks candidly about recent trends. Other chapters will discuss the need for and exciting opportunities for adaptability. By maintaining an awareness of further changing environments, there are further opportunities to be successful, ethical and move ahead of the competition.

The term CEO has recently been held in disfavor. We decry CEOs for the same reasons that we formerly sainted and canonized them. People are envious of the power, status and wealth of company heads. Yet, most CEOs were never trained on how to be CEOs, with all the responsibility, people skills, leadership and ethical management that must go along with the job.

The game of duping and fooling shareholders, customers and employees has ended… as well it should. We cannot ignore or compartmentalize board members, stockholders, employees and stakeholders anymore. We cannot fool them. We must listen to them and respect them.

Every organization in the world must reexamine how we will keep score in the New Order of Business. Continuing to justify blind spots will blur accountability. Having maintained too much of a myopic focus is what got so many companies in trouble already.

Thinking that we dodged the bullet while others got caught is a mentality that will still bring many other companies down in value and defeat. The scandals are not all aired in public yet. Up to 25% of our businesses are in peril and must take corrective actions, lest they be brought down in disgrace too.

Most of the downfalls, stumbles, false starts and incorrect handling of situations stemmed from business’ lack of focus on the macro… and over-emphasis upon certain micros, to the exclusion of other dynamics.

This chapter puts business events of the last two years into perspective… covering a broader scope of subjects than has been reported and discussed. This book states the case for more of a macro-focused approach to management. An analysis of business encompasses much more than accounting fraud and stated values of stocks.

What we do with fear and uncertainty determines who we are. It is time for fresh thinking, heightened ethical behavior and a shift to a macro focus. Rules and responsibilities within each sector of companies are changing. Each of us must ask what we can contribute and our roles in adapting to the crises.

High Costs, Learning Curves.

Corporate scandals of each of the last 10 years cost the U.S. economy more than $200 billion in lost investment savings, jobs, pension losses and tax revenue. The scandals resulted in one million job cuts. 401(k) plans dropped $13 billion as a result of these events alone. Recent corporate scandals have cost good businesses in reputation, credibility and support, by virtue of being lumped with some bad apples. Thus, consumer confidence dipped, and it will take years to fortify the trust in business.

Losses from 401(k) investment accounts alone totaled $175 billion, making them worth 30% less than they were two years ago. Public pension funds nationwide lost at least $6.4 billion as the stock market plummeted, amid a crisis of investor confidence. More than a million workers lost their jobs at the affected companies, while company executives cashed out billions of dollars of their stock.

This demonstrates the impact of accounting failures at high-profile companies. There has been $13 billion in lost federal tax revenue from companies with questionable accounting practices under-reporting their profits to the IRS. Twenty-three companies under investigation have laid off 162,000 workers.

We have been subjected to the second longest bear market in history, the longest being that of the Great Depression. The stock market is down 25%. We are now $7 trillion poorer than we used to be, thanks to Wall Street over-valuing of companies. Sweeping reforms by Wall Street and the Securities & Exchange Commission (SEC) are needed, forcing firms to separate their investment banking business from their stock advisory business.

There are 25 million small businesses in America… all affected in some way by corporate scandals. The healthcare industry is the primary business sector that is most expanding right now.

Steroid scandals periodically rock the sports world. The public decries the use of steroids but secretly supports the results that they yield (athletic records being set). The steroids usage norm in some team sports has the effect of institutionalizing breaking the rules, even though the health of some is seriously endangered. Temptations to break the rules for the hope of future financial gain are at the heart of corporate arrogance, greed, deceptions and double-dealings, as well as in the minds of some sports promoters.

Operational Statistics.

One out of every 12 businesses fails. 90% of all e-businesses will fail. 99% of all internet websites do not make a profit.

Retailers make 70% of their earnings in the fourth quarter of each year. That is why holiday sales are vital to their bottom line and, thus, the economy.

There have been 53 peacekeeping missions from 1948-2000, 40 of those from 1988-2000. Spending on peacekeeping peaked in 1994 at $3.2 billion, and is estimated at $2.2 billion for 2000. Successful peacekeeping missions include El Salvador, Namibia, and East Timor. Less successful include Somalia and Bosnia where there was less local support for their presence. A major report to the United Nations Millennium Summit calls for changes in the way in which peacekeeping operations are organized and financed. It also recommends they do not remain neutral when one side initiates aggression.

Airport screeners fail to detect fake bombs and guns 24 percent of the time.

52% of all high school students know someone who brought a weapon to school. 61% of those students did nothing about it. 52% of all high school students know someone who made a weapon-oriented threat. 56% of those students did nothing about it.

The Pentagon says that it cannot account for 25% of what it spends.

Shoplifting costs American business $10 billion per year.

Airlines say that delays caused by air traffic controllers cost them a combined $4 billion per year. For every 1-cent reduction in the cost of jet fuel, the airlines save $170 million.

