6 More Elephants In The Room. Do You See Them? (Part 2 Of 3)

Last time we discussed 6 elephants in the room. Here are 6 more.

1. Taxes

We all know the US couldn’t be friendlier to corporations. But you’d be hard-pressed to find a CEO who admits that US corporations are under-taxed. No one talks about their privileged tax status. Many large companies pay no taxes at all. We know that the companies that do pay taxes seldom – if ever – pay the statutory rate. We also know the corporate share of US tax revenue has fallen dramatically over the years. In fact, “as a share of GDP, U.S. corporate income tax revenue is the lowest among G7 countries.”

We know that questionable (e.g., post office box) tax havens reduce tax revenue by billions of dollars a year. (“In 1966, roughly 5% of U.S. corporate profits were booked in foreign tax havens … today more than half of corporate profits are booked abroad.”) Yes, it’s good to be a US company (which also receive huge subsidies in various forms from the federal government).

This elephant is blindfolded — but there are small holes in the blindfolds. He can see just fine.

2. Human Resources

Human resources – HR – is not exactly a well-respected corporate function. HR isn’t trusted, is aloof, often business process ignorant and political, among too many other problems. If you Google “why does everyone hate HR?” you get buried in responses, like this one from Liz Ryan:

“HR people seem to take the company’s side in any interaction, never the employee’s side.

“HR people seem to want to get employees in trouble for tiny infractions.

“HR people are not viewed as trustworthy, even though they say, ‘Tell me what’s on your mind!’

“HR people stand idly by while incompetent and abusive supervisors get promoted and mistreat employees.

“HR people often ‘know HR’ but don’t know anything about the business they work for.

“HR people often spout policy instead of actively getting involved to remove roadblocks their employees face.

“HR people are seen as political and more concerned with their own place in the company’s pecking order than with the welfare of the team.

“HR people talk more about policies, benefits and other announcements than they talk about culture, fear, trust, conflict or any of the million human issues that arise in every organization.

“HR people often have trouble seeing the “human side” of any issue, from a time-off request to a variation in a pay-grade or a hiring issue, focusing instead on keeping every process uniform and exception-free.

“HR people, who can be Ministers of Culture in their organizations, are too often seen as culture-killers instead!”

This elephant is too annoying to ignore.

3. Communications

How many times do we ask “management” to communicate more effectively, more often and more transparently? Everyone has ideas about how they would handle situations that require special – even routine – communications. Why? Because internal and external communications are flat-out horrible. Employers and shareholders often have no idea what’s going on in their own companies. Many CEOs are the worst spokespersons for their companies, but no one tells them how bad they really are – including their friends (especially their friends). Why? Because that same CEO just granted them some more stock options.

Miscommunication is expensive. The wrong message at the wrong time can sting a company for years. Public companies that mismanage their investor relations (IR) are stung the most. But it happens all the time.

This elephant never says a thing.

4. Strategy

A Harvard Business Review article by Ron Carucci says it best:

“Many executives say they weren’t prepared for the strategic challenges they faced upon being appointed to senior leadership roles. Often, these leaders fail because they lack depth in their competitive context.”

Many companies talk about their earth-shattering strategies. They love to describe their “strategic vision,” when everyone knows that “strategy” is almost always incremental, operational or just plain tactical. Very little is disruptive. Many well-known companies committed strategic suicide. Chatter could be heard everywhere, but no one sounded the alarm. Not employees, customers, directors, Wall Street analysts – no one. Can you spell I-B-M? A-T-A-R-I? Or H-P? Bungled strategies are everywhere.

This elephant keeps waiting for his turn to talk, but no one’s interested in what he has to say.

5. Innovation

Truly innovative products and services are hard to find – except in some well-funded start-ups that occasionally hit the mark. We all know that incremental improvements in existing products and services masquerade as innovation. “Digital transformation” is also almost entirely incremental: very few companies “transform” much of anything. None other than Clayton Christensen declared that 95% of product innovation projects fail. Innovation is hard. Most companies find it difficult if not impossible to innovate, but we don’t talk much about it. A few companies have discovered the joys of sending their R&D teams to some city far, far away from headquarters, but the vast majority still insist on in-house innovation, which everyone knows has a poor ROI.

This elephant hasn’t changed his pitch in decades.

6. Business Education

Business education is stuck in “what” and the wrong kind of “how.” We show students how to run spreadsheets, summon Tableau, build models and code (a little). We teach them “steps,” and what they need to know to get certified as accountants, financial engineers, marketers and Bloomberg terminal jockeys. We teach them the “skills and competencies” we believe will make them certifiable. But we don’t teach them how business actually works. We certify them as “project managers,” but don’t educate them about how projects are managed – as they all are – on the edge. We teach them how to pass the CPA exam, but we don’t teach them much about what it’s like to actually be an accountant or how to manage an accounting career. We especially don’t teach them about the nuances of numbers and how numbers are used to sell and destroy ideas, careers and companies. Students cannot describe what accountants, innovators, marketers, supply chain optimizers, technologists, financiers, M&A analysts, venture capitalists or auditors actually do all day, hour by hour. Or the problems they’re expected to solve.

This elephant has lots of ideas, but no one ever asks him what they are.

Really?

5 more elephants to go.