Strategic Planning Analogy #489: Feeling the Weather

THE STORY

Weathermen on TV don’t seem to think it is enough to merely give us the outdoor temperature.  They don’t seem to think that ordinary temperatures accurately reflect how we FEEL. So on particularly hot days, they weathercasters talk about the “Heat Index.” The heat index temperature is usually higher than the actual temperature, because it takes into account things like the humidity, which can make it FEEL even hotter.

In a similar fashion, when it gets especially cold, the weathercasters use something call the “Wind Chill Factor” to restate the temperature as colder than the actual temperature. This is because high winds can make cold temperatures FEEL even colder.

Well, my experience is that when it gets especially hot or cold, most people seek shelter indoors where it is more comfortable. People naturally flock to the warmth of indoor heat when it is cold outside or indoor air conditioning when it is hot outside.

So, if the weathercasters are REALLY interested in giving us the temperature we FEEL on these extreme days, they should give us the room temperature…because that is where most people will be found and that will be the temperature most people will be feeling.

THE ANALOGY

Weathermen are correct in noticing that the temperature reported on a thermometer does not always reflect how people feel. But I think they miss the even bigger difference in temperatures between being inside versus outside. That’s where the real difference in feelings occurs.

A similar situation takes place in the business world. Businesses have all kinds of reports and dashboards to report all kind of numbers. These reports and dashboards are like thermometers. They report the “temperature” of what is happening outside in the marketplace where business is taking place.

The problem is too many executives spend too much time indoors, inside the comfort and security of the headquarters building. These executives do not FEEL the realities of what is going on out there “in the real world.” They are protected from the intense competitive climate on the outside.  Things feel a lot better inside the headquarters where bad news is often softened and “Yes Men” make the executives feel like everything is grand.

Yes, the reports and dashboards may reflect real temperatures. But unless one can penetrate the false feelings of headquarters comfort and get the executives to really FEEL how things are going on in the real world, they will not make the right strategic decisions.

THE PRINCIPLE

The principle here is that merely seeing the numbers of business is usually not enough.  You have to get executives to actually “feel” the numbers.

Feelings are Important

Why? First of all, business is very complex. There are so many moving parts that any single number doesn’t tell the full story. And if you have a whole stack of numbers, you are often no further ahead because it can be hard to see how all the individual numbers fit together.  It’s like having all the individual pieces of a jigsaw puzzle, but no idea of what the picture looks like when all the pieces go together. At that point, the puzzle pieces may as well all be colored black for all the insight they provide.

Our modern technology can pump out thousands upon thousands of data points every hour. But that doesn’t mean we are necessarily any smarter about what’s going on. Drowning in “big data” doesn’t make us more intelligent. True knowledge requires more than just piles of numbers. It requires context and insight.

Context and insight help us to see the big picture—to actually feel what is going on, to know what is truly important, and to see into the future—beyond the reach of measurement tools.  Unless you can feel the big picture, you cannot create the big picture strategy or make the right strategy decisions.

The second reason while feelings are important is because people are emotional beings. They make decisions based on both reason and emotion.  Our customers are emotional beings, our employees are emotional beings, our partners are emotional beings, and our competitors are emotional beings. All of their emotional feelings impact what happens outside in the marketplace.  If our leaders do not have a proper feeling for how all those emotions are playing out in the marketplace, they will make the wrong decision.

Our leaders are also emotional beings.  Their feelings affect their decisions.  If their feelings are wrongly biased by spending too much time insulated inside headquarters, their feelings will steer them in the wrong direction.

What Should We Do to Move From Numbers to Feelings

So how do we make sure that our leaders are feeling the big picture in the proper context?  I have five suggestions.

1. Elevate the Art of Interpetation.  The gathering of “big data” numbers is only relevant when those numbers can be interpreted and put into context.  We need to be able to put a heat index or wind chill factor on the numbers to get them to reflect how things really feel. 

Just having a warehouse full of paint will not get you a great painting.  You need to add the artist who can create the picture out of the paint.  Similarly, just having a data warehouse full of numbers will not let you see the big picture of what is going on in the marketplace.  You need to add the analytical “artist” who can convert the data into the beautiful picture of what is going on.

Therefore, we need to elevate the importance of interpretation of data to the same level (if not more) than that of the gathering of the data.  Ask yourself…how much time and money has gone into building you data-gathering activities?  And then compare that to how much time and money is going into the interpretation and conversion of that data into a picture that allows executives to feel the big picture of what is going on.  Is it in balance?  Are you warehousing paint or are you creating paintings?

