Sustaining Success and Coping with Fundamental Change

The acceleration of change and its impact on business and society is a theme that we touch on constantly here in this blog.  This post covers four recent events that individually and together reflect how various organizations are coping (or not) with the changing world, and how they apply innovation and creativity to sustain themselves in these very demanding times.Sustaining the Catholic ChurchIn his December 21 address to the Vatican Curia, the bureaucracy that runs the Catholic Church, Pope Francis expressed his appreciation for their work, their diligence, and their creativity. It is a bit unexpected for the Pope to speak of creativity, but it is certainly fitting with what we know of the world.  While it’s not a surprise to us that creativity is essential to the sustenance and indeed the survival of institutions large and small, it is notable to hear this from the Pope himself.Sustaining the PCIn a September meeting with stock market analysts, Microsoft CEO Steve Ballmer (who had already announced his forthcoming retirement in 2014) noted that one of the company’s goals is to ensure that the PC remains “the device of choice” for consumers.It’s not surprising that Mr. Ballmer would say that, given that about 25% of Microsoft’s revenue comes from the Windows operating system.  It would be pretty bad PR, and perhaps even Wall Street suicide for Ballmer to admit that both the PC and Windows are dying, and since Ballmer himself owns 4% of the company’s stock, it would be a very expensive admission for him to make.Nevertheless, PC shipments in 2013 were down about 10% compared with 2012, and with the growth of smartphone and tablet sales, it’s hard to see how the decline in PC sales could possibly turn around.  Microsoft made a tacit admission of this with the release of its Surface tablet device, but unfortunately the company was forced to write down $900 million of Surface inventory due to sales being drastically lower than expected.You can find more info about this on the official website http://www.nomoreh1b.com/greg-jacobs-incredible-dream-machines-review-and-bonusAll of this raises the interesting questions, Who made the sales forecast in the first place, and based on what data?  Forecasting the sales of a new product is indeed one of the most difficult tasks for an innovation manager to do, but missing by $900 million suggests that the innovation methodologies that Microsoft is using could stand a pretty thorough updating.You can check out my latest article, with my special guest if you want to learn more.Innovation management must also concern itself with whatever lies beyond the PC, which is apparently not going to be the Surface device.  So where will Microsoft’s future revenues come from?  And where will it’s growth come from?  Whoever replaces Mr. Ballmer as CEO will have those questions front and center in their attention, and indeed the CEO search, now ongoing, is certainly focused on finding someone who can lead this effort with both credibility and confidence.  But there seem to be very few executives who are really qualified for .Sustaining Success in ChinaSpeaking of problems in the tech industry, the links between the private sector and government are being ever more entangled in technology, as the following story reveals.  The $2 billion Louisiana Sheriffs’ Pension and Relief Fund filed suit in Manhattan federal court last week claiming that IBM defrauded investors by concealing a decline in its sales following the release by Edward Snowden of NSA surveillance information.It seems that Snowden’s leaks revealed that IBM was providing surveillance information on its customers in China to the NSA, and as soon as this information was revealed publicly IBM’s sales in China dropped precipitously.  In Q3 2013, IBM total business in China declined by 22%, and its hardware business was off 44%.  IBM’s stock value declined by $12 billion when these sale figures were announced, and the lawsuit claims that IBM knew this would happen, but failed to disclose it.Business leaders throughout the tech sector are expending a great deal of thought concerning their role in NSA spying, both on other nations and also on Americans, and there are no clear cut answers as to where their correct role and responsibility lies, and in figuring out how their choices will impact on their business prospects throughout the world.Sustaining Competitive AdvantageIn contrast to the party line reflected in Ballmer’s comment, Ford CFO Bob Shanks commented this month on the intense competition in the auto industry by saying that “You really can’t sustain any competitive advantage, ever.”That is a refreshingly honest assessment of the auto industry, and indeed of just about every industry.  One of the few valid (and obvious) responses to these problems of increasing competition is an ongoing effort in innovation.  And Ford has recently announced two new electric cars that get the equivalent of more than 100 miles per gallon.  (A billboard ad for those cars is the photo at the top of this post.)Interestingly, one of the few executives who may be qualified to lead Microsoft is Ford's current CEO Allan Mulally.  Having brought Ford back from the brink of disaster since he took over in 2006, is he interested in a new challenge?  In a few months we'll know if he gets the job, but it may take a few years before we know if he, or whoever actually is the next CEO of Microsoft, is up to the challenge of recreating a giant company in the face of accelerating change in one of the most difficult industries around, hi tech.You can even get a free Promo Code by Sky BetAs these comments make very clear, innovation remain an issue for Microsoft, IBM, and Ford, and even the Catholic Church.  And it should be an area of focus for your company, as well.