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Six Important Words
[Newsletter 6]
Some wise words from Michael Porter

What We Learn From the
Nortel Networks Meltdown

Many people were hurt by the astonishing implosion of Nortel Networks. Losing 3/4 of its market capitalization in 12 months, a drop of almost $ 300 billion, is horrendous. Yet John Roth said even in January that the company would still see a 30% growth in revenues. By mid February he cut this to a 15% growth and the roof fell in. So what can we learn from this. The National Post said, "Roth is now in the same boat with other CEOs who thought they were bigger than the market and not subject to the principle of full, true and plain disclosure."

However a more fundamental principle may apply. This is: "It's lonely at the top". Other phrases in the same vein are "As you become CEO, you hear the truth for the last time." and "The Emperor has no clothes." Particularly with a hard-driving aggressive executive such as John Roth, which of his lieutenants wants to express a counterview of what may really be happening. After all, John Roth was named as Canadian Business Man of the Year by Time. So who has the courage to be "disloyal" and get off the bandwagon.

This phenomenon is magnified by another process which Edward De Bono, the creativity expert, has labeled the Intelligence Trap. Very bright people look at messy problems, cut through the complexity and quickly figure out solutions. Unfortunately on rare occasions, their solutions are wrong. What they do not realize is that their subconscious is at work. Unknown to them, it is filtering out data counter to their solution and highlighting data that supports their solution. They are also very quick in defending their own solution and do it well. Their less quick co-workers, who still have not figured out how to cope, defer to them. So the bandwagon is created.

How do the rest of us make sure we are not "lonely at the top"? Perhaps we feel we have created conditions where anyone feels free to express an opinion, a type of equality of ideas. "My door is always open!" (but you have a door and I don't.) However hard you work at it, it really is impossible to get straight talk on all occasions. The relationships within the organization and the personal goals and risk-taking sense of individuals get in the way.

So the CEO may turn to outside help. A good external board or an external advisory committee or the significant other may be the answer. However the bounds of friendship and politeness may stifle potential conflict; and they may not have all the facts. A good coach, who will tell you it like it is, may be what works best for you. Of course you may have to fire him or her if you don't like the message. But at least you will have heard the unpalatable news once!

If you would like wise, external advice, SMM will be happy to work with you. Our help can be configured to meet exactly the needs you have. Our strengths, experience, creativity and practical common sense can complement those of your company. So write us a Fast Message today, , on what you're looking for.

Barry Welford




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Six Important Words
Some wise words from Michael Porter

Internet marketing consultant and strategy coachInternet Marketing Strategy Newsletters

 Copyright 2001 Barry Welford, Montreal, Quebec, Canada