Is progress possible without crisis?

Nov 24 2005 by Max McKeown Print This Article

George Bush in a hurricane, Jacques Chirac in a riot, Sony in a pickle over copy protection and the decline and fall of the U.S. automobile industry all remind us what happens when leaders lose sight of the imperative to "make things better".

In sport, it is the game that forces improvement in the end. Each time a team competes it reveals how good it is in relation to the competition. But if a team is winning, its attention often starts to stray to internal politics, contract renegotiations or chat show appearances.

In other words, once the 'outer' game is secure - or at least once it looks secure – things turn inwards.

We see a similar problem in the world of business where GM and Ford have known about the need for a revolution for at least a decade but done nothing to act on it.

So why did they wait crisis struck? Why did they wait until their credit was rated as junk? Why was there no action until after they lost $4 billion and $3 billion respectively? Why didn't anyone at the top act decisively before they racked up debts between them of $450 billion - the equivalent of a quarter of the United Kingdoms gross domestic product?

Haven't they heard of continuous improvement? Didn't anyone tell the CEOs of either company that Toyota made better cars with higher margins? Or is it simply the result of hiring CEOs who were already retired, independently wealthy or only three years from retirement?

Similarly, music and media companies continue to deny the unstoppable move towards freely-distributable digital music and movies. Their only choice is how well or badly to adjust to what consumers want.

Sony has shown repeatedly that it is in denial. It has squandered the power of its Walkman mega-brand simply because it wanted to believe in a world that never was. It even had a digital music player before the iPod but could not bring itself to accept the MP3 format.

President of Sony Entertainment, Ken Kutaragi, the single-minded genius behind the PlayStation, explained that, "he and other Sony employees have been frustrated with the company's reluctance to release products that support the more popular MP3 format, such as the Apple iPod."

"The reason for the reluctance," he added pointedly, "was mostly because Sony, which is also a major player in the music and movie industry, has had concerns about content rights."

He went onto describe how, "the tables are slowly turning at Sony, and Kutaragi sees that new devices, such as the PlayStation Portable (PSP) will help Sony to reach levels of success it enjoyed in the past with Walkman and other innovative products."

Let's rewind to the phrase "the tables are slowly turning", and pause to consider it.

Are these technological tables that are slowly turning? Are they legal tables in slow motion? Or are they cultural, political, organizational and distinctly human tables that are dragging their feet?

The most disturbing insight into Sony's corporate psyche emerged from the public relations fiasco that recently erupted around its choice of copy protection software for it's audio-CD products.

Not only was the software labelled "spyware" by Microsoft because it made it easy for hackers and unethical advertisers to get into your computer, it was also stunningly ineffective since it could be circumvented with a little piece of tape on the edge of the CD or by simply deselecting 'Auto run' on your Windows computer.

In other words it doesn't really protect your CD from being copied and it won't stop any pirates whose "tables" are not turning at all slowly.

Oh… and there's also the small irony that Sony's itself used copyrighted software

from a Norwegian programmer called DVD-Jon – who has made it his hobby to find ways of stopping content provides preventing customers using the products that they have bought - without acknowledgement.

What Sony seem unable to grasp is that some things are impossible given a particular set of resources and constraints. Stopping pirates copying music or movies is one of those things.

What man can digitally lock, man (or a teenage approximation of the same) can unlock. And distribute
What man can digitally lock, man (or a teenage approximation of the same) can unlock. And distribute. And what consumer who wants an electronic copy of a movie that he already owns is going to wait patiently until Sony or one of their competitors can be bothered to build their own iMovies equivalent?

Blaming those "darn' kids" - without whom revenues would presumably be booming - is proving to be an expensive game of "pass the buck, drop the buck", distracting corporate attention away from the real causes of consumer discontent and preference.

One such reason for discontent was explored in a recent L.A. Times piece which revealed that even studio executives are far from impressed when they are subjected to the sort of cinema-going experience that their paying punters are meant to put up with.

"As head of production at New Line Cinema, Toby Emmerich is not your typical moviegoer. So when he wanted to see "War of the Worlds" the other night, his choice was between seeing the film in a theater with a tub of popcorn or watching it in a screening room at Jim Carrey's house, with a private chef handling the culinary options. Despite this seemingly loaded deck, Emmerich opted for a real theater.

"I love seeing a movie with a big crowd," he says. "But I had no idea how many obnoxious ads I'd have to endure — it really drove me crazy. After sitting through about 15 minutes of ads, I turned to my wife and said, 'Maybe we should've gone to Jim Carrey's house after all.' "

DreamWorks marketing chief, Terry Press, had a similar experience. "My own children turned to me and said, 'Mommy, there are too many commercials!' Now, when the lights go halfway down, I'm filled with dread. The whole uniqueness of the movie going experience is being eroded by all the endless ads."

To add insult to injury, industry bodies such as the RIIA and, to a lesser extent, the MPAA, look as impotent in the face of this reality as Jacques Chirac in a riot, George Bush in a hurricane, Sony in an Apple stew - or the American automobile industry's efforts compete with companies that actually want to improve what they sell before they have to.

Was it a coincidence that Chirac – one of the most experienced operators in European politics – was facing allegations of backhanders for building contracts, payment for fake jobs, and fraud at the time he seemed so out of touch with events on the streets of France?

As Spiked, the political webzine commented: "President Chirac responded by saying not a word about the growing unrest for a week, presumably in the hope that, if he pulled the bedclothes over his head and whistled to himself for long enough, the bogeymen would eventually just disappear."

George Bush's startling similar ineptitude in the aftermath of Katrina also came as he faced growing difficulties in Iraq and the unfolding scandal of the leaking of the identity of a CIA agent by one or more of his most senior aides.

"Bush showed up ready for work. Blue collar, unbuttoned, and sleeves rolled up," wrote David Remer, Managing Editor of WatchBlog. "The symbolism of a blue collar worker showing up ready for work was unmistakable. But, like a blue collar worker who shows up for work a week late, he should be fired."

What all these examples have in common is the way in which leaders and their teams have become so focused on the 'permanent campaign', the headlines, the legal difficulties - that they have lost sight of the job that their customers, employees, or citizens imagine that they are to do: to "make things better".

Unfortunately crisis does not help these leaders because it just adds one more complex task to their already bulging to do lists.

This is why progress depends on a man or woman with a plan and a desire to improve that works like a necessity field – making the largely unglamorous job of moving forward seem urgent whatever the results of the last game, election, poll, or fiscal year.

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About The Author

Max McKeown
Max McKeown

Max McKeown works as a strategic adviser for four of the five most admired companies in the world. He is a well-known speaker on subjects including innovation and competitive advantage. His latest book, #NOW: The Surprising Truth About the Power of Now, was published in July 2016.