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Focusing on Core Strengths: Disney April 21, 2010

Posted by David Dirks in business strategy, Decison making.
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The ebbs and flows of business strategy can vary how any enterprise, large or small, approaches the challenge of continual growth.  Very often the variances in strategy focus can either help or hinder growth.  Business owners are often faced with the challenge of ‘do we expand our product and/or service focus to other markets?’ in order to find additional opportunities for revenue growth.  The implications of expanding or contracting a business strategy are tremendous.  The world is littered with the carcasses of businesses that either died  because they wouldn’t expand their strategy beyond their current core or collapsed because they reached too far and drove themselves into the ground.

When you’re looking for additional revenues, what is the right strategy?  Expansion outside of core or staying within your core?

Disney and their movie business is a good example of deciding to go outside and then dealing with the consequences.  For more than a decade, the Disney studio cranked out one-off movies that had no connection to any core Disney brand like Cinderella.  To be sure, Disney did have some great success with movies series like “Pirates of the Carribean” and their Pixar division has done well.  According to the Wallstreet Journal (WSJ.com), everything else Disney was releasing was suppressing their overall studio results.

Predictably, Disney is now re-focusing it’s studio efforts around expansion of existing movie franchises (i.e. Muppets).  Their strategey: invest and expand studio movie offerings built around strong movie franchises that can also help their other revenue generating divisions.  For example, their popular ‘Hanna Montana’ franchise has not only spawned successful movies but has allowed Disney to roll Hanna Montana products across several of it’s distribution channels.  That kind of cross-pollination rings the cash register every time.

With its recent acquisition of Marvel Entertainment, Disney now has access to thousands of branded characters that they can develop deeper franchises with.  It also comes with an already established and faithful base of fans across the world…much like its own base of characters that Disney developed more than 80 years ago (Mickey Mouse for example).

The question for the rest of us is this:  Is there a litmus test that we can apply to determine whether or not it makes sense to stay within our core product and/or services or whether we need to expand outside of it?  Disney did both.  Focusing on what it already owns that has strong brand recognition and acquiring a new set of characters via Marvel that also have strong brand recognition.

If there is a litmus test, I’d put my money on the following:

1.  What do the numbers really tell you? Tricky, because numbers can lie.  However, there is always something to be said for doing the math first taking great care to insure that the math is not ‘funny math’ that is created just to make our case either way.  How does revenue growth and profitability of a non-core business strategy compare to our current core?

2.  Why leave your core business strategy in the first place? Have we done all that we can to improve results and expand our growth opportunities within our current core strengths?  Can we do a “Disney” and focus our resources on our current core business strategy while looking for outside opportunities (new products, services, acquisitions) that meld well our core strengths?

3.  Do we really have the expertise and depth it takes to run a non-core business ? There are plenty of times when a business will take on a non-core business strategy in the name of profits over expertise.  In most cases, since they don’t have much expertise to a business outside their core, they happily bleed the cash cow down until they end up selling the carcass to someone else.  You’ll hear senior management say, “We’ve decided to divest ourselves of assets that are not within our core business”.  CEO’s under pressure from shareholders and their board for accelerated growth and profits will often scramble to find a business that can bring cash into the fold.  Almost too predictably, a few years later they end up selling a non-core business often for much less than they paid for it.

Pursuing a non-core business strategy always has varying degrees of risk.  In the long run, I favor sticking to whatever core expertise and business strategy you have.  Expanding your core business with products and services that are directly or indirectly related to your core business is usually the best bet.  Disney’s example of extending their core movie business franchise by acquiring other strong character-based brands (i.e. Pixar, Marvel) makes sense and money.

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Making Winning Business Decisions: Podcast November 5, 2009

Posted by David Dirks in Decison making, Dirks On Strategy: Episodes.
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Michael McGrath is recognized as an expert in decision making. He created Decide Better! in September 2008, a company dedicated to helping companies and individuals make better decisions. The Decide Better series of books was launched with Decide Better! for a Better Life in August 2008 followed by Decide Better for College in March, 2009.

His newest book, Business Decisions, is the culmination of more than 25 years of advising executive globally, managing one of the most successful consulting firms in the world, launching new businesses, and doing a successful turnaround at i2 Technologies. Released in the beginning of October 2009, it has already received critical acclaim.

Michael has appeared as a decisions expert for CNN International, ABC, and Fox Business. In addition he has done more than 100 radio interviews, presented speeches around the world and been quoted in many articles.

Website:  http://www.decidebetter.com

Principle of organizational memory January 13, 2009

Posted by rickbron in Bronder On People, Decison making, Getting what you want, Grow your skills, Handling hot buttons, Management, Management Principle, Managing up.
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p5130012.jpg 

Does it irritate you when senior management reserves the best parking spots for themselves? How about when the executive have their own dining room, or when they travel, they travel first class. The Big Dogz do not like these irritants any more than you do — they ignore them for now. As the Big Dogz build their personal power and acquire more position power, they remember what it was like to be in the trenches. The Big Dogz apply the principle of organizational memory!

