When the “big idea” goes haywire
Often an organizations's strategic vision is based on "the big idea." The strategies being pursued by the organization sum up to a headlong rush to implement the idea.
Being single minded about a big idea has generated some of the most successful organizations in the land. Think of FedEx, Apple and Southwest Airlines, for example, as organizations whose founders had "the big idea" that brought them and continues to bring them great success. Next-day delivery, the best personal technology and offering travelers low-cost flights are big ideas that wound up winners for the organizations that gave it their all to implement them.
However, just as easily the head-long rush to implement "the big idea" can lead to disaster. It's a question of being clear eyed about risks and rewards and of continuing to assess the marketplace as the plan is crafted and implemented. If the premise is wrong or the assumptions are wrong and are not continually tested, "the big idea" can wind up being the rocks upon which the organization crashes and sinks.
If you are going to bet it all, realize you are doing so and do so only with an understanding of what's at stake.
In the 1970s and 1980s I was a financial journalist reporting on the mortgage industry. It was at the core of the economy but not at the center of national attention, Lenders of various stripes but mostly commercial banks and savings institutions put out money for 30 years at a fixed interest rate, with the home as security, and borrowers paid the money back over that period. The concept was simple and it worked, putting the majority of Americans in their own homes.
Even then, however, Wall Street was starting to circle the mortgage industry, seeing the vast sums locked up in homes and mortgages and trying to figure out how to unlock these sums in ways where third party investors could share in them and the Wall Street firms could benefit from them. Thus came the secondary mortgage market, teaser rates, adjustable rate mortgages, financial futures, collateralized mortgage obligations, tranches of debt, and much more in the arcane lingo of Wall Street and modern mortgage finance. What once was a very simple business became complex, something that was not easily understood.
We now know that this effort to "securitize" mortgages went haywire, because the risks and rewards were not properly assessed. The machine that Wall Street built was based on false premises and ran out of control, to the great detriment of our economy and to the end of many organizations, some the former pillars of our economy.
It's good to not only keep the Apples and FedEx's in mind when crafting a strategic vision and strategies to get there. Think of Lehman Brothers, Merrill Lynch and Washington Mutual, as well. When you are planning and building the new machine, be sure you understand how it will operate and the risks and rewards of operating it. If you get it right, success can abound. But if you get it wrong, woe be to you!
