The business boiled frog phenomenon

 

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Rely unit 1 mgt680/ Repost

 

Subject Line Must Read: Interactive 1: Critique the work of one student.

• Did the author explain the business boiled frog phenomenon case in a manner that you agree or disagree with?

• Are there unanswered questions?

• Can you add to the posts with more value added information?

 The interactive posts should be substantive in nature and highlight mastery of the concepts and your professional strategic business skills. Apply your knowledge. Do not simply state that it is a good or bad idea, specify why and be detailed in your explanation.

1 response 75 words / Critique

2 response 75 words / Critique

3 response 75 words / Critique

Apa format 

250 words

#1 post

MGT680

 

DB#1

 

Donna Rothmann-Ranels

 

American Intercontinental University

 

March 24, 2014

 

                The “boiled frog” phenomenon is a metaphor for thinking and relating to society and as a business strategy.  The phenomenon suggests that if you put a frog into a pot of boiling water it will instinctively jump to try to get out of the water.  But if you put a frog in a pot of warm water and gradually turn up the heat the frog will stay in the water not realizing the danger it is in.  This example relates to business because some people tend to stay in a bad situation as long as possible not realizing the danger the company is in (Sheen, n.d.).

 

                The “boiled frog” phenomenon relates to strategic management because a strategic plan should be monitored and evaluated throughout the life of the plan.  Continuing to do what you have always done will not help your business grow and thrive.  If you do not monitor you plan you will not know what is working and what is not.  This phenomenon applies to a business that is resistant to change.  A company that stays in a situation because they don’t realize there is a threat.  Companies like to stay in their comfort zone but that may not be the best idea for the business.  Monitoring the strategic plan will let a company know if there are changes taking place that need to be addressed before the situation gets out of hand.

 

                A case of a company that was a “boiled frog” was Kodak.  Kodak unsuccessfully translated changes in the marketplace; they did not modernize the products they offered or adjust to new markets or products.  This caused them to have a critical failure.  Kodak was founded in 1880.  At that time they were considered to be a technological marvel.  They had complete dominance in the market.  In the mid 1970’s 90% of the film that was sold was by Kodak and 85% of the cameras that were sold were by Kodak (DMW strategic consulting, n.d.).  Kodak was considered one of the world’s top five most valuable brands until the 1990’s.  The first digital camera was made in the 1970’s by Kodak but they did not understand how this technology would work for them.  Digital technology has eradicated the need for film.  And smartphones are used now instead of cameras.  Kodak had a great thing going, selling expensive film and cheap cameras.  Kodak did not position themselves as a partner for smartphones.  Kodak’s competitor Fuji did not get quashed because they found new areas to make money in.  Kodak should have seen the changes coming and found new products to diversify into.

 

                                A company should always look to see how they can make their products better to fit the needs of their customers.  Also companies should be able to rethink their strategy if it is not working.  A good organization is concerned with their customers and their employees.  Management should be able to motivate their employees to do their best and to be creative with their ideas.

 

References

 

DMV Strategic consulting. (n.d.).  Retrieved on March 24, 2014 from

 

http://moseleywilliams.com/kodak-boils-with-the-frog/

 

Sheen, D. (n.d.).  The boiling frog.  Retrieved on March 24, 2014 from

 

                http://www.davidsheen.com/b/b2.htm

#2 post

The “Boiled Frog” Phenomenon

 

 

 

 

 

Jessica Galusha

 

 

 

MGT680-1402C-01:  Strategic Management

 

 

 

Unit 1 Discussion Board

 

 

 

March 24, 2014

 

 

 

The “Boiled Frog” Phenomenon

 

 

 

            More than 20 years ago, Peter Senge penned the parable of the boiled frog (Watters, 2012).  As the parable goes, if you place a frog into boiling water it will escape the danger of being boiled.  However, if the conditions are right in the beginning and the frog is in the water, the heat can be turned up gradually and the frog will stay in the water until it is boiled.  The morale of the story is that we are more apt to react to abrupt changes than to slow ones (Watters, 2012).

 

 

 

What Is the “Boiled Frog” Phenomenon?

 

 

 

            In terms of business, the point of this tale is that leaders should be paying attention to all changes, big, small, sudden, and gradual; or, the success of the organization will hang in the balance.  Businesses that suffer from the boiled frog phenomenon are not focusing enough on their ever changing environments.  Businesses are up against a slowly, but constantly, changing environment and they have to work more diligently to take advantage of growth opportunities (Cardwell, 2009).

 

 

 

How Does the “Boiled Frog” Phenomenon Apply To Business, Specifically Strategic Management?

 

 

 

            In terms of business, leaders need to keep their eyes and ears wide open so that they are well aware of all changes that are occurring.  In terms of strategic management, the business must be ready to handle these changes as they are occurring.  Business leaders need to embrace the concept of continuous improvement.  Even minor operational changes can signify the differentiation between the success and failure of the firm (Cardwell, 2009).

 

 

 

Business Example of the “Boiled Frog” Phenomenon

 

 

 

            A company that is currently experiencing the harsh reality of the boiled frog phenomenon is Target.  We all know about the security breech, so I will not go into much detail on this.  However, it is what happened, or did not happen behind the scenes that makes this a perfect boiled frog scenario.

