Facing up to the dangers of complacency

PUBLISHED : Sunday, 07 November, 1993, 12:00am
UPDATED : Sunday, 07 November, 1993, 12:00am

A LOT of people think that a manager is never more a pure manager than when he is controlling a crisis. I can see why people believe that. There's something grand and dramatic about an executive calmly facing doom and heroically marshalling the troops to overcome disaster.

I'm not sure I buy that. I put a lot more value on a manager who can see a crisis coming months or years in advance - and knows how to marshal the troops so the crisis never gets a chance to happen. As the saying goes, an ounce of prevention is worth a pound of cure. We should exalt the people who prevent problems even more than we admire the people who cure them.

We should also exalt managers who can create a sense of crisis even when a crisis doesn't exist.

There's a dangerous tendency at any company to get complacent when things are going well. People take success for granted. Even worse, they adamantly oppose any sort of change. ''If it ain't broke, don't fix it,'' is their motto.

I also don't buy that. I've learned over the years that no matter how great things may be going now, everything changes three or four years out. You can bet on it. And you can't afford to stand still. In today's climate of fickle tastes and accelerated change, a more appropriate management motto might be: ''If it ain't broke, break it.'' Obvious as this may seem to some, I can see how a lot of people miss it. There's a certain comfort in looking at your business and projecting its future for five or 10 years in a smooth line of modest but steady growth. If you're selling $1 million of widgets now, it's not unreasonable to expect to double that in a few years. Unfortunately, this fallacy-laden thinking ignores the possibility that a competitor will build a better widget, lower the price of his widget or create a product that replaces widgets altogether, eliminating your business altogether.

I constantly have to remind our people that change is constant and prod them away from the fallacious thinking that leads to complacency. Here are three fallacies that often blind people to an impending crisis.

The leader board never changes.

When things are going well, people find it difficult to imagine a time when things won't be as good. They think that their success will never end, or that they can repeat it forever. It's precisely at those moments that I like to remind people that the leader board always changes.

We represent some of the top golfers in the world - Nick Faldo, Greg Norman, Nick Price, and Bernhard Langer. But I can't let the people in our golf division bask in that happy circumstance or delude themselves that it will continue forever. I'd rather create a sense of crisis. I point out that 10 years from now the players at the top of the world rankings will probably be people we have not yet heard of. We can't afford to think we own the leader board.

A job well done goes well rewarded.

Another fallacy centres on the notion that if you do a job well, your clients will be glad to pay you to continue doing that job forever. Not true. At some point they always begin to think they can do your job themselves.

If you continue to do your job well, it is quite possible that in seven or eight years time you will have helped your client build a substantial business. You might think the client would be grateful that you helped increase his profits, but it doesn't always work out this way.

There comes a moment when the client starts to focus less on the money he's making and more on the fee you are commissioning for your efforts. Ironically, this tends to happen when the revenues reach a critical mass that the client never imagined and youwould normally expect everyone to be at their happiest. At that point, the client thinks he can take your work in-house by hiring someone at a fraction of your fee. And why not? I've seen this happen often enough to know it's true. You build a mousetrap for people and eventually they think they can catch mice themselves. Internally, of course, our people don't always catch this irony. They think doing excellent work will be excellently rewarded. They're so pleased with the increased revenues they're bringing in, they forget that the client sometimes underestimates how hard we are working and is more likely to ask what we are doing for him than to say ''thank you''.

That's why I'm constantly reminding our people to talk to the client and to add elements to the relationship that he can't live without. Doing a good job is no protection. And doing a great job can actually create a crisis.

The myth of the ''comfortable lead''.

Perhaps the most dangerous fallacy is the one that says you can relax because you have lapped the field. Let's say your company has a 40 per cent market share in your industry and your nearest rival has 10 per cent. It's human nature for your people to feel satisfied with that competitive edge and to regard with disdain each new upstart who dares to challenge your lead.

But people forget that it only takes three or four of these little gnat-like competitors, each assaulting your business on different flanks, to distract you, to chip away at your market share, and to slow down or reverse your momentum. You ignore these upstarts at your peril.

I suppose any manager could drive the point home by pointing to IBM or Sears or the American steel industry, all of which were seriously undone by a host of gnat-like competitors that grew at their expense. But I prefer to tell the story of Hobart Manley, who was one of the leading amateur golf players in the US and a student of Byron Nelson.

Manley was playing in the US Amateur championships in Minnesota, paired against a local 15-year-old boy who had qualified for the tournament and was being followed around by his parents and neighbours. Manley got up by four holes early in the round against the boy, when suddenly the boy started crying in full view of his parents and supporters. Manley thought, ''I'm killing this kid in front of his family. Maybe I'm being a little hard on him.'' The moment he started to feel sorry for the boy, his sharp play vanished and he ended up losing the match.

The next time he saw his teacher, Byron Nelson, Manley told him what had happened. Nelson (who once won 11 PGA tournaments in a row) replied: ''That's exactly where you want them - crying! And when you get them there, you want to put your heel on top of them and grind them into the dust.'' That may sound harsh, but it's reality. There is no such thing as a comfortable lead. Managers who cannot maintain a sense of impending crisis within their organisation will probably be facing real crisis sooner than they think.