A five-stage framework on “How the Mighty Fall”

…“Even so, a staged framework of how the mighty fall did emerge from the data. It’s not the definitive framework of corporate decline –companies clearly can fall without following this framework exactly (from factors like fraud, catastrophic bad luck, scandal, and so forth)—but it is an accurate description of the cases we studied for this effort…”

…”The model consists of five stages that proceed in sequence. Let me summarize the five stages here and then provide a more detailed description of each stage in the following pages.”

…“Stage 1: Hubris born of success. Great enterprises can become insulated by success; accumulated momentum can carry an enterprise forward, for a while, even if its leaders make poor decisions or lose discipline. Stage 1 kicks in when people become arrogant, regarding success virtually as an entitlement, and they lose sight of the true underlying factors that created success in the first place. When the rhetoric of success (“We’re successful because we do these specific things”) replaces penetrating understanding and insight (“We’re successful because we understand why we do these specific things and under what conditions they would no longer work”), decline will follow…”

…“Stage 2: Undisciplined pursuit of more. Hubris from Stage 1 (“We’re so great, we can do anything”) leads right into Stage 2, the Undisciplined Pursuit of More—more scale, more growth, more acclaim, more of whatever those in power see as “success”. Companies in Stage 2 stray from the disciplined creativity that led them to greatness in the first place, making undisciplined leaps into areas where they cannot be great or growing faster than they can achieve with excellence, or both. …”

…“Stage 3: Denial of risk and peril. As companies move into Stage 3, internal warning signs begin to mount, yet external results remain strong enough to “explain away” disturbing data or to suggest that the difficulties are “temporary” or “cyclic” or “not that bad”… In Stage 3, leaders discount negative data, amplify positive data, and put a positive spin on ambiguous data. Those in power start to blame external factors for setbacks rather than accept responsibility…”

…“Stage 4: Grasping for salvation. The cumulative peril and/or risks-gone-bad of Stage 3 assert themselves, throwing the enterprise into a sharp decline visible to all. The critical question is, How does its leadership respond? By lurching for a quick salvation… Those who grasp for salvation have fallen into Stage 4. Common “saviors” include a charismatic visionary leader, a bold but untested strategy, a radical transformation, a dramatic cultural revolution … or any number of other silverbullet solutions. Initial results from taking dramatic action may appear positive, but they do not last.”

…“Stage 5: Capitulation to irrelevance or death. The longer a company remains in Stage 4, repeatedly grasping for silver bullets, the more likely it will spiral downward. In Stage 5, accumulated setbacks and expensive false starts erode financial strength and individual spirit to such an extent that leaders abandon all hope of building a great future … and in the most extreme cases, the enterprise simply dies outright”

Jim Collins (2009) HOW THE MIGHTY FALL and some companies never give in; Pp 19-23; Ed. The Random House Business Books; London; UK.

Check Jim Collins book page here. Buy the book from here.

Leave a comment

Posted by on January 20, 2011 in Management, Uncategorized


Toyota’s in house development

“SATOSHI OGISO was 32 in 1993 when he took on the task of building what Toyota, his employer, vaguely thought of as the car of the future. The deadline was the start of the 21st century. In America at that time car designers were sketching gas-guzzlers or sport-utility vehicles. But Mr Ogiso’s team, mostly in their early 30s, wanted to create something that would “do the Earth good”, as he puts it. Within two years they had come up with Toyota’s hybrid technology, in which a battery powers the car for short distances and a petrol engine kicks in at higher speeds, recharging the battery. Within four years they had their first Prius on the road.

Now there are 2m of them and Toyota has a prototype plug-in version that can be charged at home, like other electric vehicles, but has a petrol engine for long distances. In Toyota’s more distant vision, the home (built, of course, by Toyota’s housing division) will be solar-powered, which will cut emissions even further. And at night, when demand is low, the home may even be plugged into the hybrid car, which will have recharged its battery from the engine.

This is the kind of thing you would expect from Japanese manufacturing, with its focus on craftsmanship, or monozukuri. Mr Ogiso’s project exemplifies some of the strongest traits: teamwork, in-house development and a desire to earn glory for the company. What was different was the engineers’ ages. All young, they were given the freedom to follow their instincts, with no middle managers to second-guess them. “The senior engineers could not understand the hybrid engineering,” chuckles Mr Ogiso.

The tradition of in-house innovation runs deep in Japan, and some of the resulting products may help the country to adapt to an ageing society. Bill Hall at Synovate, a market-research company, reels off a list of new products that are already available, or will be soon: the Toto intelligent toilet that can detect the level of sugar in urine; Panasonic’s robotic bed that turns into a wheelchair; Toyota’s battery-powered individual three-wheeler, with built-in sensors to avoid collisions.”

