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Unlike Mister Sam, many chief executives tend to lose touch. The bigger the company, the more likely it is that the chief executive has lost touch with the front lines. This might be the single most important factor limiting such companies ability to deal with competition, change, and crisis.
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All the other factors favor size. Marketing is war, and the first principle of warfare is the principle of force. The larger army, or the larger company, has the advantage. But the larger company gives up some of that advantage if it cannot keep itself focused on the marketing battle that is taking place in the mind of the customer. As you read earlier, big is hard to manage. The shootout at General Motors between Roger Smith and Ross Perot illustrated the point. When he was on the GM board, Ross Perot spent his weekends buying cars. He was critical of Roger Smith for not doing the same. We ve got to nuke the GM system, Perot said. He advocated atom-bombing the heated garages, chauffeur-driven limousines, and executive dining rooms. He was right, but it took bankruptcy to blow things up. (What ever happened to Ross )
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Chauffeur-driven limousines for a company that s trying to sell cars Top management s disconnection from the marketplace is the biggest problem facing big business.
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If you re a busy CEO, how do you gather objective information on what is really happening How do you get around the propensity of middle managers to tell you what they think you want to hear How do you get the bad news as well as the good If you don t get the bad news directly, bad ideas can flourish instead of being killed. Consider the following parable, which I ve written about before, but which is worth republishing:
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The Plan In the beginning was the Plan. And then came the Assumptions. And the Assumptions were without form. And the Plan was completely without substance. The Workers And the darkness was upon the face of the workers as they spake unto their Group Head saying: It is a crock of shit and it stinketh.
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The Group Heads And the Group Heads went unto their Section Heads and sayeth: It is a pail of dung and none may abide the odor thereof. The Section Heads And the Section Heads went unto their Managers and sayeth unto them: It is a container of excrement. And it is very strong. Such that none may abide it. The Managers And the Managers went unto their Director and sayeth unto him: It is a vessel of fertilizer. And none may abide its strength. The Director And the Director went unto the Vice President and sayeth unto him: It promoteth growth and is very powerful. The Vice President And the VP went unto the President and sayeth unto him: This powerful new Plan will actively promote the growth and efficiency of the Company.
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The Policy And the President looked upon the Plan and saw that it was good, and the Plan became Policy.
One possibility of finding out what s really going on is going in disguise, or poking around unannounced. This would be especially useful at the distributor or retailer level.
An Example
Thomas Stemberg, the founder of Staples, believed in seeing the world from ground level. He shopped his stores like a customer. He would ask questions that a customer would ask, like, Where can I find a printer cartridge #96A In many ways this is analogous to the king who dresses up as a commoner and mingles with his subjects. The reason: to get honest opinions on what s happening. Like kings, chief executives rarely get honest opinions from their ministers. There s just too much intrigue going on at the court. The members of the sales force, if you have one, are a critical element in the equation. The trick is getting a good, honest evaluation of the competition out of them. The best thing you can do is praise honest information.
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