Presented by: Richard Franzi
Unintended consequences can wreak havoc on a company. Richard Franzi will share examples of well-known companies who have experienced unintended consequences from business decisions, including Coke, Walmart, Wells Fargo, Volkswagen, Martha Stewart, Kodak, and Pepsi. Richard will speak on what happened, why it happened and what they could have done to better prepare. Attendees will gain insights on how to evaluate their own business decisions differently, as well as key strategies to help mitigate potentially damaging results from unintended consequences.
28. 1.) Slow down the decision process
2.) E
3.) C
4.) U
5.) R
6.) E
29.
30.
31.
32.
33. 1.) Slow down the decision process
2.) Expand your knowledge
3.) C
4.) U
5.) R
6.) E
34.
35. 1.) Slow down the decision process
2.) Expand your knowledge
3.) Clarify the desired outcome
4.) U
5.) R
6.) E
36.
37.
38. 1.) Slow down the decision process
2.) Expand your knowledge
3.) Clarify the desired outcome
4.) Unify the team
5.) R
6.) E
39.
40. 1.) Slow down the decision process
2.) Expand your knowledge
3.) Clarify the desired outcome
4.) Unify the team
5.) Retain control
6.) E
41.
42.
43. 1.) Slow down the decision process
2.) Expand your knowledge
3.) Clarify the desired outcome
4.) Unify the team
5.) Retain control
6.) Ensure you stay outcome focused
44.
45. There are downsides to everything;
there are unintended
consequences to everything.
Steve Jobs
“”
46.
47.
48.
49. 1.) Slow down the decision process
2.) Expand your knowledge
3.) Clarify the desired outcome
4.) Unify the team
5.) Retain control
6.) Ensure you stay outcome focused
Introduce myself smile ☺
Thank host(s)
Hot new release, #1 two categories
Employee morale/control firms future3 Types
5 Causes
6 SECURE
Explain handout and interest card
Let’s get this party started!
3 books
Experience quote
Original BOOK: Critical Mass 1st book EVER
GP3 130 middle market business executives
BUILD TCMC (SMD & SCA)
Sustainable market differentiation & scalable competitive advantage
The book I am here today to talk about
74 seconds
2009
6 CEO Peer Groups
Social Media Platforms
35 seconds
Neal Ferguson
Havard, Oxford, Stanford
14 books
Kissinger
Time 100 most influential
Read Quote
36 seconds
2003
CA Coastal Records Project 12,000 photos
Sued for $50Mil
Publicity brought interest 1M views
Self-fulfilling prophecy
BUILD $150,000 legal fees-1st order
“Streisand Effect” UC frivolous-2nd order
66 seconds
Jim Collins Built to Last
Hope to add some of you
16 seconds
Black Death 75 to 200 million lives
Over half of Europe’s population in mid 1300s
One possible cause Fleas Silk Road
BUILD Pope Gregory 9th 1230 AD Vox in Rama
Black Cats=Vessel of Satan
Led to a wider fear of cats & witches over time
BUILD Lord Mayor of London w/doctors Kill pets
Natural predators of rats
Not business but great name for the book!
113 seconds
1910-2003
Father of modern sociology
Started at Harvard/Spent most career at Columbia University
Developed notable concepts:
Reference group, Role model, Focus group
Work on deviance & dysfunction
BUILD 1936 essay
“The Unanticipated Consequences of Purposive Social Action”
Thinking what is a company but a small society?
Leader, Authority Hierarchy, Citizens/Employees, Working for common goal
TO HELP YOUR Avoid, Reduce or Mitigate UI’s of your decisions
59 seconds
Read the slide
Unanticipated changed to unintended over time
14 seconds
Types of Unintended Consequences
A negative effect which is contrary to the original intention
A potential source of future problems which is commonly referred to as Murphy’s Law
A positive unexpected benefit called serendipity
All are bad for you as the leader STORY
Look at the conditions
1 billion presentations 2 million remotes sold annually
Walk the four corners of your business
46 seconds
Is your Eco robust enough?
Understand what the environments creates?
