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Project Communication
       Management
              Lecture 9
Destructive habits in organizations and
               projects

            Project Communications
                 Management
Project Communications
     Management
Why Do Good Companies Go Bad?
• In a nutshell: Good companies fail when
  they are unable or unwilling to change
  when their external environment changes
  significantly.




               Project Communications
                    Management
Denial

     Turf                                       Arrogance
     Wars

                        7
 Volume               Habits                         Complacency
Obsession




            Competitive            Competence
              Myopia               Dependence




                 Project Communications
                      Management
Denial



Project Communications
     Management
What leads to Denial?
• Denial of emerging technologies.

 Denial of changing consumer tastes.

 Denial of the new global environment




                Project Communications
                     Management
Signs of Denial
• “Hey, we’re different, so there’s no way
  it can happen to us.”
  The company is too proud to admit that
  someone else has come up with a better
  way.
  The company ignores, rationalizes, or
  blames others for its situation instead of
  admitting its fault.
                Project Communications
                     Management
How to break the habit of denial


         Look for it




           Project Communications
                Management
How to break the habit of denial




           Assess it



           Project Communications
                Management
How to break the habit of denial




           Change it



           Project Communications
                Management
Arrogance



 Project Communications
      Management
What is Arrogance?
• Offensive display of:
  Superiority
  Self-importance
  Pride
  Disdain (contempt)
  … because of an inflated sense of self



                Project Communications
                     Management
What leads to Arrogance?
• Exceptional achievement in the past

 David conquers Goliath

 The company pioneers a product or
 service



                Project Communications
                     Management
Signs of Arrogance
• The company stops listening

 The company becomes extravagantly
 eager to show off.

 The company begins to act like a bully,
 both internally and externally.


               Project Communications
                    Management
Signs of Arrogance
• The company becomes high-handed and
  abuses rules

 The company favors those who validate its
 views and gets rid of those who are
 critical.



               Project Communications
                    Management
How to break the habit of
            arrogance?
• Rotate management to new challenges.

 Implement nontraditional succession
 planning.

 Diversify the talent.

 Change the leadership.

                 Project Communications
                      Management
Complacency

   Project Communications
        Management
What is Complacency?
• Complacency is the sense of security and
  comfort that derives from the belief that
  the success that’s taken place in the past
  will continue indefinitely.




                Project Communications
                     Management
What leads to Complacency?
• The company’s past success came via a
  regulated monopoly.
  The company’s success was based on a
  distribution monopoly.
  The company was “chosen” for success by
  the government.
  The government owns or controls the
  business.

               Project Communications
                    Management
What leads to Complacency?
• The company’s past success came via a
  regulated monopoly.
  The company’s success was based on a
  distribution monopoly.
  The company was “chosen” for success by
  the government.
  The government owns or controls the
  business.

               Project Communications
                    Management
Signs of Complacency
• The company is in no hurry to make
  decisions.

 The company’s processes are overly
 bureaucratic.

 Everybody has to get on board before a
 decision is made.

               Project Communications
                    Management
Signs of Complacency
• The company is completely vertically
  integrated.

 Enormous cross-subsidies are in place –
 by functions, by products, by markets, by
 customers. Average costing and average
 pricing prevail.


                Project Communications
                     Management
How to break Complacency?
• Reengineer to achieve high quality,
  eliminate waste, and reduce inefficiency.

 Decentralize profit and loss by creating
 and molding business units around
 products or geographies.



                Project Communications
                     Management
How to break Complacency?
• Outsource – contract out all non-core
  functions.

 Reenergize – consider a new leader with a
 positive, opportunity-oriented vision




                Project Communications
                     Management
Competency Dependence




       Project Communications
            Management
What is Competency
          Dependence?
• Somebody else can be doing a better job,
  and if a company is unable to figure out
  what to do, it has become competency-
  dependent




               Project Communications
                    Management
What leads to Competency
          Dependence?
• R&D dependence
  Design dependence
  Sales dependence
  Service dependence




              Project Communications
                   Management
Signs of Competency
            Dependence
• Reengineering, reorganization, retooling
  have been tried and still no good results.

 The thrill is gone and the company is in a
 funk.

 Stakeholders are leaving


                 Project Communications
                      Management
How to break Competency
          Dependence?
• Find new applications where the same
  competency results in new value.

 Determine new markets where the same
 competency remains an asset.




               Project Communications
                    Management
How to break Competency
          Dependence?
• Expand the range of your competencies
  by moving up or down the value chain.

 Refocus company resources into areas
 with more growth and profit potential.




               Project Communications
                    Management
Competitive Myopia



      Project Communications
           Management
What is Competitive Myopia?
• When they define their competition too
  narrowly and acknowledge only direct and
  immediate competitors




               Project Communications
                    Management
What leads to Competitive
              Myopia?
• The natural evolution of the industry.

 .




               Project Communications
                    Management
What leads to Competitive
          Myopia?

The clustering phenomenon.




         Project Communications
              Management
Signs of Competitive Myopia

A company allows small niche players to
coexist with it.

