What was surprising to me about the resignation of Quebecor’s CEO and the company’s lowered guidance is that the painful condition of the magazine and catalog business is so plainly evident in widely available industry, government, and other data. Was someone asleep at the wheel? Was someone in denial? Of all the players in the market, Quebecor certainly should have had an inside track on these trends. After all, they’re prepping leading consumer and business magazines weeks before the Publishers Information Bureau would be counting up the ad pages and issuing their reports. So they would know things well before others. Thus it was strange that they would blame market conditions in a way that indicated they were caught off-guard.
It is essential to have internal detection systems that deliver a reliable pulse on the market, with crisp, unshakable, facts. When executives get association, government or other data, it should never be the first time that they are learning about market conditions. It should validate what is already known or at least suspected.
Much has been written about corporate executives who are skilled at turnarounds, but I have always been more in awe of executives who navigate their businesses so that they never have to be turned around in the first place. Let’s hope that Quebecor has recognized these issues soon enough and has acted wisely.
I don’t know if Quebecor management was asleep, in denial, ineffective, or all of the above (yes, there are companies that do hit this trifecta of incompetence). We’ll see how the Quebecor drama ultimately plays out, since an effective analysis can only be accomplished with the distance of time. But it brings to mind a book -- “Good to Great,” which I highly recommend -- and a section called “Facts are Better than Dreams.” It contains this statement: “You absolutely cannot make a series of good decisions without first confronting the brutal facts.” This leads the authors to a discussion of the “Stockdale Paradox,” named after Admiral Jim Stockdale (remember Perot’s running mate in 1992?), who spent eight years as a POW in Vietnam. He got his men through their ordeal by getting them to hold two supposedly contradictory thoughts in mind:
1) Retain faith that you will prevail in the end, regardless of the difficulties.
2) Confront the most brutal facts of your current reality, whatever they might be.
If that doesn’t describe the job of management in tough times, I don’t know what does.
The full column can be found here.