Post by Patricia Hewitt, contributing Women On Business writer
While no one wants to ever admit they’ve made bad business decisions, we’re all guilty. The fact is that if your organization is committed to a lasting growth strategy, you’re going to take risks, and there are lessons to be learned when we don’t get it right. Often, we think nothing of holding post-project reviews and “lessons learned” sessions when we make an operational faux pas, but how often do we the same thing for strategic mistakes?
Not too often in my experience in large part because the political landscape of the organization comes into play, which sometimes supports healthy strategic reviews and sometimes doesn’t. However, no one can argue that strategic mistakes have the great benefit of pointing out flaws in our business logic in ways that nothing else can do. A good, public drumming is just what it takes sometimes for us to face the music. Take the recent decision by the LPGA to suspend players who fail to become English-proficient.
Putting aside the suggestion that it smacked of sour grapes over the dominant position of Asian players in top U.S. tournament finishes and that those players were singled out and corralled into a hotel ballroom to be given the good news (let’s save that for another post), the underlying reason for this ham-fisted assault was the impact non-English speaking players were having on the organization’s business model.
The LPGA business model is not based on ticket sales, but on sponsorships and most importantly, on the pro-am events that take place before the start of a tournament, along with other communication opportunities, like interviews and hospitality venues. The argument in support of the new rule was that the pro-am experience most coveted by sponsors was being degraded by the fact that their playing partners couldn’t chat them up on the course.
Looked at another way, the LPGA business model is not based on the proficiency of the athlete, but on their ability to charm someone (who represents base revenue streams) by spending four hours playing golf with them. This would be similar to a situation you might find yourself in if your business model was based not on how well you provided goods and services to your market, but on how well you schmoozed your customers.
This situation (which has been reversed after a great deal of negative backlash) brings to light the fact that if your business model is not working, the first place to look may not be the people who are asked to support it, but the model itself.
The lesson to be learned from this situation is that a part of your strategic planning process should include an objective look at your underlying business model on some kind of regular basis. Too often, company’s either wait until they’re having problems to seriously review their core assumptions or focus their strategic planning process on figuring out what their competitors are doing. By that time, employee’s are way ahead of the game, and their focus on the impact to them of any business model problems may serve to shift your focus to solving tactical issues (like asking everyone to learn English) over strategic issues (like why do our revenue streams depend on a variable like players’ face time).
I’m not suggesting that the LPGA is not considering all of this since I have no insight into what their management is thinking, and I don’t mean to pick on them but rather to point out that their misstep is one that happens in many companies. In the business environment we work in today, which rewards speed to such a high degree, it is up to us as leaders to slow down the process and take the time needed to examine our company at a deep level on a regular basis. A temporary slow down makes a lot more sense than trying to drive at a 100 miles an hour with all that mud on your face.