2. Get the Executives to Go Outside.  If the weathercasters really want us to know what it feels like outside, they should just tell us to go outside and feel it.  There is often no substitute for actual first-hand experience in the elements. If you really want to know how things feel, go feel it yourself.

Have top executives go on sales calls.  Have them go to the store or website and actually have to try to buy your product.  Make them have to actually use your product in real life situations.  Then have them buy and use the competition.  Watch how real customers interact with your product or service out in real-world situations at their homes or place of business.  Eat lunch with regular employees in the regular cafeteria.  I talk more about getting out in the field here.

3. Listen to the Outside Voices.  If all your executives listen to is each other, then they will only feel the temperature inside the corporation. To feel the outside temperature, you have to listen to the people who are living outside in the real world. That includes the employees in the field, customers and other key partners.

Modern technology makes it easy to hear the voice of the field and the voice of the customer.  But how much of these voices are being heard by the top executives?  Just telling an executive sales are down is one thing.  Having them hear the rantings of the dissatisfied customers who stopped purchasing is quite another.  It provides a context for how to fix the situation.

Have executives listen in on the complaint line.  Have them read the comments spoken in twitter and other digital sources.  Have them see survey comments.

4. Tear Down the Insulation.  If you want the temperature inside the headquarters to feel more like the outside temperature, then you need to tear down the insulation which keeps the outside “truth” from reaching executives. Employees need to feel that comfortable in speaking the truth when talking to top executives.  It needs to be okay to speak up when the conventional wisdom inside the headquarters appears to be out of sync with what is happening outside.

5. Make Strategic Planning More About Painting Pictures.  Finally, I am getting more and more concerned about the fact that modern strategic planning departments are turning into data organizers rather than picture painters.  They manage budgets and deviations from plans, but are not providing the types of insights which change how an executive feels about what needs to get done. I see more job specifications in strategic planning asking for CPAs than I see requests for great storytellers.  If your strategists cannot paint pictures with compelling stories, then you are back to merely having piles of data (and wondering why budgets are not being met).

SUMMARY

If executives are insulated from the harsh realities of the marketplace, they will have the wrong impressions of what is going on (and make the wrong decisions). Just giving them piles of data from the outside is not enough.  Strategists need to make sure context is placed around the data so that executives can actually feel what is happening in the real world. It needs to strike a chord deep within their emotions.  To help in this process, combine the context-making with plans to force executives to spend more time interacting with the real word and the people in it.

FINAL THOUGHTS

Maybe the best way to keep executives from hiding in headquarters offices is to eliminate headquarters offices.  There are many companies which do this.

Corporate Strategist, Plan Thyself (Part 3)

THE STORY
Once upon a time, there was a man who approached a football coach and said the following:

“I am a great football player. Look at all of my awards. Look at all of my trophies. I am recognized throughout the land as a great football player, and I would like to join your team.”

“Wonderful!,” replied the coach. “We have a shortage of good linesmen. Get out there onto the practice field with the other players. Get up on the line and show me what you’ve got.”

The man did as the coach asked. As it turns out, he performed terribly on the line. He was so weak relative to the player on the opposing side that he eventually had to be taken off the field on a stretcher.

As the stretcher was being taken off the field, the coach went up to the injured player and said, “I thought you said you were a great football player. You looked awful out there.”

The injured man replied, “I am a great football punter, not a linesman.”

THE ANALOGY
Just because a person may be great at playing a particular position in football does not mean that they are great playing every position in football. Different positions require different skills and abilities. That is why football players tend to specialize at excellence in only a couple of similar areas.

As we saw in the story above, this man was well regarded as a punter and had lots of trophies for that skill. However, being a great punter does not provide the skills needed to be a great linesman. Rather than claiming to be a great football player, he should have limited his claim to being a great punter.

A similar situation often happens in the business world. A corporation has success in a particular area, and suddenly they declare themselves to be a great corporation. It may be that their success came in a narrow specialty. However, by classifying themselves as a great corporation, they may get the idea that their skills are broader than they really are.

As a result, the corporation may decide to tackle strategies where they have no right to be, much as that punter did. And, similar to the punter, the corporation may come out of the battle weak and on a stretcher.

