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The Fifth and Sixth Most Common Delusions of a Corporation

Recently I posted The Top Four Most Common Corporate Delusions. I then got on a plane with a buddy of mine to go ATV riding in Colorado and he added two more to the list. (Email me if you have your own to add to the list.)

His addition for fifth place is: “We have good people.” Ouch. This one seems to me like it’s personal. Unfortunately, he’s right. There’s this general disconnect between sagging stock prices, tumbling profits, and the realization that there can really only be one explanation within an organization – it’s people. Ask someone if they’ve ever worked with someone that they felt didn’t deserve their job and you’re sure to get a yes if they’ve had a job. (Be careful about asking this in state and local government, you may get hit as they instinctively raise both hands and then start hopping up and down like a jack Russell terrier.)

More importantly folks can either blame the organization as a whole (including its systems and people) or directly blame people for the relative success. The seemingly obvious escape clause to blame the organization doesn’t really work – because the organization has been created by its people and thus they’re ultimately responsible.

In the successful organizations I’ve seen a lot of emphasis placed on hiring the right people. One successful organization was interviewing me for a director level position and we spent about 6 weeks before I decided it wasn’t for me. (This was back when I was considering working for an organization.)

The addition for sixth place is: “We’re Competitive.” This one is a little bit harder to address because being competitive in the market means being well suited for competition and it’s hard to determine what might make you well suited for competition. For instance, Indiana, where I live, is located in the center of the country. Today it’s a transportation hub with good interstates and plenty of logistics companies. However in the late 1800’s there was still some development needed. Indiana didn’t have a canal system like some of the neighboring states so we were missing out on the canal traffic. Unfortunately by the time that Indiana got around to building the canal the railroad had been invented and all but killed the use of canal shipping – invalidating a huge amount of capital the state had spent to develop the system and as a result bankrupt the state. (Ouch.)

Canal shipping was quite competitive in the pre-railroad days. However, in the post railroad days it just simply wasn’t the most effective way to get goods from one place to another. Most organizations don’t face this sort of radical transformation in the industry all that often – but they do happen. So what’s competitive today may not be competitive tomorrow. (How’s that for a happy thought?)

We sometimes delude ourselves that the number of sales is the only metric that matters. That if someone buys our product or service – we must be competitive. However, that’s not necessarily true. Everyone gets lucky. Every buyer ends up buying something that isn’t the best deal at some point. (Don’t think used car salesman – please.) When transformations hit an industry they can be quick or slow – but it’s likely that you won’t see the change until much later than you want.

The only way to keep competitive is to behave like you’re never competitive enough – constant, relentless improvement won’t guarantee that your product won’t become uncompetitive (the best canal system in the world wasn’t going to compete with the railroad), however, it makes it more likely you’ll see the change, redefine yourself as a transportation company, and start building railroad lines.

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