28 seconds
Read the causes
10 seconds
Ignorance is the 1st condition
Factors determining ignorance in business
Lack of rigor in data collection
Incomplete analysis of information due to overconfidence
“Insufficient evaluation”
Over reliance on past experience to guide future decisions “We’ve seen this”
Employees expected to make decisions without the proper training or experience-”Make it up as they go”
33 seconds
Who remembers that?
During the 90’s
Early days of dial up
Tying up switches 7 Eq.
Fees
Opposite effect
Once on stayed on
Connection not guaranteed
53 seconds
Error is the 2nd condition
Adds Mistakes
Factors determining Error
Faulty data collection
Incorrect analysis of information
Information is withheld
Facts intentionally misrepresented
27 seconds
Immediate Interests 3rd Condition
Factors determining immediate interests
Fixation on short term results
Emphasis on personal gain
Desire for a “quick fix”
Consider a subset of the entire situation
Clients or competitor focused
33 seconds
Competition Apple Vs. Samsung
August 2016 release 1 month B4 7 Plus
BUILD Then this start happening
Recalled initial units no good either
72 seconds
Images Facebook
BUILD FAA Warning like this
Not good for your brand
2.5 million recalled
700 researchers
200,000 phones
30,000 batteries
$5.3 billion
Battery division so a sales decline of over 20%
January 2017 Samsung sent a kill code to disable remaining units
April 2018 Samsung reports to have collected nearly all
Leave the room
81 seconds
Basic Values is the 4th Condition
Factors determining basic values
Blind spots obstruct view
Sacred cows prohibit certain options for being considered or even discussed
Groupthink inability to evaluate options or causes false consensus
EE’s/partners values misunderstood
24 seconds
2009 Ward 6 Capital
BUILD
Guy peeing
Councilman Tommy Wells quote
Calls to police, public drinking, etc.
BUILD Retailers created the 2-pack
Months following more complaints
Alcohol related disorderly conduct & police calls increased
77 seconds
Self Defeating Prophecy is the 5th Condition
Factors determining self defeating or self fulfilling prophecy are
Execs lack confidence and are not committed to the required actions
Focus on self interests vs. results
Employees believe outcome unobtainable or undesirable
Believing non-related issues influence outcome
35 seconds
Mid-2000’s
Defeat device- 2-liter diesels. VW/Audi/Porsche
2009 Green Car…Jetta TDI
2015 CARB/January US File a suit seeking $40b/paid $4b
Loss of awards-Wolfgang you did it too well
Engine was 40x Legal limit
500k US/11 million cars/$30B fines
6 execs indicated/Martin Winterkorn/Mike Horn
BUILDs
Funny memes Add Bloomberg
BUILD
June Rupert Stadler Audi CEO Arrested/Class Act
75 seconds
Looked at a few examples and 5 environmental conditions that can cause unintended consequence in business.
Attention to what executive teams can do
Dr. Merton convince we can lower our risks proper steps
Highlight 6 SECURE® Model
I think of them as Best Practices
Strategic decisions!
