In our last episode, I mentioned how Knute Rockne compiled four sophomore football players in the Notre Dame backfield who became football lore. The Four Horsemen of Notre Dame destroyed almost any defense they faced from 1922 to 1924, only losing twice to Nebraska.
In a strange way, their image came to me when reading Richard P Rumelt’s Good Strategy/Bad Strategy and his four major aspects of bad strategy. Rumelt writes that you can detect bad strategy out of four hallmarks: “fluff, failure to face the challenge, mistaking goals for strategy, and bad strategic objectives.”
In this issue, we will discuss the second horseman, “failure to face challenge.” As Rumelt pointed out, “bad strategies fail to recognize or define the challenge,” thus preventing any chance of developing a strategy to improve it.
As as CPA, some of my clients have refused to identify a major challenge in their business. This “ostrich head in the sand” habit always frustrated me. These small and medium-sized business owners used many excuses to continue working in their comfort zone. They ignored the “lit fuse.” The fuse ultimately led to crises. Les McKeown in Predictable Success, labelled this as “The Big Rut” where “the organization has lost any desire to be creative or take risks, and is instead solely focused on maintaining and marginally improving how it has done business in the past.”
The problem that seems to recur is the failure to focus on the clients’ needs. Many strategy books discuss this point of view, but many organizations fail to see it. In other words, they have to turn the telescope around and stop looking at themselves. They must stop focussing on what THEY think the client need, and instead swing the telescope to point away from them.
Now, that is not to say to ignore “the elephant in the room.” That giant inefficient product, or process, that is running the company into the ground. But, by focusing on your customer in a strategic process, you may also see that the big expensive, inefficent elephant in your storage room will have to go.
This is why strategic planning is important to businesses of every size. The process offers a view that many businesses fail to even consider. A strategic plan doesn’t have to be a hundred page detail analysis with footnotes that takes a month and costs tens of thousands of dollars. Instead, a simple plan can only take a couple of hours, or if more brainstorming is needed, a couple of hours each day for a few days. The process could lead to a new business and the pasturing of the fourth horseman.
Our next issue will discuss horseman #3, mistaking goals for strategy.
Twenty-five years ago worked in a CPA firm with a woman whose father directed orchestras for major films. She informed me about an orchestra director secrets like the isometrics he would perform to build up his arms, the focus of his eyes, and the rhythm of his body language. The artistic part obviously was the message he was projecting the orchestra to play. The “business” though, was the set of tools and discipline that he had mastered in order to project his musical vision. Both were equally important.
Back in the 1980’s I lived in the San Fernando Valley near the main post office. At about 9 pm on April 15th, I would walk my dog to the post office to watch the late tax filers. A line of cars always stretched around the corner and up the 405 Sherman Way freeway offramp up into the slow lane. But the best part were the anti-tax people protesting the existence of the income tax. They would be picketing in front of the post office telling drivers not to throw their returns into the large canvass bins manned by postal employees. What a circus, I loved it.
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My late brother-in-law, Philip Epstein was the son and nephew of famous screenwriters called “the Epstein Brothers.” These brothers, Julius and Phillip, wrote Casablanca(garnering an Oscar) and many other great movies. Phillip told me sometime later, Jack Warner tried to harness the Epstein Brother’s creative ability by forcing them to work 9-6 every day. The brothers did. The next movie released turned out to be a theatrical bomb. Jack Warner asked them why did that happen? They replied, “We don’t know why? We were here from 9-6 every day!”
Remember in the TV series Roots when Omoro, Kunta’s father, held his infant son,Kunta Kinte, up to starry sky and said, “Behold the only thing greater than yourself!”
Year’s ago I went to great lengths to report and document the tax donation of a client’s Picasso. The tax return was completed and signed by the qualified appraiser, who supplied by the client. Little did I know that this appraiser was the same person who sold the art to the client. When challenged by the IRS, the IRS appraiser carried more weight due to his “independence” over our appraiser.
Tomorrow, as a Los Angeles CPA business manager, I will be merging two of my skills with a client. My entertainment business management skills, and my strategic planning skills. This client is a singer/songwriter who produced a music demo and video. My question to her was, “So what?” If you pursue the path of other musicians to acquire a contract, a 360 deal, you are no better than them, and may be just one of many homogeneous artists trying to make it.
As Los Angeles Certified Public Accountants, we have the opportunity to work in different industries. Each industry has its own special personality, yet there are some tax breaks that many are not taking: