Daily Archives: August 21, 2008

Avoid Corporate Death by Beating the Odds

No company is created to fail. Yet the odds are stacked against corporations surviving more than a few decades. Many once-greats are dying a slow death, losing much of what made them superior. Others have expired quickly. And new research shows that many more are starting to atrophy astheir leaders turn their focus to managing complexity — and away from leading for the future. A new, nine-element framework can help you diagnose your organization’s health, and address the factors that increase corporate life expectancy.

Robert Rudzki, President of GreyBeard Advisors, author of Straight to the Bottom Line and Beat the Odds, and blogmaster of Transformation Leadership just published his manifesto on ChangeThisAvoid Corporate Death: Nine Essential Elements Will Keep the Reaper From Your Company’s Door. In this paper he notes that companies that do not lead firmly for the future have a much greater chance of corporate death than those that do, and that, more importantly, resilient organizations appear to have nine fundamental traits in common – which he has defined as the Beat the Odds (BTO) Guidance Framework.

As “proof” of its success, he offers a recent study by the Iacocca Institute of Lehigh University and BetterManagement.com that asked 700 executives to rank their companies against the framework. The result — companies with higher BTO scores also had a return on invested capital (ROIC) or a return on equity (ROE) that exceeded their corporate cost of capital. Correlation may not be causation, but it sure is impressive nonetheless. And considering that there have been more than 600,000 outright business failures in the US alone in the past 10 years, any little bit helps.So what’s the basis of the framework? The following nine rules that define how a resilient enterprise should operate.

  1. Establish a Purpose
  2. Live and Defend Your Core Values
  3. Acquire a World View / Create the Future
  4. Articulate an Inspiring Vision / Lead at All Levels
  5. Develop Strategies / Business Models / Competencies Consistent with the Foregoing, and Linked to Each Other
  6. Assure the Organization is Aligned and Energized
  7. Measure What You Want to Achieve and Nothing Else
  8. Decide! Act! Get On With It!
  9. When in Doubt, Use Common Sense

For more information on the framework, see the manifesto.