THE PRINCIPLE
This is the third in a series on building strategic plans for the role of the corporate headquarters. As we have seen in one of the prior blogs, corporate headquarters needs a strategy as much as its divisions. If the corporation headquarters does not have a definitive strategy for adding value to its divisions, then perhaps the divisions should be spun off and the corporation folded.

In the last blog, we looked at various ways a corporation can add value based on how much it gets involved in the activities of the divisions. In this blog, we will look at ways in which a corporation can specialize its skillset to help certain types of divisions. Much like a punter specializes in punting, a specialized corporation will build a particular type of portfolio—the types of divisions that benefit most from the corporation’s specialized skill.

To illustrate this point, we will look at the various lifecycle stages which a division goes through. These life stages go from new business incubation, through rapid growth, into maturity and then fall into decline. At each stage, a division has different success requirements. If a corporation can excel at building success for one of these life stages, then they can develop a corporate strategy of adding value for firms at that stage in their lifecycle. Then the corporate portfolio would specialize in being full of divisions at that particular life stage.

Listed below are six ways a corporation could specialize, depending on life stage of the divisions.

1) Entrepreneur/Visionary
In this specialty, the corporation is skilled at envisioning what the Next Big Thing is going to be. This requires being able to examine the marketplace to see where demand is evolving to and where the holes are in currently meeting that demand. Then, once finding where that next great opportunity might be, the corporation is skilled at making the right initial investments to create or acquire what will evolve into that next big thing.

Once the company proves the inevitability of that next big thing, the corporation can cash in on the value added by selling the division at a huge multiple, or spinning it out into an IPO, or hold it for a longer term gain.

2) Venture Capitalist
This is the corporation which may not have the entrepreneurial skills to dream up the next big thing, but has the skills to recognize the next big thing when it is in its infancy. Often times, these new ventures are started by people who are skilled at visioning, but not skilled at running professional businesses. As a result, the venture capitalist type of corporation provides funding, nurturing and teaching, so that the young division can make the leap to the next level of development—becoming a stable business.

As with the entrepreneur/visionary corporation, most of the value is unlocked at the time that corporation cashes in their ownership position. The venture capitalist corporation can cash in on the value it adds by spinning out the venture into an IPO or by selling at an incredibly high multiple to a deep-pocketed firm.

3) Growth Funder
During the rapid growth phase of a division, they tend to consume a lot more capital than they provide. Eventually, the cash flow is expected to turn positive, but at this stage, the division is in need of funding. A growth funder corporation is skilled at understanding how to help divisions through this rapid growth phase. They have the resources and discipline to properly stage the funding of the growth. In addition, the corporation understands how to properly scale up the infrastructure to support the growth.

In general, the growth funder adds value to helping the division grow in a way that doesn’t overstress the young division’s capabilities. By giving it a strong operating infrastructure, the corporation enhances the likelihood that the growth will be successful and lead to profitable market leadership.

4) Operator
Once a firm reaches maturity, ultimate success shifts even more towards operating efficiency. “Operator” corporations are experts in understanding how to be a great and efficient operator. They know the tricks to squeeze out a little more in sales and a little less in costs. They mentor the firm and help it install the various procedures and investments needed to get to a higher level of performance.

Here, the value added by the corporation is relatively immediate. As the improvements to the operation improve the cash flow created, the stock multiple on that cash flow comes into play right away.

5) Turnaround Expert
Sometimes, companies fall from maturity into decline prematurely. A turnaround expert can breathe new life into the falling division and extend its useful life. Often times, large corporations who are not turnaround experts and prefer growth businesses will sell off these divisions relatively inexpensively. This is what is happening at a lot of the big consumer product companies these days, like Unilever and Proctor and Gamble. The turnaround expert can buy these established, but falling brands from companies such as these and get more life out of them, usually by unburdening them from the large infrastructure of the old corporation.

Whereas corporations who add value to early stage life cycles get most of the value out at the time they sell, for a turnaround expert, they establish a lot of the value in their ability to buy the brand inexpensively and then bring it back to former glory.

6) Bottom Feeder
This is the corporation who can find pockets of value in even the most distressed of organizations. Usually, bottom feeders get the assets at bargain basement prices. Then they redeploy the assets in a way that makes money. Maybe all they keep are the rights to some brand names that are moved to a more successful operating division. Or perhaps the only thing of value is the real estate, which is repurposed. As with the turnaround expert, much of the value added comes from buying well and then having a better idea of knowing what to do with what was bought.

