Open Mic - SAS Publishing Blog

Contributed by Jonathan Hornby, Director of Worldwide Marketing for Performance Management at SAS

Radical Action for Radical Times came to life after the Lehman Bros collapse of 2008. I had just got back from vacation and couldn’t believe the depth and speed of ramifications rippling out.

A few years earlier I had collaborated with Joel Barker – the guy that popularized “paradigm shifts." He taught me how to think through cascading consequences and the implications for strategy. A very simple approach based on the wisdom of crowds. Once you latch on to this way of thinking, you quickly begin to see how events could unearth opportunities and threats – fast. To learn more, read chapter 2 of Radical Action for Radical Times here.

Back to the collapse. Given the frequency of layoffs, firms announcing “unprecedented economic uncertainty” and bankruptcy, I realized many would panic. I feared we could enter an economic spiral of doom – more layoffs and disposals beget more fear, creating more pressure for business, which in turn leads to more layoffs. You get the picture. One year on, we are not out of the woods yet – there are shoots of recovery but it could all go downhill fast.

I personally believe many of the reactions are unnecessary. We are beginning to witness firms cut muscle and bone – not fat. Back in 2007, SAS commissioned Business Week to conduct a survey on the subject of performance management. There were 2 startling statistics:

1. Less than 50% of executives understood what drove cost, profit or value
2. Only 20% of CEOs and CFO believed they had the agility to adapt

Put another way, 50% of the time a company could be destroying profit, and even when pointed out only 20% will be able to change successfully.

This rang true with my own experience. In the field of activity based management if you stack up your customers in terms of how they contribute to profit, you will typically observe the following:

• 20% of your customers deliver 500% of your final declared profit
• 60% merely break even
• The final 20% destroy 400% to bring you back to 100%

If organizations could simply stop doing unprofitable business, perhaps they didn’t need to layoff all those staff. Perhaps they didn’t need to divest assets.

A fundamental problem here is that most organizations confuse revenue with profit - the higher the revenue, the better the customer right? Wrong. They are also pressured by financial markets to deliver in the present, not future. But if you don’t manage for the future, you might not have a future! Perhaps the biggest culprit is this – we all assume someone far cleverer than ourselves has accounted for all these deficiencies in our own organization – think again!

I could go on, but I won’t. There are many issues with how we “manage." Radical Action for Radical Times exposes many of them and provides alternatives that allow you to prosper in good or bad economic times. They may be radical for some, common sense for others, but I can guarantee at least one idea will capture your imagination and change your perception – I just don’t know which.

What was to be done?

I had a sense of what was needed. I didn’t have all the answers, but more importantly, who would listen? I’m not a professor at a respected university. I hadn’t written a single book. I work for a software company that helps organizations make better decisions. Who would listen … particularly amidst all the noise about how bad the banking system was?

To get the ink flowing, I decided to leverage the knowledge and fame of others. I reached out to International Speakers Bureau – a group with direct access to thought leaders, book authors and management gurus. Together we recruited 10 thought leaders to join me on a series of webcasts. Everyone gave their time freely – we were on a mission to help others. It took a little over a month to recruit the speakers then we went live on January 7, 2009. In all we captured four hours of discussion over five weeks. Over 1,000 people watched the series within the first month.

But that was just the beginning. After each webcast, I spent hours with my new found friends. I wanted to get into their minds and cover topics and ideas we simply couldn’t fit into the show. Those ideas became the book Radical Action for Radical Times. I had a ton of fun and couldn’t learn enough – my mind was a sponge.

The book took just four months to write; editing then publishing a further five. Having read others comments on how long such an exercise typically takes, I’ve come to the conclusion that I must have written the book in a bubble – totally oblivious to the normal cycles. Having your own in house publishing team certainly helps!

As soon as I wrote the last chapter, we took the ideas on the road. I was too impatient to wait for it to be published – I wanted to help socialize the ideas and get instant feedback. We visited six cities in America and hosted interactive dinners for executives. I spent 40 minutes recapping key points from each chapter then opened it up to our guests – what issues were they dealing with? … how had their firms responded? … which ideas from the book captured their imagination?

As I suspected, different ideas appealed to different people. By diversifying the topics, we increased the probability of helping others. It was working! To continue the conversation, I have even started my own blog “Beyond Business."

The best part though is that all royalties are being donated to children’s cancer research. It will make a difference in more way than one.