Cargo theft costs the U.S. economy $6 billion per year. The victimized companies pass their recoveries from losses along to the customers. For example, $125 of the cost of each new personal computer goes to reimburse companies for previous thefts.

Consumers are cheated at gas pumps of self-serve marts each year in excess of $1 million because of faulty computer chips.

On any given day in the United States, over 100 convenience stores are robbed. Every day in the U.S., people steal $20,000 from coin-operated machines.

The average bank teller loses about $250 every year.

One third of our nation’s Gross National Product is spent in cleaning up mistakes. Yet, only 5.1% is spent on education, which is the key to avoiding mistakes on the front end.

Fires cost more than $150 billion per year in damage. Most fires are caused by carelessness: overloading electrical sockets, smoking in bed, failure to turn off kitchen burners, malfunctions with space heaters, allowing trash to accumulate, failure to repair electrical wiring and electrical breaker explosions. Electricity-related incidents account for half of all fires.

Learning the Lessons and Moving Forward.

The U.S. Congress enacted the Sarbanes-Oxley Act, corporate reform legislation, in 2002. The bill delineated new regulations, in response to the accounting scandals at WorldCom, Enron, Tyco and other large companies which left thousands of employees without retirement savings and investors with worthless stock shares.

The bill was intended to prevent malfeasance, restore investor confidence and crack down on corporate cheaters. It set up new regulations for corporate auditing practices and creates strict penalties for executives who hide debt in accounting tricks. It was the largest reform since changes were made to halt the Depression-era slide into bankruptcy.

Sarbanes-Oxley instituted extensive corporate governance reforms, including standards for advisors representing public companies and their nonpublic subsidiaries. Under it, business leaders are expected to embrace both the letter and spirit of the bill and other existing laws, designed to protect investors, employees and other stakeholders.

Unfortunately, the material covered by Sarbanes-Oxley represents only two percent of Corporate Responsibility and Ethics. As one who has conducted ethics audits and put programs into practice, I know that the reform did not go far enough. Thus, the economic downtown of the past two years. A more holistic approach to ethics would have averted many of the crises.

In moving forward, one must review those junctures where leaders and their companies recognize when a business is in trouble. These are the high costs of neglect, non-actions and wrong actions, per categories on The Business TreeTM:

  1. Product, Core Business. The product’s former innovation and dominance has somehow missed the mark in today’s business climate. The company does not have the marketplace demand that it once had. Others have streamlined their concepts, with greater success. Something newer has edged your company right out of first place.
  2. Processes, Running the Company. Operations have become static, predictable and inefficient. Too much band-aid surgery has been applied, but the bleeding has still not been stopped. Other symptoms of trouble have continued to appear… often and without warning.
  3. Financial Position. Dips in the cash flow have produced knee-jerk reactions to making changes. Cost cutting and downsizing were seemingly ready answers, though they took tolls on the rest of the company. The overt focus on profit and bean counter mentality has crippled the organizational effectiveness.
  4. Employee Morale and Output. Those who produce the product-service and assure its quality, consistency and deliverability have not been given sufficient training, empowerment and recognition. They have not really been in the decision making and leadership processes, as they should have been. Team members still have to fight the system and each other to get their voices heard, rather than function as a team.
  5. Customer Service. Customers come and go… at great costs that are not tallied, noticed or heeded. After the percentages drop dramatically, management asks “What happened?” Each link in the chain hasn’t yet committed toward the building of long-term customer relationships. Thus, marketplace standing wavers.
  6. Company Management. There was no definable style in place, backed by Vision, strategies, corporate sensitivities, goals and beliefs. Whims, egos and momentary needs most often guided company direction. Young and mid-executives never were adequately groomed for lasting leadership.
  7. Corporate Standing. Things have happened for inexplicable reasons. Company vision never existed or ceased to spread. The organization is on a downslide… standing still and doing things as they always were done constitutes moving backward.

These situations are day-to-day realities for troubled companies. Yes, they brought many of the troubles upon themselves. Yes, they compounded problems by failing to take swift actions. And, yes, they further magnify the costs of “band-aid surgery” by failing to address the root causes of problems.

Each year, one-third of the U.S. Gross National Product goes toward cleaning up problems, damages and otherwise high costs of failing to take proper action. On the average, it costs six times the investment of preventive strategies to correct business problems). This concept was addressed in another of my books, The High Cost of Doing NothingTM.

There are seven costly categories of doing nothing, doing far too little or doing the wrong things in business:

  1. Waste, spoilage, poor controls, lack of employee motivation.
  2. Rework, product recalls, make-good for inferior work, excess overhead.
  3. Poor controls on quality, under-capitalization, under-utilization of resources.
  4. Damage control, crisis management mode.
  5. Recovery, restoration, repairing wrong actions, turnover, damaged company reputation.
  6. Retooling, restarting, inertia, anti-change philosophy, expenses caused by quick fixes.
  7. Opportunity costs, diversifying beyond company expertise, lack of an articulated vision.

About the Author

Hank MooreHank 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.