SUMMARY
If a corporation specializes in developing skills which add value in a particular way, then the corporation can have a strategy of building a portfolio of businesses which would benefit most from that specialized skill set.

FINAL THOUGHTS
In many of these instances, once the corporation adds its value to the division, it may be in the corporation’s best interest to divest of the division and find new ones to fix. Hence, the corporation becomes the constant, and the divisions are like raw materials to be manufactured into something better and then sold at a profit.

Corporate Strategist, Plan Thyself (Part 2)

THE STORY
Earlier this year, McKinsey conducted a survey with a large number of business people regarding strategic planning. They not only surveyed people at the corporate headquarters, but also executives at the division level.

To me, the most interesting part of the results had to do with the idea of collaboration. The survey asked these business executives about how much collaboration there was at their company between headquarters and the divisions on strategy formulation.

The study found that the executives at corporate tended to think that there was a lot more collaboration going on than executives at the division level. Whereas corporate saw their conversations with the divisions as collaboration, it would appear that the divisions were more likely to see those same conversations as something else, like commands or meddling. I guess collaboration, like love, is in the eyes of the beholder.

THE ANALOGY
As this survey seems to point out, not everyone perceives the value of corporate in the same way. In the last blog (see “Corporate Strategist, Plan Thyself (Part 1)”), we saw that it should not be automatically assumed that a large corporation running many divisions is the ideal way to run your business. If the corporation is not adding sufficient value, it should be drastically cut back, or perhaps even eliminated/outsourced.

In this blog we will look at ways in which a corporation can add value.

THE PRINCIPLE
We will briefly describe six ways in which a corporate headquarters can add value to its divisions. We will start with the simplest and least involving forms of value and work our way up. In general, as we move up the ladder, there is greater potential for the headquarters to add value. Also, in most cases the process builds, in that each succeeding level also tends to incorporate the prior levels as well.

1) Protective Parent, Protected Child

In this version, the corporation protects and shields the divisions from having to deal with all the messy details of being a corporation, so that the divisions can focus on their particular businesses. The headquarters handles (a) communicating with shareholders and analysts, (b) managing shareholder regulatory authorities, (c) defining the corporate governance system, and (d) preparing and filing external financial reports.

By dealing with the messy issues and distractions like Sarbanes Oxley compliance and public relations, the headquarters unburdens the divisions so that they can focus more on trying to make money. Although this is adding value, it is not a whole lot of value and does not require a very large corporate infrastructure.



2) Coach, Team

In this scenario, the corporation helps the divisions become better than they would be on their own by using its expertise to coach the divisions on how to be professional business organizations. This involves tasks like (a) setting expectations (performance targets and goals), (b) challenging and setting cultural norms, values and behaviors (how to act), (c) showing how to protect corporate assets (brand names, cash), (d) defining operating rules and policies.


In other words, the coaching headquarters shows the divisions what role they are playing, what is expected, and how to do it in an efficient, professional manner. Usually, the coaching headquarters also acts like the parent in option #1. This adds more value than option #1 alone, but still not a lot. If the division were a stand-alone business, it might be able to get this same value cheaper through using consultants.


3) Banker, Borrower

In this scenario, the corporation adds value by taking the excess cash out of each of the divisions and then reallocating it based on where it can get the best return. In this manner, the corporation acts as the bank. If the division wants money, it must make a compelling case before getting it.



The corporation adds value as a banker because (a) it typically has a lower cost of capital than a stand-alone division, (b) it has more options for sources and uses of capital, thereby allowing it to make better investments than a stand-alone business whose options are more limited, (c) it can typically add more rigor to how things get financed, creating better decisions.

This level increases the value added, but as we saw in the last blog, capital is not particularly scarce and good stand-alone divisions would still have lots of options for gaining capital without a corporate headquarters.

4) Builder, Legos

In this scenario, the corporation takes a more holistic look at their portfolio. Individual businesses are not seen independently, but rather as role players in the larger portfolio. The role of the corporation is to envision the ideal portfolio for a given corporate strategy and they use their power to design and build that portfolio. In this fashion, the corporation is a strategy builder, snapping together divisions as if they were Legos.


