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December 2000 FAQ
Q: What can we do to get through a tough business
challenge?
Your managers should realize they are in a Red Zone…yes,
a Red Zone! Most people might immediately think of football
when speaking of a Red Zone. Actually they are not very far
from the truth! Let's explore…
The Situation
"…and he's down on the 16 yard line, deep in Raiders
Territory! How's this for drama, Howard, key game of the season,
four points behind and the Giants have a real chance to score
and win this game!"
"You're right about the drama, Dan. Now let's see
if they can quickly mobilize their Red Zone offense to take
advantage of this excellent opportunity. They know that if they
fail to score a touchdown here, the Raiders will re-gain the
momentum and win this game!"
The Business Situation
Managers also inevitably encounter what we call Red Zones,
those critical times and places in the life of a company that
are characterized by the simultaneous presence of
- The opportunity for Great Gain and
- The real likelihood of Great Loss.
In the Red Zone, failure to achieve the Great Gain will result
in the Great Loss. Figure One shows the performance path
of the company as it struggles through the Red Zone and emerges
on the other side with either the Gain or the Loss. Either the
company makes a leap forward or takes a step backward. There
is no "in between."
Figure 1: The Red Zone
In football, the Red Zone is the last twenty yards on the way
to a touchdown. Once inside the opponent's 20 yard line, a team
either scores a touchdown, the Gain, or fails to score and experiences
a loss of enthusiasm and momentum.
Unfortunately in business there are no 20 yard markers to let
managers know they have entered a Red Zone. In business, managers
have to recognize the Red Zone by looking at the critical initiatives
of their company and applying what they have learned from their
own past or the history of other companies. Business history
has shown that any one of the following intense conditions is
a Red Zone for a company:
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A merger with
another significant company…that propels both companies
ahead in the market place or bombs…leaving both companies
wishing they could re-write history |
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A major shift
in the company's competitive strategy …that quickly
moves it forward in market share or that burns a lot of
company money without producing a single percentage point
of gain |
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A significant
internal change in the way the company does business
(i.e., reengineering critical work processes, implementing
an Enterprise Resource Planning system)…resulting in important
new efficiencies for the company or confusion, disgust,
and loss of confidence |
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Significant growth
in size …resulting in efficiency gains and lowered costs
or the combination of bloated staff with decreased organizational
agility. |
Under each of these conditions there are either Great Gains
to be earned or big losses to accrue in company momentum, morale,
and resources.
The Red Zone problem is simple. Many companies enter Red Zone
conditions as a part of moving their businesses forward without
realizing that their ways of managing the business must change
significantly or their companies will experience significant
loss. Doing business with the regular rules that management
plays by will not take a company successfully through a Red
Zone.
Once inside the Red Zone, football teams shift to their Red
Zone Offense, the way they run plays to make scores happen.
In business, managers also must shift to a new level of managing.
Red Zone Management is a set of guiding principles and rules
applied in a formal and disciplined way to navigate a company
successfully through their Red Zone.
Some of the important Red Zone Management Principles include:
- Recognizing and declaring that the company is in a Red Zone
that requires special behavior and commitment from everybody
… especially key managers!
- Switching Leadership over to the "do or die" level of commitment…or
risking certain loss!
- Putting the strongest managers and employees into the thick
of Red Zone Management…it's not the time for rookies to learn
how to do business!
- Placing direct responsibility and accountability for achieving
the Great Gain on designated key managers…managers achieve
what they are individually accountable for!
- Ensuring that the needs of today's customers/owners are
met while in the Red Zone…customers and investors are king
and can't be harmed while the company is in the Red Zone!
- Meeting the special needs of workers while the company is
in the Red Zone…workers will lose heart and energy before
Gain if not given intense attention!
 Dutch Holland,
CEO of HDI, has worked as a management consultant for 30 years,
helping organizations and leaders manage and implement change
successfully. If you enjoyed this short article on Red Zone
Management, you'll love his upcoming book, Red Zone Management:
Changing the Rules for Pivotal Times, Dearborn Trade, Chicago,
October 2001. Contact Dutch at 713.877.8130.
If you have a question you would like to have addressed
in the coming months, please give us your suggestions or comments
on our guestbook.
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