28 seconds
Review the 6 best practices
Share the acronym
Remember themSECURE®
Time: 22 seconds
Review the 6 best practices
Share the acronym
Remember themSECURE®
Time: 22 seconds
#1 Slow down the decision process
Can be difficult/counterintuitive/most questioned
Give yourself enough time ABCD
Schedule time for strategy
HBR 187 cos CEOs spend 3hrs/month
Focus on important vs. urgent
Deliberated now act deliberately
Resist emotional decisions
Dr. Daniel Kanneman Fast & Slow
Time: 67 seconds
PLAY VIDEO
25 seconds
Found 1886
1980s The Pepsi Challenge
Blind tastes tests A TASTE FOR AN EARLIER TIME
1985 New Coke response
Excited with their new formula
109 seconds
People hated it
Lost Americana
Admitted Pepsi was the taste people prefer
Pepsi capitalized on the situation
BUILD TO VIDEO
BUILLD <3 months reintroduce original formula as “Classic Coke”
Review the 6 best practices
Share the acronym
Remember themSECURE®
Time: 22 seconds
#2 Expand your knowledge
Assess internal knowledge
Access external knowledge
Seek peer input and review as in CEO Peer Groups and REF Forums
Engage consultants
55 seconds
Review the 6 best practices
Share the acronym
Remember themSECURE®
Time: 22 seconds
#2 Clarify desired outcome
Start with the end in mind
Make time to answer questions don’t hide
Provide regular updates on progress
Explain EE’s roles and resps. Good from bad behavior
40 seconds
WF King of Cross-sell..most expensive
14&15 #1 most valuable bank brand not taking subprime risk but then 2016
8 products, Y “8 is Great” Former CEO Stumpf
BUILD2 million fraud account
$185 million fins
5,300 employees fired in retail banking
BUILD Stumpf became the face of the scandal
BUILD Landed John Stumpf here
Stumpf forfeited $41M stock
Carrie Tolstedt, Retail lost $14 grants
Stumpf retired-signed
2018 fined $1B for forcing mortgage/auto insurance
BUILD Re-establish their now tarnished brand
125 seconds
Review the 6 best practices
Share the acronym
Remember themSECURE®
Time: 22 seconds
#4 Unify the team
Encourage brainstorming for UI’s
Effective Delegation
6 levels outlined
Practice collaboration
Millennials
Never micro-manage
56 seconds
Review the 6 best practices
Share the acronym
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Time: 22 seconds
#5 Retain control
Use simulations and trials
Monitor implementation early, Don’t set it and forget it
Look for and be open to UC’s
Maintain a positive problem-solving culture
20% higher problem solving
Proactive and open to input
49 seconds
Founded in 1880s
1990’s Kodak Moment
90% film & 85% camera
BUILD Steve Sasson 1975 digital camera
BUILD later holding it
Executives killed it
“No one would ever want to look at their photos on a tv set.”
Slow down spiral
Morphing into full blown decline
2012 bankruptcy
Bitcoin miner Stock $3 to $10 to $3.
Market cap; $30 billion to $132 million
89 seconds
Review the 6 best practices
Share the acronym
Remember themSECURE®
Time: 22 seconds
# 6 Ensure you stay outcome focused
Caution too much data
Apply DIET Model
Define, Integrate, Explore, Test
Define: accurately the problem, Integrate: Transform data to info, Explore: Involve ee’s, Test you have enough data
Keep team focused on big picture and the need for the new behavior
“Don’t get stuck in the thick of thin things.”
Don’t bury business model issues into strategic decisions
55 seconds
Just read the slide
So be careful
6 seconds
One last example
1990s
We did Coke now let’s due Pepsi
Coke 75% and Pepsi 17%
Number Fever Campaign
BUILD 3-digit numbers inside of bottle caps
Prize from 1000 pesos to 1 grand prize of 1M
Grand prize awarded to 1 at the end
Instant wealth with fondness for gambling
2wks 40%/½ pop./31 million
60 seconds
Huge success at first
Pepsi selected the number 349
Announced it and invited the winner to HQ
Tens of thousands show up
Not one but maybe 800,000 caps with 349
BUILD Led to boycotts and violence
42 seconds
40 truck burned bottling plant violence 2 died
Hired armed guards to ride in the trucks
22,000 complaints and 1,000 criminal suits
Tens of millions in restitution & Fees
$5M to 500,000 non-winners
Expats left but one with combat experience
16 years 2006 Supreme Court Rule not misconductFINAL: Not their fault a subcontractor mistake
48 seconds
Review the 6 best practices
Share the acronym
Remember themSECURE®
Time: 22 seconds
Play audio
2 seconds
Talk was both enjoyable and informative
Let me know if you want me to share it with your firm or professional associations
Happy to add you to my newsletter which will have the announcement of the book release
Thank the HOSTS
Collect interest cards
Take questions
22 seconds
Talk was both enjoyable and informative
Let me know if you want me to share it with your firm or professional associations
Happy to add you to my newsletter which will have the announcement of the book release
Thank the HOSTS
Collect interest cards
Take questions
22 seconds