The loyalty of a company’s supplier is won
by a nontraditional competitor.



              Project Communications
                   Management
Signs of Competitive Myopia

New entrants, especially those from
emerging economies, are underestimated.

The company becomes helpless against a
substitute technology.



             Project Communications
                  Management
How to break Competitive
           Myopia?

Broaden the scope of the product or
market.

Consolidate to squeeze out excess
capacity.



              Project Communications
                   Management
How to break Competitive
           Myopia?

Counterattack the nontraditional
competitors.

Refocus on the core business to
concentrate limited resources in the most
successful area.


              Project Communications
                   Management
Volume Obsession



     Project Communications
          Management
What is Volume Obsession?
• Too much money is being spent for the
  company to make money.




               Project Communications
                    Management
What leads to Volume
           Obsession?
The high-margin pioneer.

The fast-growth phenomenon

The paradox of scale.

The ball and chain of unintended obligations


                Project Communications
                     Management
Signs of Volume Obsession

Guideline-free, ad hoc spending.

Functional-level cost centers.

A culture of cross-subsidies.

Stakeholders say numbers are not good.

               Project Communications
                    Management
How to break Volume
          Obsession?

Identify where the company’s costs are.

Convert cost centers into revenue centers
or profit centers.

Move from vertical integration to “virtual
integration”.

               Project Communications
                    Management
How to break Volume
          Obsession?
Outsource non-core functions.

Reengineer to automate processes to
improve cost efficiency.

Implement target costing

Become a world-class customer.
              Project Communications
                   Management
The Territorial Impulse



        Project Communications
             Management
What is Territorial Impulse?
• As companies grow they tend to organize
  themselves into “functional” and later
  “regional silos”. However, the various
  units into which companies organize
  themselves don’t always get along well
  with each other, for various reasons.



               Project Communications
                    Management
What leads to Territorial
        Impulse?

   The corporate ivory tower.




         Project Communications
              Management
What leads to Territorial
          Impulse?
Growth requires the institution of formal
      policies and procedures.




             Project Communications
                  Management
What leads to Territorial
          Impulse?




The informal, spontaneous culture is
           extinguished.

           Project Communications
                Management
What leads to Territorial
          Impulse?


A company’s culture is dominated by one
        functional specialty.




             Project Communications
                  Management
Signs of Territorial Impulse

Dissension - a lot of headstrong
lieutenants instead of one strong general

Indecision – decision-making is an
agonizing or even impossible process



              Project Communications
                   Management
Signs of Territorial Impulse


Confusion – one side doesn’t know what
the other side is up to

Malaise – nobody’s happy



             Project Communications
                  Management
How to break Territorial
            Impulse?

The leader must bring all the people
together in a common cause.

Rotate the people in and out of different
functional or geographic silos.



               Project Communications
                    Management
How to break Territorial
            Impulse?

Create permanent cross-functional teams.

Reorganize around customers or products
rather than around function or geography.




              Project Communications
                   Management

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Project Communication Management Lecture 9 Habits

