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The TeleChoice Take
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It has been hard for all of us to watch the industry’s painful slide
over the past two and a half years. For those of us who focus
on strategic decision-making, the most painful aspect has been
the elimination of intelligent, creative thought processes within
virtually every surviving industry player. It’s as if strategic
perspective has become a dirty word that no one dares consider.
We know that the readers of this newsletter are creative and
intelligent decision makers. But we also know from working with each
of you that you share in this frustration. We’ve heard the same
story from many of you: "I know we’re doing all the wrong things --
the strategy is all wrong. But, they don’t want to hear it. All they
care about is short-term financial tactics. By the time it
becomes obvious that we’re headed in the wrong direction, it will be
too late, but hopefully I’ll be gone by then."
We may all be gone by then. Telecom companies are being painted
with such a tainted brush that we may all have to join the Foreign
Legion to avoid the scorn of our former friends and relatives, or join
the Peace Corps or launch some human services ministry to prove
that we’re actually capable of some tangible goodness, despite
the stupid, selfish and criminal acts for which our industry is
becoming best known.
Of course, as an industry, we have no one to blame but ourselves.
As for the criminal and immoral charges, I claim ignorance (although
I wish I were so innocent when it comes to greed and pride). But
I’m seeing clear evidence of the stupidity of our industry every day,
and I can no longer stand silent before it.
Current Situation
Clearly, the industry is in turmoil. I don’t need to quote statistics
about stock prices, bankruptcies, layoffs, and shutdowns. You
know them better than any number could communicate. You’ve
lived them. They have fueled both your tears and anger.
There are fewer companies in our industry today than two years
ago. Far fewer. And each of the surviving companies has
fewer employees. Far fewer. In theory, at least, those that are left
are the best and brightest. But you sure wouldn’t reach that
conclusion by watching today’s decision-making.
I don’t care what part of the industry you live in -- service
providers, equipment vendors, wireline, wireless, data, voice,
domestic, international -- it’s the same everywhere. I don’t care
what aspect of strategy you’re involved in -- corporate
strategy, operational strategy, network strategy, sales strategy -- it’s
all the same. It’s not strategy. It’s not even decision-making.
It’s decision avoidance. What businesses should we keep?
What businesses should we launch (oops, skip that question entirely)?
What business should we exit/shutdown/sell? On which markets
should we focus (what’s focus???)? What markets should we exit?
What are the right channels to market? How should we position
and differentiate? What products do we keep? Which new products
do we develop? How do we price?
The right answer to these types of questions requires deep analysis
and the courage to face what is true about your company
(especially what is lacking) and what is likely to be true as
the landscape shifts.
Courage is the missing ingredient.
And all of the analysis today is financial -- and short-term.
If the right questions are being asked (see above for a partial list)
the only answers that are being considered are those with dollar signs
in front of them related to the next 3 - 12 months (especially the next
3 months).
More often than not, the only time that the "right" questions are
being asked is when they are the tactical details being worked out
to complete the financial spreadsheet that goes along with the
real questions demanding all of the intellectual brainpower of
the industry:
- How do we come out from under bankruptcy?
- How do we avoid going into bankruptcy?
- How do we make our current funding last as long as possible?
- How do we make customers and investors believe that we’ll
survive when no one is willing to believe anything?
Don’t get me wrong. I fully understand why these questions are
being asked. If the critical financial questions aren’t answered,
then there is no company -- there is no tomorrow requiring a
strategy. But, I tell you, if the other questions, the right
questions, aren’t also asked (and intelligently and creatively
and BRAVELY answered), then there also is no company -- there is
no day after tomorrow.
I’m also no fool to the fact that this is not really a new problem. In
fact, virtually every publicly traded corporation has "always"
kowtowed to investors and focused on quarterly financial
performance. However, this healthy focus on near-term
performance has traditionally been balanced with longer-term
strategic planning. It’s this balance that has been lost, contributing
to the unhealthy tumble in which we find ourselves. (I picture a
circus aerobat ungracefully falling from the high wire, as the
audience turns from smiles to faces full of fear and concern.) Unless
we pull together, find that safety net, and bounce back to a
healthy balance of near-term performance and long-term
strategic planning, then I fear the entire industry will just go
splat!
But, this isn’t just an industry problem; obviously, it’s also a real
threat to individual companies. No doubt, short-term myopia will
enable some companies survive this year, but what will be
left? Businesses with no strategic advantage? Markets to serve with
no value proposition to serve to them? Products and services to sell
with no effective channel to sell them? In short, companies with no
long-term hope. I’m talking about your company, not some
generic, nameless, faceless collection of fools. I’m talking about
your hope, or your hopelessness.
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What's Next?
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What Can You Do?
What do I ask of you? I ask you to be brave. I already know you
are intelligent and creative (you wouldn’t be reading this if
you weren’t!). I don’t care where you are in your organization. If
you are the CEO, then stand up to the investors to whom you’ve
been cowering. If you are somewhere lower in the organization,
then stand up to the executives around you. Demand that the
future viability of the company be given equal weight in making
the critical decisions to get through today to tomorrow.
Specifically, consider this:
- If businesses must be eliminated or sold, obviously, the math has
to work out given today’s financial realities, but make every
possible effort to keep the businesses that position the company
for long-term success given who the company is, what markets
are most defensible, and what creates the greatest competitive
value.
- If markets need to be exited and product lines eliminated,
obviously the cost savings must reach the target number, but in
doing the math, take into account the products and services that
are critical to your success in the markets that you can truly
win. Choose to focus on the right markets and maintain/develop
the offers that truly win in those markets instead of generally
cutting back across all markets and ending up without a
competitive offer to any market.
- If people must be laid off, clearly there’s a target number in mind.
But instead of bending to the temptation to do across-the-
board reductions or to political battles where the most stubborn and
well entrenched executive wins, think strategically. Which functions
are critical to your competitive identity and success? Which functions
are commodities that can be outsourced without significantly
impacting your competitive position? More strongly stated, where
would it be smart to outsource to partners that focus on specific
aspects full time, from many perspectives, rather than continuing
to overload the leftover resources and stretching them too thin?
These may be math equations that represent survivability, but they
are math equations that must be solved for two variables, not just
one.
Bottom line -- I’m not questioning your intelligence and creativity --
in fact I’m taking it for granted. Neither am I doubting your need
to make hard decisions to survive within very challenging
financial realities. All I’m asking is that you be brave enough to
re-ignite your strategic synapses and think hard (and carefully)
about the long-term implications of your very hard financial
decisions. These are not mutually exclusive topics -- stop acting
like they are.
The ability to cut through the confusion and fear in the industry,
to logically and sensibly and bravely ask and answer the
critical strategic questions, and to understand your
competitive positioning and differentiation and act accordingly has
never been more critical. Let us know if we can help.
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Need Some Help?
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TeleChoice helps companies everyday better position their firms
and products for success, whether re-examining fundamental
business strategy or clearly communicating unique position and value
in today’s tough marketplace. Contact us at info@telechoice.com.
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About TeleSparks: On occasion, we share with our industry friends
our views on major events and issues in telecom. We use TeleSparks
as the primary vehicle for sharing these (usually highly
opinionated) views, and we welcome your feedback. Feel free
to forward these on to others, but please copy us on the messages
so we have a sense of the extent of distribution of our views.
TeleSparks is generally authored by Russ McGuire, TeleChoice
Chief Strategy Officer, with input from others throughout the
TeleChoice organization. You may contact Russ
(rmcguire@telechoice.com) or your favorite TeleChoice contact to
share your thoughts on these matters.
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