Innovative Express

"Improving effectiveness by making the complex simple and making the simple work!"

September 2006

In this issue:

Looking (back) in the Mirror
What’s More Important — Strategy or Execution? A Dell vs. HP Case Study
Personally Speaking...

The Innovative Express is not exactly breaking circulation records, but I am pleased to report a whopping 20+% increase in the number of subscribers---just in the last month or so. That’s not all. It is a testament to the global marketplace we operate in that the new subscribers have joined not only from the U.S., but also from Europe, Africa, Asia, and even as far away (at least for me) as Australia and New Zealand! I want to welcome all of you to the Innovative Express community. I know your time is valuable and we are all overwhelmed with reading material. I will strive to keep Innovative Express practical, reader-friendly, and thought-provoking.

The current issue focuses on what is more important: strategy or execution. Future issues will include:

How to get inside your clients' heads? (October)
Increasing employee engagement and commitment---not just compliance (November)
How to write a winning self-appraisal and resume' (CV) (December)
The art and science of consultative selling (January)
Training, what training? (February)
Doing right by doing wrong! (March)

Inspired to agree, disagree, or otherwise comment? We hope that you will let us know your thoughts.

Wishing you a productive and successful month ahead---both personally and professionally.

Abhay Padgaonkar
President, Innovative Solutions Consulting, LLC

Looking (back) in the Mirror

Leadership Excellence is a subscription-only print and online newsletter. Ken Blanchard has called it “the best advisory newsletter in the world.” Not to be outdone, Tom Peters said, “Leadership Excellence is the finest newsletter I have seen in the field.” And Stephen Covey opined that “Leadership Excellence is the Harvard Business Review in USA Today format.” Need I say more?

Well, last month’s Innovative Express article (Looking in the Mirror) has put me in some lofty company. It was published in the August, 2006 issue of Leadership Excellence along with articles from Warren Bennis ("On Becoming A Leader"), Eliyahu Goldratt ("The Goal"), Clayton Christensen ("The Innovator’s Dilemma"), and Dave Ulrich ("The HR Value Proposition"). As they always say, “It is an honor and a privilege.”

See the entire "Leadership Excellence" Issue...

What’s More Important---Strategy or Execution? A Dell vs. HP Case Study

Dell vs. HP Quick! What’s more important: strategy or execution? The thinkers among us will say, of course, “Strategy is more important. If you don’t know where you are going, any road will take you there.” The doers among us will say, “It is the execution that is more important. A great strategy that is not executed is only as good as a race that wasn’t run.” Without getting into a “chicken-or-the-egg” debate, let’s look at the Dell vs. HP situation to see if we can find the answer.

I am sure you will recall that Dell handily won Round #1. Their Dell Direct concept along with a fanatical focus on the lowest cost allowed them to drive IBM out of the PC business (since sold to Lenovo Group) and to take major market share away from HP. The CEO of HP at the time, Carly Fiorina, was forced into what critics called a risky merger with Compaq. She was roundly criticized and soon forced out.

According to Alan Murray writing in the Wall Street Journal, “The truth is that H-P's board members never completely lost faith in the merger -- after all, many of them had been a party to it. They just lost faith in Carly. She created a matrix-management structure they couldn't understand and muddled lines of reporting that made it difficult to hold anyone responsible. She concentrated too much power in her own office, and then took to the road making speeches and wasn't there when decisions needed to be made. Perhaps most importantly, she was disdainful of the board's efforts to change her ways.”

What has happened since can be described better with a single picture above than a thousand words. This is the chart of HP’s stock price compared to Dell’s over the last year. For those who may be visually impaired when it comes to pictures/graphics in their email, let’s just say that HP has won Round #2! Dell’s stock has underperformed HP’s by 68% in the last year.

Oh, I forgot to mention: Mark Hurd, the man chosen to succeed Ms. Fiorina, didn't undo the merger as many had expected he might. He is, however, everything Carly wasn’t. He is a hands-on guy who is all about execution, and apparently not very big on vision. He also happens to be an upfront kind of guy. He openly admitted that the seeds of HP’s performance in the PC business were sown long before him.

So, who should get the credit? You guessed it: Both! As Alan Murray says, “In the end, they got the best of both worlds -- a charismatic CEO who brought about a hotly contested but transformational merger, and a no-nonsense, operations-oriented CEO determined to make the combined company work.”

And what happened to Dell? Well, their strategy became increasingly askew over the years---not because of anything they did, but because of what they didn’t do. According to Christopher Lawton of the WSJ, Dell didn't recognize the change in the buying behavior. In the last few years, much of the PC growth has come from consumers rather than the business---an area of Dell’s focus. Consumers looking for a new computer are buying laptops. And for laptops, consumers prefer to hold and test them in a store, but Dell is nowhere to be found in retail stores. Also, Dell took its fanatical focus on lowest cost a little too far. Dell staffed its call centers in the U.S. with temporary workers rather than more expensive full-time staff. The turnover soared to 300% and the sales flattened. (Talk about being penny wise and pound foolish!)

At the same time, HP cut costs to become competitive, began working more closely with retailers, and intensified its marketing efforts.

The Bottom Line: Strategy without execution or vice versa is like yin without yang. You can’t have one without the other. As Andy Grove of Intel said, “Strategy is important. Figuring out what to do is important. Doing them and doing them well is equally important.” I asked and answered similar questions in a recent article: Why is a cerebral exercise like strategy formulation only as good as a half-baked pie? How does one translate strategy into meaningful action? This popular article titled "Inventing the Future" was featured on sideroad.com and weLead Online Magazine. Want to find out more?

Here's "Inventing The Future" as it appeared in the weLEAD online magazine

Personally Speaking...

Very few of us can go without antivirus protection these days. So earlier in the year I renewed my subscription to Symantec’s Norton AntiVirus program. Thinking that I may need it on other computers I hadn’t bought yet, I even paid extra for the privilege of an “extended download.”

Well, I did buy a new computer soon thereafter and confidently went to activate the program on it. To my surprise, I got a message saying that I had reached a limit. Heaven forbid, you have to call to get service these days, but after exhausting all the online options, I had no other choice. As you might have guessed, after an inordinate amount of hold time, the call was answered in India. Now, I have nothing against people from India---I happen to be one myself and proud of it. But the supervisor I escalated the call to was rude and refused to answer my basic questions (“Where in the End User License Agreement is the limit specified?” or “What’s the point of me paying for extended download if I cannot have extended download?”). He simply kept repeating that I had to get a new subscription. He also insisted that his name was Steve Smith. Whatever! (Anyone sense an article on outsourcing/offshoring coming?)

I gave up, but not completely. I did what any loyal American Express cardmember worth his salt would do. I disputed the charge online with a detailed explanation. After its customary investigation, Amex sided with me completely and refunded the entire purchase amount. The best part? The program is working fine on my original computer, thank you very much!

Disclaimer: "This written advice is absolutely intended to be used, and if used under expert supervision is known to improve organizational and individual effectiveness substantially."