Page 157 - MS Year in Review 2020
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revitalization. During the 1980s, the lens typically employed was the “market share
growth” matrix, as originally developed by the Boston Consulting group. This was
not a correct lens for the company’s problems.
Another implicit lesson in the example of Kodak is the need to correctly identify and
define the problem(s) facing a company. Stated differently, it is critical to know
what really needs to be fixed, so that an appropriate solution can be created.
The Wrong Solution to a Problem.
A very important lesson about unsuccessful leadership of organizational crises is
that the solution must match the problem. Sears attempted to solve its crisis by
redoubling on its current core business of merchandise retailing. This was not the
correct solution. Archie McCardell at Navistar tried to solve his company’s cost
problem by taking on the Union. This too was not the correct solution. Westfield
faced the need for diversification, but chose to diversify into an area (media) that
not only did not help, it actually almost caused the company to fail.
Failure To “Cross the Rubicon”
Another important lesson of unsuccessful crisis resolution is failure to “Cross the
Rubicon.” As discussed in the case of Sears failed crisis leadership, in the days of
the Roman Empire, when Roman armies crossed the Rubicon River there was no
turning back. They went into battle and either won or lost.
Sears never “crossed the Rubicon.” Even though the transformation strategy to deal
with its crisis was a success, the strategy was reversed, ultimately leading to
corporate failure.
Edward Telling’s leadership failure was to neglect the culture and mindset of Sears
managers. Effectively there was not one but two Sears: the “Old Sears” and the
“New Sears.” The “Old Sears” (the retail merchandise division) viewed itself as a
retail merchant. The members of “Old Sears” viewed new Sears as not “the real
Sears” and hence it was disposable!
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