The Economist Nov 18th 2010 | from PRINT EDITION Pp.10; Read full article here


Tags: ,

Good to Great (or why Good is the enemy of Great)

…“Here, then is an overview of the framework of concepts and a preview of what’s to come in the rest of the book…”

“Level 5 Leadership. We were surprised, shocked really, to discover the type of leadership required for turning a good company into a great one. Compared to high-profile leaders with big personalities who make headlines and become celebrities, the good-to-great leaders seem to have come from Mars. Self-effacing, quiet, reserved, even shy—these leaders are a paradoxical blend of personal humility and professional will. They are more like Lincoln and Socrates than Patton or Caesar.”

“First Who … Then What. We expected that good-to-great leaders would begin by setting a new vision and strategy. We found instead that they first got the right people on the bus, the wrong people off the bus, and the right people on the right seats—and then they figured out where to drive it. The old adage “People are your most important asset” turns out to be wrong. People are not your most important asset. The right people are.”

“Confront the Brutal Facts (Yet Never Lose Faith). We learned that a former prisoner of war had more to teach us about what it takes to find a path to greatness than most books on corporate strategy. Every good-to-great company embraced what we came to call the Stockdale Paradox: You must maintain unwavering faith that you can and will prevail in the end, regardless of the difficulties, AND at the same time have the discipline to confront the brutal facts of your current reality, whatever they might be.”

The Hedgehog Concept (Simplicity within the Three Circles). To go from good to great requires transcending the curse of competence. Just because something is your core business—just because you’ve been doing it for years or perhaps even decades—does not necessarily mean you can be the best in the world at it. And if you cannot be the best in the world at your core business, then your core business absolutely cannot form the basis of a great company…”

A Culture of Discipline. All companies have a culture, some companies have discipline, but few companies have a culture of discipline. When you have disciplined people, you don’t need hierarchy. When you have disciplined thought, you don’t need bureaucracy. When you have disciplined action, you don’t need excessive controls. When you have disciplined action, you don’t need excessive controls. When you combine a culture of discipline with an ethic of entrepreneurship, you get the magical alchemy of great performance”

Technology Accelerators. Good-to-great companies think differently about the role of technology. They never use technology as the primary means of igniting a transformation. Yet, paradoxically, they are pioneers in the application of carefully selected technologies. We learned that technology by itself is never a primary, root cause of either greatness or decline.”

Jim Collins (2001) Good to Great; Pp 12-14; Ed. The Random House Business Books; London; UK. Jim Collins Book Page here. Buy it from here.

Leave a comment

Posted by on January 4, 2011 in Management


Tags: , ,

Yo, emprendedor

Mi objetivo con estas líneas es desmontar el mito exclusivista del emprendedor. Me resisto a las teorías de fórmulas mágicas de cómo emprender y a los argumentos que afirman que  “emprendedor se nace y no se hace”. Todos nacemos siendo emprendedores. Emprender es vivir. Todos, cuando empezamos a andar, elegimos nuestra carrera, cambiamos de trabajo, empezamos una nueva relación o decidimos hacer un máster, estamos de alguna manera emprendiendo. Si sabemos identificar y entender las razones que nos llevan a cambiar, a crecer o a crear, encontraremos los secretos que para cada uno de nosotros significa emprender. No escuches a los gurús del emprendimiento. Busca dentro de ti, encuentra la fuerza para hacerlo y lánzate; el camino de la aventura de emprender es el mejor maestro y tú eres el gurú.

Creo que son tres los elementos fundamentales de esta aventura personal de emprender. Tres elementos a los que todos tenemos acceso, y que con la necesaria dedicación uno puede dominar construyendo unos sólidos cimientos sobre los que emprender. Los tres elementos son la ambición, la creatividad y el miedo.

La ambición alberga nuestras ganas de cambiar y de crecer. Se asienta en una curiosidad intelectual que nos lleva a preguntarnos el por qué de las cosas y nos anima a cambiar lo que no nos gusta. La ambición sana es muy poderosa. Las ganas todo lo pueden. En la aventura de emprender te encontrarás seguro con muchas dificultades, y es importante tener el buen ánimo de quererlas superar. No se trata de saber si habrá o no problemas; los habrá seguro y es importante recordar qué te animó a hacer lo que quieres hacer, y, desde la fuerza de la motivación, enfrentarse a los infortunios.

Lo más importante que nos da la ambición es determinación y dirección. No hay buen viento para el que no sabe dónde va. Si sabes lo que quieres es fácil poner todas las fuerzas en ese objetivo. La ambición nos orienta y nos centra…

El segundo elemento fundamental de la aventura de emprender es la creatividad. La creatividad es una consecuencia derivada de la ambición: cuando quieres cambiar algo que no te gusta, cuando quieres conseguir algo que deseas, es necesario crear. Crear implica acción, y la acción es siempre buena… No es necesario ser el primero, pero sí lo es hacerlo de forma distinta y ser más eficiente, crear valor…

El tercer componente de la aventura de emprender es el miedo, la superación de los miedos para ser más exacto. El miedo es algo intrínseco al ser humano como especie biológica. El miedo nos protege y nos hace prudentes. De otra forma hubiésemos desaparecido devorados por leones o estrellados en precipicios. Sentir miedo nos alerta y nos pone en situación de defensa. Todo esto nos ha protegido durante decenas de miles de años y es una parte muy íntima de quienes somos.

