Righting the Ship

As compelling as it to follow-up on Google’s +1 or Facebook’s latest partnership with Skype, offering, in writing about those unfortunate but all too common scenarios where companies with a seemingly insurmountable lead take the never planned or expected left towards the road, it became hard to think about anything else. The Sinking Ship needs a little closure.  

The Problem – Recognizing The Boat Leaks
As we think about MySpace, Yahoo, AOL, and even a company close to our heart who have either all undergone a major repositioning (a nice way of saying they are a shadow of their former selves), one of the biggest challenges they seem to face came from admitting they had a problem. The line between confidence and complacency get crossed quicker and more easily than those in the lead would think. And knowing you have crossed into the occupied territory before seeing guns drawn is harder than most think. Those blinders that lead to success contribute to its downfall. What we think – those on the deck will not notice any leak has sprung. The people on the frontlines, those below decks will know. Their feedback can be noisy but it shouldn’t be ignored because the view from atop looks clear.

Tack 1 – Humility
When MySpace hit 50 million users, no other company in the social world could come close. Yet, it was a fraction of what Yahoo or MSN had for their email users. It looked to represent such an enormous percentage of a coveted market, and the growth only contributed to that feeling of invincibility. I wonder though, how many in the company said we aren’t done, and while we should celebrate every milestone, our actual user base is still way too small. For Yahoo, post Overture acquisition, pre-launch of Google AdWords, did the company say this market will become a $20 billion market in less than ten years. We have not come close; or did they just assume that they would maintain their lead and own the growing market.

Tack 2 – A Constitution
It is almost fitting to right about this topic after celebrating this country’s Independence Day. When thinking of enduring brands, two definitely come to mind. The game of golf and the United States. Golfers make more analogies to life than almost any other person with another sport, for good reason, though. The game has at its core, a strong but fair set of rules, with an overall design that allow for people of all levels to play. More talented people play better but not because they bend the rules. It is a meritocracy that opens its arms to all who want to give. That feels a lot like the core of the United States. Despite so many of its own people’s best attempts to screw it up (politicians), continued success stories including Mark Zuckerberg show the good and the bad but also that more good than bad exists. A company doesn’t have to have a mission statement but it must have a reason.

Tack 3 – Unity
Companies are like people. Makes sense as they are a collection of people, but it’s easy to think they are somehow different. As they are like people but with more of them, they need many of the same things – dedication, commitment, faith, trust, belief, and all the other traits necessary to overcome the adversity that life will bring. They also need cohesion. Those bonds need continued examining and strengthening. The bonds cannot be allowed to fray and snap. When that happens, it’s very hard to simply retie a knot that once kept a belief in place.   

Tack 4 – Who Do You Want to Be?
Apple’s comeback story is hard to believe. From almost out of business to the most valuable technology business. They are the exception to the rule. The question for any business is, “Are you a nightclub or a high-end restaurant.” The night club can sizzle, but none are based on substance. It is an unsustainable advantage that regardless how hot, that star will fade. Bands, movie stars all go through the same challenges. None remain on top always. The best close, take a break and rise again after an absence. A great restaurant though can remain a world class restaurant well after the initial buzz has gone. Rolex, Mercedes, Porsche, all have lost their luster and struggled at times, but all have maintained their strength. As hard as it is for a performance guy to admit, brand matters. Creating an emotional connection that comes from the quality of the product or experience matters. Brand based on game mechanics (the nightclub) doesn’t create that connection.

Tack 5 – If It Smells Like Manure It Probably Is
At the end of the day, if a company has the wrong strategy and a poor product, all while not having a moat (better sodas exist than Coke), you are at risk. Sometimes businesses will need hospice care. You can’t fix them, but you can make everyone there feel good about the job they do. You also need a truly committed leader. It’s even harder than a startup. You are bigger, slower, and carrying immense baggage. You need to weed out those who aren’t committed and get as close to a new entity feeling as possible. This where the captain needs to be willing to go down with the ship not simultaneously crafting the exit plan. And above all, they need to be realistic. There is a difference between righting a ship and strapping wings on to a boat and thinking it will fly.