As such, the corporation (a) determines the larger strategy and what competencies are needed in the portfolio to make it happen, (b) manages the acquisition and divestiture process to get those competencies, (c) initiates new ventures, (d) acquires/divests/organizes divisions and their structure, (e) places expectations on the divisions as to how they contribute to the larger strategy. This is starting to get more sophisticated in terms of corporate value add. It not only looks for ways to make the individual businesses better, but looks for ways they can contribute to something which goes beyond their individual business.

5) Specialist, Clients

In this version, a larger percentage of the tasks of business become centralized at the corporate level. The logic is that by centralizing these functions, the corporation can become better at delivering the services than if each division did them separately. This would be a result of economies of scale, the ability to hire more qualified individuals, and a more steady stream of work, so that expertise can become more specialized. This could involve what companies typically call “shared services.” It could include things like Legal, Finance, Human Resource benefit administration, Foreign exchange, and so on.


Although this creates even greater opportunities for corporate to create value, it can also create greater opportunities for corporate to destroy value if they do the centralization improperly (see the blog “Sometimes It’s not nice to share”). This is the double edged sword of value creation. The more corporate gets involved, the more it can help as well as the greater the likelihood it can hurt. As we move up the ladder of involvement, the rewards may be greater, but so are the risks.

6) Synergist/Alchemist, Resources


This is the highest level of corporate involvement into the divisions. At this point the divisions have very little independence. The corporation is actively working to get the most out of what it owns. People, resources, patents, and competencies are frequently moved from division to division for the greater good. All potential synergies in cross-divisional activity are looked for. Even if a decision serves to destroy some value at a particular division, it may demanded by corporate if it is for the greater good of the overall portfolio.

At this point, not only have many key functionalities been moved to corporate, but also a greater percentage of the overall business decisions. As mentioned earlier, if done well, this can add great value, but if done poorly can destroy value.

SUMMARY
There are many ways in which a corporation can position its headquarters to add value. Depending on the level of value added, one will get different sizes and structures of headquarters (as well as different levels of risk). Since there is no one-size-fits-all headquarters approach, you have to make a choice. You must determine which option is right for you. It is important to proactively plan the strategic role of the corporation in advance in order to ensure that (a) you are building the headquarter structure properly, and (b) you are truly adding the most value.

FINAL THOUGHTS
If you ask the divisions what kind of corporate structure they would like for a headquarters, they would probably not pick one of the higher levels. Of course, this is like asking young children what type of discipline they want from their parents. This is a decision that cannot be left to the children.

Corporate Planners, Plan Thyself (part 1)

THE STORY
There’s an old joke that circulates around the business world. It goes like this: What are the three biggest lies in the world? Answer:

1) I’ll respect you in the morning.
2) The check is in the mail.
3) I’m from Corporate, and I’m here to help.

I used to work for a company where the divisions hated the corporate office (which would probably describe most large companies). At the time, I was working at the corporate office and needed to fly out to the divisions to help them with their planning.

To try to break down the barriers between corporate and division, the first thing I would do when visiting a division office for the first time was to shake the hands of all of the division executives and say, “I’m from corporate, and I’m here to help.” At first I would get a lot of odd looks, because the division executives did not know where I was coming from when I said that old punch line.

Later, I would tell them that I used to be a division person and that I hated corporate as much as they did—maybe even more, because I had to deal with the corporate executives on a more frequent basis. After that, the barriers were broken and we got along just fine.

THE ANALOGY
There’s a reason why most people at the division level hate corporate. They don’t perceive any value coming out of corporate. The logic at the division usually goes something like this:

1) Corporate really doesn’t understand what is going on out here in the field. As a result, they ask us to do things which make it harder to earn a profit. They don’t help us, they hurt us.

2) Corporate sucks all of the profits out of the division to pay for their lavish lifestyle at the corporate level. They live high on the hog while we slave away out here with insufficient funding.

3) The real profits are made out in the field where the paying customers are. Yet, instead of rewarding us for doing the deals, they pat themselves on the back and keep the big bonuses for themselves. In retailing, the phrase that was often used to describe this was “there are no cash registers at the home office.” If retail profits typically have to come via a cash register, then the people closest to the cash registers should be rewarded highly.

Whether or not you agree with these reasons is immaterial. If the divisions believe it, they will act accordingly. And you have to find ways to deal with that attitude, just as I did in the story above.

Divisions typically resent corporate because they do not perceive adequate value for the cost. This raises a valid question which all corporations should consider…how much value does corporate actually bring to the organization? Are all of the stakeholders getting a good return on the investment in corporate, including shareholders, customers and division employees? If corporate significantly shrank or disappeared, would the divisions be better off or worse?