El problema es que en los tiempos que vivimos, los acechos del entorno ya no necesitan del miedo que nos ha protegido en nuestra evolución: no hay leones que nos puedan atacar por la noche, ni fuegos de los que tengamos que salir corriendo. Nuestras vidas son más seguras, pero el miedo sigue presente en nuestro ADN como lo hacía hace 10.000 años. Es importante entender que este útil compañero de viaje es muchas veces un estorbo más que una ayuda en las dinámicas de la sociedad desarrollada del siglo XXI. Este miedo que nos protege y nos hace prudentes, también nos agarrota y nos inmoviliza; nos hace complacientes y cómodos; nos convence de no aventurarnos a emprender.

Es importante ser consciente de estos miedos; reconocerlos, identificarlos y separarlos  del proceso normal de razonamiento a la hora de tomar decisiones. Los miedos se disfrazan de convincentes razones que generalmente nos retienen en el inmovilismo.

En mi experiencia, la mejor forma de enfrentarse a la superación de los miedos es primero reconocer el miedo y segundo entender de qué está hacho: si es miedo al fracaso, miedo a la inseguridad económica, miedo a dejar el trabajo actual o miedo a liderar y tomar decisiones. El miedo es la parte más complicada de emprender porque es la que se disfraza, la que se esconde y encuentra mil razones para no cambiar.

La aventura de emprender es apasionante y todos deberíamos explorarla de alguna manera. Al margen de los suculentos beneficios económicos que se pueden derivar existe una tremenda recompensa de satisfacción y crecimiento personal. Se aprovecha mucho más la vida cuando los sueños se intentan, los miedos se vencen y se prueba la suerte.

Hernández, Bernardo. Desmontando el mito exclusivista del emprendedor in Consejos de inversores a iniciadores. Ed. Bubok Publishing S.L.  Spain 2010

Leave a comment

Posted by on May 16, 2010 in Uncategorized


The Beer Game as explained in Lean Thinking; How to promote flow

“The Beer Game or JIT Game is a simple exercise in which 5 people take roles in a four-stage production process folding and packing three colors of paper boxes. (See figure below)

Beer Game or JIT MIT game

The first person is asked to bundle up and deliver quantities of unfolded boxes in three colors to the two pre-assembly stations. The quantities are in response to a customer order. One pre-assembly station folds the large boxes while the other pre-assembly station folds the small boxes and both stations secure their boxes with a rubber band. The boxes are then passed ahead to the assembly station where the fourth player opens the large box and places the small box inside. The player writes out a ticket, folds it, places it on topof the small box, and then closes the large box and secures it with a rubber band. The box is then passed to quality control/dispatch where the fifth player opens the large box and checks to see that the ticket is present and properly written. This player signs and stamps the ticket before placing it back on top of the small box. The large box is then closed, secured with a rubber band, and delivered to the customer.

The players are told to work at their own pace to produce the three colors of box in response to the customer order. Soon every player is trying furiously to complete his tasks, first for one color of box, then for the next. However, a huge mountain of boxes quickly builds up in front of the fourth player, who has a bigger job than the others. In addition, the customer announces that he wants to change his order, to receive first whichever color of box the team has left till last. This quickly produces even more of a pile-up as the wrong color boxes are pushed to the side so the right color can get through.

The team of five is then asked what’s wrong and what could be done about it. The answer is always the same: “The fourth player is the bottleneck so we need to add another worker to the assembly step and build a storage area between steps two and three”.

The game coordinator then suggests that instead the five players should try a pull system by making only five boxes at a time and only when asked (pulled) by the next player downstream. To the player’s amazement, the whole activity proceeds smoothly, with oly a tiny buildup of boxes between steps two and three. They then play two more rounds, reducing the lot size to three and then to one, eventually achieving perfectly smooth flow and no buildup of boxes at all.

Next the game coordinator says the customer is going to vary his orders at random between the three colors of boxes and asks what will happen. The supplier executives recognize this situation as the key headache in their lives and predict chaos. But, of course, with no boxes piled up in inventory, it’s a simple matter to switch from one color to the next.

As the supplier’s managers are scratching their heads, the team moves from games to reality by suggesting that the exact same techniques should be introduced in the shop floor activities.”

Womack, James P. and Jones, Daniel T. Lean Thinking. Banish waste and create wealth in your corporation. Pp 208-209. Ed Simon & Schuster UK, Ltd. 2003. London, UK.

More resources on the beer game:

The Beer Distribution Game:

The BeerGame Portal:


Tags: , , , ,

Yes, #HootSuite is working now. I will t

Yes, #HootSuite is working now. I will try not to manage my social media from here until the lads from #GoogleWave make some integration

Leave a comment

Posted by on April 16, 2010 in Uncategorized


Lean programming (the fridge vs the radiator)

Lean programming (the fridge vs the radiator) – Jason Yip

by ignitesydney on February 23, 2010
Leave a comment

Posted by on March 20, 2010 in Lean Manufacturing