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How to Stop Corporate A.D.D.

Posted on Saturday, Feb 16th 2008

By Michael Kanazawa, Guest Author

Companies of all sizes and stages are suffering from corporate attention deficit disorder. It shows up as constantly shifting strategies, launching lots of new initiatives without finishing any, changing plans before results can even be measured, and people running around busy doing a lot of tactical things that just aren’t adding up to breakthrough results. It’s activity, not achievement.

Corporate A.D.D. is tough to manage because it is born out of good intentions. Leaders want to run organizations that fail fast and move on, stay nimble to changes in the marketplace, and create high energy places to work where people are engaged in coming up with new ideas. Those are all the right things to do, but they need to be balanced with an understanding that launching numerous initiatives that aren’t completed does not produce results versus three high impact initiatives with close to 100% execution.

One story from our book BIG Ideas to BIG Results, shows this well. A very early pioneer in power amplifier chips for cell phones and other wireless devices was facing a tough problem. After really creating the market, they were being pursued by new competitors with next-generation technologies. Their market share was sliding and the business was going to need to improve, fast.

A consultant was brought in to help stimulate innovative thinking and to help put the company back on a growth path. The executive team gathered for an offsite and worked through generating long lists on flip charts of all the things that needed to be improved. Then, they categorized all of the ideas into functional areas such as sales, marketing, engineering, manufacturing, and finance. The lists for each group were clearly too long and so the consultant had each functional executive pick at least 5 items to do on their list. Seems reasonable, right? They were just about to slip into total overload.

Most companies don’t suffer poor performance for a lack of ideas. It is more typical that there are too many unfocused ideas and people are so busy fighting fires that nothing big really ever gets done. And these executives at the chip company were already overloaded going into the meeting trying to keep up with the normal business. Adding five more things was just burying them more. And it wasn’t as if nobody knew that those items needed to get done before anyway.

Before they left the meeting, the consultant announced an accountability program. The idea was that a jar of marbles would be placed on the CEO’s desk and each time somebody finished an initiative, they would be able to take out one marble. The idea was to try to empty the jar.

In the end, the jar was emptied … into the trash. Nothing came of the initiatives. Why not?

Most of the big initiatives, by their nature, required cross functional support to be accomplished. But since each group had a different list of five things they were all focused on different tasks, with no time to help each other. And, nothing had been taken off the table to make room in their already overloaded days. Corporate A.D.D. had gripped the company.

A new CEO arrived shortly after the marble exercise and focused the company on just a limited few initiatives that were each big ideas. They were to catch up on the technology cycle they had missed, more tightly align end products and service with customer expectations in new segments, and accelerate a move to a new fab facility. Everyone in the company from top to bottom aligned to these top initiatives and things started to move. The company regained a leadership role in the market and despite the tremendous consolidation, commoditization of prices, and shifting economic cycles, the CEO still reflects that if the company did not get it’s “laser focus” in alignment back at that time, it would not be around today.

Here are a few things you can do to avoid corporate A.D.D. in your company:

– Have clear and simple company strategy and goals that everyone in the company can understand.

– Focus on no more than three major initiatives at a time across the company and stick with them long enough to see if they will succeed or not.

– Align all resources, people, and attention around those top initiatives. And, stop doing things that aren’t aligned.

– Engage people in bringing their creative ideas forward, but do that in the context of the corporate initiatives and goals.

– Put in a process to follow through on the key initiatives. Set milestones for the initiatives so that you can monitor over time if it is working as planned, needs to be adjusted or needs to be stopped.

Running a company that is constantly coming up with new ideas, has a lot of activity going on in every corner, and is constantly on the move can feel productive. However, the key advice to remember is that there is a huge difference between activity and achievement. Corporate A.D.D. leads to frantic activity and what you really want is high energy execution and achievement … and those two are vastly different.

[SM: Readers may have heard me use the word Brownian Motion in this context …]

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Michael,

I agree with your points and would add the following:

  • Turnover and reorganizations make it almost impossible to rely upon organizational processes to follow through on key initiatives given ever changing tactics and strategies.

  • If the organization does not alter its reward structure, nothing will change. The situation with Corporate ADD is natural given that most companies effectively reward Corporate ADD.

  • Meaningful results often take time. It is difficult to hold people accountable if the return period is substantively greater than the duration in a particular position. That is, if people move positions before the consequences of their work are realized, the organization will not know if they are moving the right people until after the fact.

BTW, alignment is an overused term and alignment programs seldom yield results. What companies need is leaders who act in concert with the best interest of the enterprise.

The late Peter Drucker frequently opined that 90%+ of organizational problems are management problems. And Carl Icahn recently said that, “The two big problems facing American corporations are management decision making and organizational accountability.”

John Dohm Saturday, February 16, 2008 at 11:30 AM PT

Fantastic article…

There needs to be a balance between focus on 2-3 initiatives and fostering innovations. Again it depends on the company itself.

A company like 3M will have thousands of ideas brewing in their labs. Thats their DNA..their innovation. It does not make sense for the management to just focus on 2-3 initiatives at a time

But any company losing direction in a big way do need to take a step back and focus on few key issues which will make a difference. Yahoo is a good example. As SM has been harping on in her columns, Yahoo may need to focus on couple of big initiatives and rally the company around that

Balaji Sunday, February 17, 2008 at 6:03 PM PT

John,
Thanks for the additional thoughts. Definitely reward systems and accountability need to be in synch to make follow through and tighter execution work.

Mike Kanazawa Monday, February 18, 2008 at 9:42 AM PT

Balaji,

Great point. You are correct that one pocket of open exploration can be in R&D labs. Although even some of the most well funded companies like IBM and AT&T had to move from completely fundamental and exploratory R&D into more focused applied research aimed at specific outcomes…although still fairly broad in scope.

Mike

Mike Kanazawa Monday, February 18, 2008 at 9:46 AM PT

[…] strengths that Intel had as a unique competitor. They were de-focusing, too dispersed, leading to corporate A.D.D. types of behaviors in launching those initiatives. While they were distracted, AMD came in and […]

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