 

It is not effective to complain or fret about senior management actions or attitudes. These actions are not within your circle of control — you cannot change them. The Big Dogz capture the irritants in an ongoing file called “Things I will not do when I get to be a senior manager.” It is not the place of the Big Dogz to publicly criticize or critique senior management behavior. If you are asked for feedback or your offer of feedback is accepted, then you may give your observation. Otherwise, make an entry into your file. When you get to that level, review your file and make sure you are not doing those actions.

 

Many times, the average manager will automatically adopt the behaviors of their predecessors. Well, the VP of Development gets to park in this spot, so I may as well do it. I deserve it! I am flying on that business trip with two of my people. They are in coach and I am in first class. I deserve it! What these managers do not recognize is that the things that irritate them also irritate others. Why do something that irritates your followers and reduces your personal power? One of the first tasks you undertake when you are promoted is to evaluate what your predecessor did that irritated you. Then decide if you will continue or eliminate the practice. But first, you need to be promoted. You get promoted by managing power.

 

I have talked about how to get power in previous entries, but here is a quick review. First, you get personal power, and then because you are more effective than your peers are, you are promoted to a job that has position power. You use this position power to access more potential personal power. This new personal power gets you more position power – and it is a growing spiral.

 

Here are some examples of applying the principle of organizational memory:

 

  • Management planning meetings are held offsite at a nice place and include lunch or dinner. Key project planning meetings are held in the big conference room and everybody gets their own lunch. The Big Dogz will make sure that moving management meetings off site are really required. They will select key project planning meetings to be held offsite.

 

  • Senior management waits until the last minute to make change announcements, and then they expect a quick implementation. The Big Dogz know that sometimes this is unavoidable for solid business reasons. Most of the time it is not! When you get to be the senior manager, you will include as many people as early as possible in your decision-making.

 

 A classic example of organizational memory is the response of General Norman Schwarzkopf in the 60 Minutes interview during Desert Shield. He talked about how when he was a battalion commander in Vietnam, the generals were in the rear eating off white tablecloths and being served by soldiers. His response was “That’s not going to happen in my command. It better not happen!”

 

Not all us have the opportunity to have such clear irritants. For sure, you experience actions and attitudes that irritate you. I think this situation is quite widespread in the corporate world, but I need data to support that assumption. I have a request of you.

 

Please send me your observations about something senior management does that is irritating. In this economy, there is an abundance of examples. If you could state what they did and how you would do it differently, it would be useful for everyone.

 

When I get a large enough number of these responses, I will summarize and post them here. I will also send you an email alerting you to the posting so you can see how others are applying this principle along with a file containing the responses. I promise to scrub them so the source is not identified.  Having current real world examples can really reinforce this principle and give the Big Dogz suggestions on what to do in their organizations. Please take the time to be heard.

 

rbonder@gmail.com

Push decisions lower using the Decision Making Matrix (DDM) November 1, 2008

Posted by rickbron in Bronder On People, Decison making, Delegating decisions, Management.
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p5130012.jpg Are you spending too much time making decisions for others? Are people making decisions that you should make? Many people consider the opportunity to make decisions a motivating factor. The Big Dogz know how to balance decision making down to the right level. They use a Decision Making Matrix (DMM) to facilitate the decision making of their direct reports.

 

Customize a DMM for each direct report. It is simple to construct and will show you how much decision making you are letting the person make. The DMM has four columns:

 

Column 1 — The Decision Making Opportunity (DMO)

These are the key opportunities for making a decision in a person’s job. You do not need to include all the DMO’s, but rather focus on the key DMO’s.

 

Examples of DMO’s

Select an approach for solving a problem

Reimburse a customer for a faulty product

Create a new product within a current product line

Design a new process for achieving a cross functional goal

Respond to a custom quote request from a customer

 

Column 2 to 4 — Who gets to make the decision?

  1. Decision made by you, you do not need to inform me
  2. Decision made by you after consulting with me
  3. Decision not made by you, see me

 

Place a check in the appropriate column for each DMO. Even people at the same level will start with a different DMM. With the focus on moving decision making to the optimum column, you can identify the most effective DMM for a position.

 

The DMM is an effective tool to help you identify when your direct reports can already make decisions and where you need to coach them in how to make decisions. This coaching is an opportunity for you to provide a motivation factor for your people.

 

Once you have identified the DMM for a specific person; review it with them and get agreement on where the checks are. When they come to you for a decision for something that is in their responsibility, remind them of the DMM. Ask them to make the decision. If they come to you with requests for decisions in column B, ask them what they would decide. If it is correct, do it and consider moving that DMO to column A.

 

Periodically review the DMM for effectiveness. Ask your direct reports to provide their perspective on the DMM.

 

The Big Dogz know that having a DMM for their direct reports helps develop the staff’s decision making skill and frees up time for the manager. Think about creating a DMM for each of your direct reports in the next 30 days. Oh, and by the way, create one for yourself and review it with you manager.