Is there a more loyal customer anywhere than Wile. E. Coyote? He has a very simple job he wants his purchases to do: to catch the varmint Roadrunner, so Mr W E Coyote can get something to eat for once in his miserable existence and avoid being splattered all over the canyon floor. But despite a level of innovation and determination that IDEO itself could only marvel at, he remains unfed and re-splattered.
It is clear where a lot of the blame for this lies: those snake oil salesmen at at the ACME Corporation. Poor Wile, no matter his investment in rocket powered roller skates, superman outfits, triple strength fortified leg muscle vitamins, female roadrunner costumes, artificial rocks, triple-strength battleship steel armor plate, do it yourself tornado kits and giant rubber bands he remains unsuccessful. I’d love to meet Wile E. Coyote’s account manager.
There are many customers in the world like this. They invest in One Weird Trick that Doctor’s Hate to solve their problems. They (we?) buy beanie hats from the Gap because the people on the advert are so sexy, ignoring the fact that they are sexy because they are models, not because they wear beanie hats. We buy perfume to partake of a lifestyle we’ll never know, cars that we use about 10% of the dynamic potential of (I am very guilty of this one), and books we’ll never read (also guilty). But it’s not just customers that keep going in the face of the evidence, businesses do as well. It’s not Wile E Coyote as customer I’m interested in, it is his behaviour as CEO.
Imagine this, the mission statement of Wile E Inc. “We will proactively add value through the capture and consumption of Roadrunners through the use of technological breakthroughs sourced from the ACME ecosystem to deliver sustainable outcomes to starving splattered Coyotes.” CEO, President and Founder, Wile E Coyote (MBA Harvard 1948). His determination, resilience and tenacity is something to be admired. But he keeps failing.
I was prompted to think of this by an article in a recent Harvard Business Review called ‘Stop Doubling Down On Your Failing Strategy.’ In it the authors point out the sheer number of companies that have a strategy that stops working and in response they just keep on doing it louder and louder until they end up splattered on the canyon floor. HMV might be a classic exemplar of this, but Wile E Coyote is its spirit animal. In the article, the authors give a number of very sensible suggestions as to why this happens and what to do about it, but I think we can learn a deeper lesson from Wile E Coyote.
Let’s look at the strategy of Wile E. Inc. Its actual mission, buzzword bingo above to one side, is sensible. He wants to catch Roadrunner and like pretty much every product of our society his first and only solution to this is to load up on technology. For all his innovations (and here are a few more because I can’t resist: dehydrated boulders, rocket powered pogo sticks, indestructo steel balls, earthquake pills, cactus costumes) he is no closer to achieving his goal. Why is this? He’s clearly smart, tough, determined and hungry, but no dice Wile E, it’s a splatterin’ for you. One of the key reasons is something Toynbee (yes, him again) pointed out a long time ago – when the elites of societies (or organisations, or coyotes) mature they lose the power of creativity and replace it with a blind repetition of what worked (or didn’t, in Wile E Coyote’s case) in the past.
There are many examples. Let’s pick our way among the boulders on the canyon floor and poke at the splattered remains. Oh look, here are the remains of Blockbuster, that couldn’t stop running a strategy based around retail units with greasy carpets when their whole business was moving online. Something is vibrating here, hey, it’s what’s left of BlackBerry, who couldn’t respond to the smartphone revolution. Damn, that smoking pile was Nokia. Here’s a pile of crushed junk that might once have been car shaped, oh it’s Hummer, and over there is British Leyland, and round that corner is a pile of nasty old GM brands. And here is a deeper part of the canyon, where the banks have been falling since 2008.
What is going on here? These companies, and many many like them, were run by smart people who could see the writing on the wall, and yet they seemed unable to radically change course. One explanation is behavioural, which is the road the HBR article I mention above goes down. It’s very good, but it sees the whole problem as a function of executive decision making, biases, fallacies and meeting process. These are all important points, but one of the themes of this blog is that this ‘great man’ view isn’t enough. There are events at work that even the most fallacy aware C-Suite might not be able to manage. As Wile E. Coyote could tell you, gravity really is a bitch.
These events fall into two large piles. The first is to do with the kind of people that rise to the top of a mature company, especially the skills that are rewarded and the ones that aren’t. The second is the muscle memory of big businesses. They’ve done the same thing for so long it is almost literally inconceivable that they might do something else, to cancel the ACME catalogue and go chase a squirrel instead. Let’s look at each in turn.
Empire building and empire management are two very different skills. The people that build successful businesses don’t often look like the class of professional managers to come to administrate them once the founders exit, or die, or retire, or are executed in a palace coup. Building a business is a job for people with a risk appetite that can look reckless. Running one is a job for the risk averse. Starting a business requires the ability to innovate, to try different things, to cut losses off quickly, the not give a damn about how it looks. Working up a corporate hierarchy requires caring a very great deal indeed about how it looks, to never be associated with a failure, to innovate only as far as success can be guaranteed. In other words, the people that found businesses are not the people that go work in the them and become C-Level executives. That isn’t to disparage the C-Suite, their skills are vital and ones that founders might not have, but it is not a skill set for a crisis of this kind.