THE PRINCIPLE
This is the first in a series of blogs discussing strategic planning for the corporate function. We often talk about doing strategic planning of the business portfolio or of planning for individual divisions or departments. However, we also need to strategically position the corporate headquarters. We need to ask ourselves why the corporate function exists, how it is supposed to add value, and how to optimize that value-adding function.

In today’s blog, we will try to destroy the notion that large corporate operations running a number of divisions is an essential and inevitable way to run a business. On the contrary, large corporate functions are optional and should only be put in place if the value it provides exceeds the cost.

The logic behind this is as follows:

1) A knowledge economy is less dependent on such structure than the old manufacturing-based economy.

2) Technology and globalization make it possible to get work done without such a structure.

3) Many supposed corporate synergies actually turn out to be dis-synergies.

4) Networking can often achieve the same results without the costly infrastructure.

These points are briefly discussed below.

1) A knowledge economy is less dependent on such structure than the old manufacturing-based economy. In the old manufacturing economy, success depended on amassing a large number of resources. One needed large, expensive factories, large pools of unskilled labor, and access to lots of cash. Big companies with big corporate infrastructures were typically needed to pull this off. The corporate office used its clout to get the cash and provided the brains for the unskilled workers.

In a knowledge-based economy, the workers are highly trained experts in their fields, who know more about their expertise than corporate (corporate has less value to offer the typical employee). There is less of a need to amass huge factories and thousands of employees, so there is less of a need for a corporate function to coordinate this.

As we will see below, even if factories and money are needed, they are easier to come by. You can easily outsource manufacturing and there are many new sources of investment money which do no require your being a large publicly-traded corporation like venture capital, hedge funds, financial institutions, and so on.

2) Technology and globalization make it possible to get work done without such a structure. In the old days, one of the key functions of corporate middle management was to be an intermediary between the field and the top leaders. These middle managers would gather the data in the field and get it to corporate. Then, when the top leaders made a decision, their role was to relay the orders back to the field.

Modern technology virtually eliminates this corporate task. Data from the field is downloaded directly to headquarters via satellite or internet in real time. Cell phones, Blackberrys, Video Conferencing, emails and other such communication tools make it easy for top management to get directly in touch with the field on a very rapid basis. As a result, it is easy to flatten the corporate infrastructure and take out many layers of management which used to be necessary for relaying information back and forth.

Through the internet, it is easy to find information and sources for getting work done. Small businesses can outsource just about anything through the internet, such as product design, marketing, and manufacturing. There are even social networking sights so that you can find peers to bounce ideas off of. This allows a few people working in a garage access to the types of skill sets which in the past could only be found within a large corporate bureaucracy. For more on this topic, see the article on Minipreneurs from Trendwatching.com.

3) Many supposed corporate synergies actually turn out to be dis-synergies. In an earlier blog (see “Sometimes It’s Not Nice to Share”) I talked about how many corporate headquarters try to create cost advantage synergies through “shared services.” In other words, instead of developing expertise in certain areas at each division, centralize the function at corporate and share it amongst the divisions. Although this sounds good in theory, that prior blog showed that in many cases the corporate approach destroys value rather than adding value, because it raises total costs, reduces flexibility, increases time to get something done, and generalizes functions which work better when specialized to the division. Hence, the corporate approach may be destroying functional values rather than increasing them.

4) Networking can often achieve the same results without the costly infrastructure. In another blog I wrote recently (see “Howdy Partner”) I pointed out the fact that networking with others can often be more productive than trying to create it all in-house via a corporate infrastructure. The idea was that control is more important than ownership, and as long as your network with others allows you to maintain sufficient control, it can be far more productive than when you try to own everything. Networks allow you to connect with dedicated experts, who can better suit your needs than a generalist visiting from corporate.

SUMMARY
In today’s society, a large corporate infrastructure is no longer essential. There are often more effective ways to get many of those resources at a higher value. Therefore, the large corporate center is not a given. It should only exist if it fits into the overall strategy. It’s strategic function and purpose needs to be planned, just as much, if not more than the divisions.

FINAL THOUGHTS
Eddie Lampert’s ESL Investments, the multi-billion dollar fund that has the majority ownership of Seas Holdings, has only about 15 employees. Not a whole lot of corporate infrastructure there, but ESL Investments has made its investors very rich over the years.