Page 202 - (DK) The Business Book

200 AVOIDING COMPLACENCY

action. British Petroleum (BP), once
owned by the British government,
became publicly owned in 1987.
Its new CEO was John Browne, a
nonexecutive director of Intel, who
was influenced by Andy Groves’s
thinking on the importance of
paranoia. Browne was concerned
about something far bigger than
rival companies—something that
could harm the business of not
just BP, but the entire oil industry.
Browne reviewed the available
data on climate change, listened to
experts in the field, and considered
the impact on the business of BP.
He recognized climate change as
a slow-manifesting issue, but
realized it could impact the oil
industry. In 1997 he gave a seminal
Victorinox’s business model relied on have to be taken. The development speech at Stanford University, CA,
the sales of its Swiss Pocket Knives, of other products—including publicly acknowledging climate
but a strategic inflection point—the watches, travel gear, fragrances, change as a reality and committing
prohibition of knives on planes—forced and fashion—that could be sold BP to do something about it.
it to add luxury products to its range.
at airports was accelerated. The This was a bold move for an
company also began to explore oil company at a time when rival
The impact of the 9/11 terrorist new market opportunities, such as companies were trying to ignore
attacks on the US in September selling in China, India, and Russia. the issue. BP pursued a strategy of
2001 was felt across the world; for Victorinox also took action to investing in alternative energy, and
some businesses it proved to be preserve one of its core strengths— it was the first oil company to set
a strategic inflection point. One a skilled and loyal Swiss work force. targets for reducing its own
such company was Victorinox, Layoffs were prevented by taking greenhouse gas emissions.
manufacturer of the ubiquitous crisis measures such as reducing Employees were asked to find ways
Swiss Pocket Knife. The company shift times, canceling overtime,
had been producing pen knives encouraging planned vacations,
since 1884, but it was hit by new and temporarily lending workers to
airline safety regulations that other Swiss companies. Victorinox
prohibited knives to be carried not only survived, but thanks to its
on board aircraft following the 9/11 new products, was able to enhance Real sustainability is
attacks. This had a drastic effect its high-quality brand image. More about simultaneously
on Victorinox, because purchases than 60 percent of the company’s
being profitable and
of its products at airports around turnover now comes from items
responding to the reality
the world accounted for a significant other than pocket knives.
and the concerns of the
portion of its annual sales. world in which you operate.
Corporate sales also tumbled. Averting catastrophe John Browne
By the beginning of 2002, pocket- To detect the approach of a strategic
UK former CEO of BP (1948–)
tool sales had fallen 30 percent in inflection point, the CEO of a
just a few months. The company company, in conjunction with the
recognized that this could board, must analyze all the available
represent the start of a long decline, hard data, listen to the softer
and that to survive, action would information, and then take decisive