There is one other fundamental difference. In the early days of an organisation (or society) all options are on the table. There is no historic preference for one way of operating or another, for one strategy or another, for one way of behaving or another. Because nothing has worked yet, no one automatically reaches for the lever they’ve pulled before. In mature companies this isn’t the case. Some of the levers are shiny with use, some are rusted into position, some aren’t connected to a damn thing. A company that has always been a bricks and mortar retailer can’t easily become anything else; to do so effectively means creating a new company, and, as we’ve seen, people who do that don’t end up round the boardroom tables of business that suddenly need to reinvent themselves.
This opens up a deeper point. HMV was built to be a physical retailer, so was Blockbuster, or Borders. British Leyland had got away with being shit for so long they’d forgotten how to be good. A businesses isn’t a do anything machine that can be re-purposed to a new strategy, it has grown and evolved and been shaped over many years to do what it does, and it doesn’t know how to do anything else. Wile E. Coyote only knew how to buy things from ACME and try them, he had no ability to do anything else. Let’s take an example from a collapsed society.
The Mayan society was based around rulers with religious responsibilities. They intervened with the gods to bring the rains the society depended on. They did that by building pyramids and religious complexes, that was what they did , it was all they could do, the whole way they saw the world hinged upon it. So when the rains failed and kept failing they built bigger pyramids, right until they couldn’t afford it anymore then the whole thing stopped working. The people returned to subsistence agriculture, and there they are still. I’m sure some rulers realised that it wasn’t working, that the end was coming, but the entire momentum and purpose of their society stopped them from changing.
So what do the elites do? They do what they’ve always done but louder. They know they need to do something, but they quite simply don’t know how. They are not trained, selected, rewarded, incentivised, or promoted on that basis. So HMV keeps opening CD retail stores, British Leyland keeps making mediocre cars and hoping the Japanese and Germans just go away by magic, Blackberry keeps making devices for corporate tech security people with a physical keyboard. Changing this is almost impossible; everything in the way a company operates is against it. Even if the top execs can change, the layers and layers below them are made in their image, and they can’t. The decision making process, and finance allocation processes, and customer habits, and consumer insight, and marketing strategy, and the reward system, and investor expectations, everything, is set against such a radical change. Once again, when companies die, it’s not murder, but suicide. (Toynbee calls this process a failure of mimesis, the instinct to copy, and it is an idea we’ll go deeper into soon.)
This is a partly a problem of unexamined assumptions. The strategic choices here aren’t superficial, they are profound, they strike at everything a society or organisation sees as important. For Wile E. Coyote, he kept doubling down on a technological solution (as do many companies) when the problem isn’t in the tech, it’s with the Roadrunner. Blackberry made better version of its failing products, it wasn’t able to make a new thing that people wanted without chucking everything it believed in about the world away.
It is important to recognise though that the failure of their elites to change course isn’t the only reason these companies die. As I’ve touched on already, this is only one of the dreadful trinity that causes both societies and companies to plunge down the canyon of history. The elite fails to be creative; things worsen, benefits are reduced, the people feel deprived of a birthright and reject the way the elite see the world, and outside, beyond the campfire’s glow, disruptors wait who can run the province for less cost to the people, or offer a product that does almost as good a job at a cheaper price. Against all three of these there is little hope.
They are, of course, connected. The elite are no longer able to inspire loyalty through their creativity and obvious brilliance, so they demand it through HR process, cultural norm and occasionally actual force (“you’re not a team player, so we’ve decided to let you go.”) The employees then don’t innovate as they could, so the ideas that could save the company, or more importantly the willingness to try, isn’t there. Meanwhile, disruptors are gonna disrupt and the idea free elite and demoralised people are unable to respond. The canyon floor approaches.
Societies do this as well. Look at our current masters, their policies of deregulation, tax reduction, privatisation, and a general war of all against all to get a job, has immiserated huge chunks of the population, who are kicking back to the utter bafflement of the elites. Roman emperors kept fighting each other – or bribing the barbarians who increasingly made up the actual Roman army – to do it on their behalf, even when said barbarians started carving chunks off the Empire. Mayan rulers kept building pyramids when the rains still didn’t come. Coyotes kept buying ACME gadgets despite a 100% failure record.
There is an episode of Father Ted where Dougal is trapped on a milkfloat that is wired to explode, and all the priests can think of to do to help is to hold Mass after Mass. It is an approach that has the merit of faith, but as a practical tool is a little lacking in results. But we see the same lack of ability to change course in boardroom after boardroom. Wile E Coyote would have understood.
Through The Rose Window 