  • 1. Project Communication Management Lecture 9 Destructive habits in organizations and projects Project Communications Management
  • 3. Why Do Good Companies Go Bad? • In a nutshell: Good companies fail when they are unable or unwilling to change when their external environment changes significantly. Project Communications Management
  • 4. Denial Turf Arrogance Wars 7 Volume Habits Complacency Obsession Competitive Competence Myopia Dependence Project Communications Management
  • 6. What leads to Denial? • Denial of emerging technologies. Denial of changing consumer tastes. Denial of the new global environment Project Communications Management
  • 7. Signs of Denial • “Hey, we’re different, so there’s no way it can happen to us.” The company is too proud to admit that someone else has come up with a better way. The company ignores, rationalizes, or blames others for its situation instead of admitting its fault. Project Communications Management
  • 8. How to break the habit of denial Look for it Project Communications Management
  • 9. How to break the habit of denial Assess it Project Communications Management
  • 10. How to break the habit of denial Change it Project Communications Management
  • 12. What is Arrogance? • Offensive display of: Superiority Self-importance Pride Disdain (contempt) … because of an inflated sense of self Project Communications Management
  • 13. What leads to Arrogance? • Exceptional achievement in the past David conquers Goliath The company pioneers a product or service Project Communications Management
  • 14. Signs of Arrogance • The company stops listening The company becomes extravagantly eager to show off. The company begins to act like a bully, both internally and externally. Project Communications Management
  • 15. Signs of Arrogance • The company becomes high-handed and abuses rules The company favors those who validate its views and gets rid of those who are critical. Project Communications Management
  • 16. How to break the habit of arrogance? • Rotate management to new challenges. Implement nontraditional succession planning. Diversify the talent. Change the leadership. Project Communications Management
  • 17. Complacency Project Communications Management
  • 18. What is Complacency? • Complacency is the sense of security and comfort that derives from the belief that the success that’s taken place in the past will continue indefinitely. Project Communications Management
  • 19. What leads to Complacency? • The company’s past success came via a regulated monopoly. The company’s success was based on a distribution monopoly. The company was “chosen” for success by the government. The government owns or controls the business. Project Communications Management
  • 20. What leads to Complacency? • The company’s past success came via a regulated monopoly. The company’s success was based on a distribution monopoly. The company was “chosen” for success by the government. The government owns or controls the business. Project Communications Management
  • 21. Signs of Complacency • The company is in no hurry to make decisions. The company’s processes are overly bureaucratic. Everybody has to get on board before a decision is made. Project Communications Management
  • 22. Signs of Complacency • The company is completely vertically integrated. Enormous cross-subsidies are in place – by functions, by products, by markets, by customers. Average costing and average pricing prevail. Project Communications Management
  • 23. How to break Complacency? • Reengineer to achieve high quality, eliminate waste, and reduce inefficiency. Decentralize profit and loss by creating and molding business units around products or geographies. Project Communications Management
  • 24. How to break Complacency? • Outsource – contract out all non-core functions. Reenergize – consider a new leader with a positive, opportunity-oriented vision Project Communications Management
  • 25. Competency Dependence Project Communications Management
  • 26. What is Competency Dependence? • Somebody else can be doing a better job, and if a company is unable to figure out what to do, it has become competency- dependent Project Communications Management
  • 27. What leads to Competency Dependence? • R&D dependence Design dependence Sales dependence Service dependence Project Communications Management
  • 28. Signs of Competency Dependence • Reengineering, reorganization, retooling have been tried and still no good results. The thrill is gone and the company is in a funk. Stakeholders are leaving Project Communications Management
  • 29. How to break Competency Dependence? • Find new applications where the same competency results in new value. Determine new markets where the same competency remains an asset. Project Communications Management
  • 30. How to break Competency Dependence? • Expand the range of your competencies by moving up or down the value chain. Refocus company resources into areas with more growth and profit potential. Project Communications Management
  • 31. Competitive Myopia Project Communications Management
  • 32. What is Competitive Myopia? • When they define their competition too narrowly and acknowledge only direct and immediate competitors Project Communications Management
  • 33. What leads to Competitive Myopia? • The natural evolution of the industry. . Project Communications Management
  • 34. What leads to Competitive Myopia? The clustering phenomenon. Project Communications Management
  • 35. Signs of Competitive Myopia A company allows small niche players to coexist with it. The loyalty of a company’s supplier is won by a nontraditional competitor. Project Communications Management
  • 36. Signs of Competitive Myopia New entrants, especially those from emerging economies, are underestimated. The company becomes helpless against a substitute technology. Project Communications Management
  • 37. How to break Competitive Myopia? Broaden the scope of the product or market. Consolidate to squeeze out excess capacity. Project Communications Management
  • 38. How to break Competitive Myopia? Counterattack the nontraditional competitors. Refocus on the core business to concentrate limited resources in the most successful area. Project Communications Management
  • 39. Volume Obsession Project Communications Management
  • 40. What is Volume Obsession? • Too much money is being spent for the company to make money. Project Communications Management
  • 41. What leads to Volume Obsession? The high-margin pioneer. The fast-growth phenomenon The paradox of scale. The ball and chain of unintended obligations Project Communications Management
  • 42. Signs of Volume Obsession Guideline-free, ad hoc spending. Functional-level cost centers. A culture of cross-subsidies. Stakeholders say numbers are not good. Project Communications Management
  • 43. How to break Volume Obsession? Identify where the company’s costs are. Convert cost centers into revenue centers or profit centers. Move from vertical integration to “virtual integration”. Project Communications Management
  • 44. How to break Volume Obsession? Outsource non-core functions. Reengineer to automate processes to improve cost efficiency. Implement target costing Become a world-class customer. Project Communications Management
  • 45. The Territorial Impulse Project Communications Management
  • 46. What is Territorial Impulse? • As companies grow they tend to organize themselves into “functional” and later “regional silos”. However, the various units into which companies organize themselves don’t always get along well with each other, for various reasons. Project Communications Management
  • 47. What leads to Territorial Impulse? The corporate ivory tower. Project Communications Management
  • 48. What leads to Territorial Impulse? Growth requires the institution of formal policies and procedures. Project Communications Management
  • 49. What leads to Territorial Impulse? The informal, spontaneous culture is extinguished. Project Communications Management
  • 50. What leads to Territorial Impulse? A company’s culture is dominated by one functional specialty. Project Communications Management
  • 51. Signs of Territorial Impulse Dissension - a lot of headstrong lieutenants instead of one strong general Indecision – decision-making is an agonizing or even impossible process Project Communications Management
  • 52. Signs of Territorial Impulse Confusion – one side doesn’t know what the other side is up to Malaise – nobody’s happy Project Communications Management
  • 53. How to break Territorial Impulse? The leader must bring all the people together in a common cause. Rotate the people in and out of different functional or geographic silos. Project Communications Management
  • 54. How to break Territorial Impulse? Create permanent cross-functional teams. Reorganize around customers or products rather than around function or geography. Project Communications Management