Careers: Are You A Sitting Duck? 13 Unlucky Questions to Ponder

Most of the articles and resources at The Disruption Group focus on corporate strategy and ways to use competitive disruption to grow your company. But what about your own career strategy?  What should you do if your company appears to be a target of disruption?  Guest columnist Zack Urlocker shows how to know if your company is being disrupted and what you should do about it to save your career.

Whenever I think about companies being disrupted I can't help but recall Michael Bedard's iconic poster from the early '80s "Sitting Duck." It says it all. 

There you are, a hard working employee, doing your job and next thing you know someone's taking shots at you.  The sad thing is most employees never really take notice or what's going on until it's too late. 

Of course, from the outside, it's a whole lot easier to be objective.  Most people outside of the music industry would not now consider a career in the record industry.  And the magazine publishing and newspaper industries have been in trouble for years.  Enterprise software?  Outside of hosted on-demand offerings, it's not exactly a barn-burner.  All of these sectors have seen seismic changes due in large part to the disruptive effect of the Internet.  But would you recognize such changes in your own industry? 

Here's a checklist of 13 unlucky questions to consider:

1. Is your company consistently unprofitable?  A failure to generate profits is the first and most significant sign that a company is in trouble.  While there are times when companies will run unprofitably as they invest enter new markets, in most other cases, lack of profitability indicates a more fundamental problem in strategy or execution.
2. Has revenue growth stalled or even declined?  To most investors, if you're growing at more than 20% a year, you're considered a growth company. In tech stocks, it's not uncommon to see growth that is 40 - 100% per year.  If your company used to be growing and is now flat, watch out. This was the biggest warning sign I saw when I was at software maker Borland in the late-90s and it caused me to write up a checklist similar to this one to benchmark our turnaround. Guess what? We failed the checklist and I was saw similar troubles across the sector.
3. Is everyone in your market having trouble?  If your company is the only one suffering, that's one issue. And it may be fixable with changes in leadership, product strategy or better execution.  But if all or most of your competitors are also suffering, then it's an indicator that the entire market is in trouble and likely being disrupted. 
4. Do people routinely say "Are they still around?" when you tell them where you work? This sounds tongue in cheek, but its a sign that your company may have become irrelevant.  Similarly, if industry analysts and editors frequently write about the demise of your industry, they may be closer to the truth than you realize.  When Marc Benioff, CEO of Salesforce.com declared the "End of Software" few people took him seriously.  But if you worked at Siebel or PeopleSoft or dozens of other traditional enterprise software companies, you probably should have.  Similarly if the "death pools" predicting the demise of magazines have been scarily accurate.  These social indicators draw on the wisdom of crowds and can be more accurate than you might think. 
5. Is there high turnover in the executive ranks?  While some turnover at the executive level is normal, if you've had three CEOs in as many years, or if your exec staff have all left "to spend time wiht family" those are red flags.  When Ed Zander retired from Sun it was along side several other high-profile departures. While bad execs get fired, good execs leave if they don't see a financial upside.  Since most executives have stock that vests over a 4 year period, it's not just about short term prospects either. If your company has a problem retaining executive talent, it may mean they believe the situation is unfixable for several years. 
6. Is your company strategy zig-zagging every six months to catch some new wave? That could be a sign that the core business is in freefall and management is distracted looking for the next big thing. Consider the tenure of Carly Fiorina when she was CEO at HP. She was out promoting a strategy based on multi-media convergence, big screen TVs and iPods.  Naturally she was out at CES and Davos hobnobbing with the likes of Gwen Stefani, Sherly Crow and Matt Damon.  So who was minding the store?  Oh yeah, no one.  But when she got sacked, she took a severance package with her worth a minimum of $21 million.  If your job gets cut, you'll be lucky to get a couple of extra weeks paid.  Good CEOs focus on operational excellence and strategy; not gimicks. 
7. Are you losing deals to competitors that are a fraction of your size?  Often new entrants to the market are much smaller and their products have far less functionality, but they do enough to get the job done.  If your company is losing deals to companies that weren't even on the radar a couple of years ago, that could be a sign that the market is changing rapidly. 
8. Do customers complain that your products are too complex? That may indicate that your product has become overkill.  The next step is if customers sideline your products only for existing implementations and start using simpler solutions for new projects.
9. Is your company half pregnant? Sometimes companies that are disrupted will try to show that they too can play the disruption game.  They may launch a high-falutin' project or acquire a small startup to show that they too can be nimble and responsive.  Media companies were among the first to create web sites, but they never figure out how to make money with them.  And lots of enterprise companies introduced on-demand offerings, but none had the kind of focus Salesforce.com brought to the table.  If the CEO refers to your company as being "like the largest startup ever" with hundreds of millions of dollars in the bank, he's omitting a few key points.  Like the fact that your company is proabably too bloated to compete with hungry startups and that the corporate culture kills innovation. 
10. Is your company a bottom-feeder? Larry Ellison joked about CA years back by saying "Every healthy ecosystem needs a bottom-feeder."  While that's true, you don't necessarily want to work for a company that keeps acquiring companies and stripping out the costs.  You can prop up a share price for quite a while with revenue through acquisitions, but unless there are significant prospects for growth, it's not much of a strategy for the long haul. 
11. Is your company obsessed with cost cutting?  You can't cost-cut your way to growth. So when companies are focused only on reducing expenses it may indicate a lack of attention on growing revenues.  Pay particular attention to short-term cost-cutting measures that hurt long-term prospects.  Elimination of employee benefits and training programs are particularly bad signs. 
12. Have layoffs become a regular occurance?  While regular performance appraisals and even dismissals to cut "dead wood" are healthy, you should be wary of companies that are routinely engaged in layoffs.  And again, if the same is happening at other companies in your space, it's double wammy. It means that if you are laid off, your prospects at finding a new job are going to be slim.
13. Are you hoping for an acquisition to be your savior? Sometimes employees will think that if things really go poorly the worst case scenario is that the company will be acquired. This is like waiting for a knight in shining armor.  While acquisitions can be good for shareholders, they are no picnic. If you're in Finance, Sales, Marketing, HR or other "non core" areas, your position is a good candidate for elimination if there is an acquisition. 

While you should not panic if one or two of the items above conditions are true, these may be symptomatic of bigger issues.  These are warning signs.

Consider using these questions as a score card that you check a few times a year.  And if more than half are true, it may be time to pack your parachute.

Whatever you do, don't jump without a plan.  I'll cover that topic in the next post.

Zack Urlocker is a software executive and regular blogger on open source technology at TheOpenForce and InfoWorld and about music at GuitarVibe. 

** Other Sources **

Podcasts: Career Coach Alan Kearns, author of Get The Right Job Right Now, has a series of career-oriented podcasts. 

Podcast 2: The Cranky Middle Manager (website, mp3 download 31 min) looks at how middle managers can execute disruptive innovation without damaging their careers.

Fortune magazine writes about how the Washington Post is responding to disruption.  The bottom line: If CEO Donald Graham can't figure this out, no one can.  The good news for the Post is they've hedged their strategy. While  competitors were doubling down by buying money-losing newspapers in order to gain share, the Post investing in and acquired companies with far greater growth prospects.  I'm amazed that more companies that are disrupted don't do what the Post has done to reinvent themselves and get out of dying businesses.

More of Michael Bedard's art is is featured in his book Sitting Ducks.  Examples of his work are also available on line at his blog.

Comments

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