 

 

 

            So, the hackers installed malware on Target’s security payment system.  Once installed, as credit cards were swiped, the card numbers and customer information would be stored on Target’s own server, which was now being managed by the hackers (Riley, Elgin, Lawrence, & Matlack, 2014).  Not a sophisticated scheme, by any means.  What’s worse is that Target had, six months before the hack, installed $1.6 million in malware detection tools (Riley, Elgin, Lawrence, & Matlack, 2014).  The new software was installed to flag any suspicious activity and the call center would call Target’s security operations center with its observations.

 

 

 

            Here’s how it went.  On Saturday, November 30, the hackers had completed their malware scheme, but had to plan to get the information from their U.S. holing points, in Target’s very own systems, to their base in Russia.  This suspicious activity was noticed by the antimalware company in Bangalore, this company called Target’s security team, as planned (Riley, Elgin, Lawrence, & Matlack, 2014).  This happened before the information left Target’s system.  However, nothing happened!

 

 

 

            The company ignored the signs that something was happening and did nothing. The loss being realized is detrimental to its success.  The very reputation of the organization, $61 million in costs related to the breech, and a sharp drop in profits of 46% from the previous year all lost.  What had not been reported as the breech was publicized is that once Target went back through computer logs, the alerts sent from Bangalore dated November 30 and December 2, 2013, which if not disregarded, could have avoided the whole situation (Riley, Elgin, Lawrence, & Matlack, 2014).

 

 

 

How This Business Could Have Avoided the Effects of the “Boiled Frog” Phenomenon

 

 

 

            Rather than ignoring the signs, the very system that it spent $1.6 million on, Target could have seen the sign that this hack was in progress.  Management could have strategized to save the stolen information, before it left Target’s information system.  If management had not turned a deaf ear to the situation, the integrity of the firm would not have wavered.  If management had not thought that by purchasing the increased security for FireEye, the firm in Bangalore, it was invincible, it could have strategized a method to avoid the breech, or any other potential threat.  Now, consumer confidence is shaken, if not nearly completely lost.

 

 

 

            Excellence in operations and superiority in leadership is a continuous process (Cardwell, 2009).  As we can see, it does not stop with the purchasing of a sophisticated security system.  Without proper implementation and continuous monitoring, no strategy will be able to last.  If a business wants to avoid being a boiled frog, gradually giving in without even realizing it, continuous improvement should become a part of its strategy (Cardwell, 2009).  It is not enough on its own to say here is a winning strategy.  The strategy will need to be manipulated as conditions change.  It is the difference of obtaining and keeping a competitive advantage.

 

 

 

References

 

 

 

Cardwell, J. (2009). How to avoid boiled frog syndrome and get ahead. Credit Union Journal, 13(41), p8. Retrieved from http://www.cujournal.com/

 

 

 

Riley, M., Elgin, B., Lawrence, D., and Matlack, C. (2014, March). Missed alarms and 40 million stolen credit card numbers: How Target blew it. Bloomberg Businessweek. Retrieved from http://www.businessweek.com

 

 

 

Watters, J. (2012, May 14). The parable of the boiled frog. [Web log message]. Retrieved from http://livingleadershipeveryday.wordpress.com/2012/05/14/the-parable-of-the-boiled-frog/

 

#3 post

Re:Unit1 – The “Boiled Frog” Phenomenon Main Post

 

What is the “boiled frog” phenomenon?

 

 

 

     The parable of the boiled frog was introduced by Peter Senge in 1990 (Senge, 1990). Senge (1990) explained that the frog’s internal survival mechanism was geared to sudden change so that if placed in a boiling pot of water it would immediately jump out. But, if the frog was placed in a pot of lukewarm water and the temperature was turned up and the water gradually heated the frog would die before it realized the water was too hot to survive (Senge, 1990).   Senge (1990) used this parable at the time to compare it to the American automakers ignoring the increase in competition from the Japanese from 4 percent market share in the early 1960’s to over 40 percent by the mid 1980’s, and they had not adapted to the strengths exhibited by the Japanese.

 

 

 

How does it apply to business, particularly strategic management?

 

 

 

     There are other realistic examples today. One is global warming, not a company but a status of the world. There have been many global threats like the bird flu epidemic, which was an immediate crisis with viable solutions, not necessarily comparable to global warming since it was immediate and there was a response to put into action (McGuinness, 2006). McGuinness (2006) used the parable to compare how global warming seems to be affecting her home country of New Zealand and shows with charted evidence that this is headed in a perilous direction, yet there seems to be no sense of urgency, the frog is in the water and not aware of the changes taking place in its environment. While this may seem not to be a business scenario the fact is that businesses are generally the cause of global warming and it will be up to businesses to make the decisions to control how they affect the environment. Another analogy is the perception that the majority of people have about technology, the fact is things are happening extremely fast yet the average person takes these changes for granted (“Boiled Frogs,” 2005). Using these analogies leads to how businesses often, as the case of the American automakers, are not aware of the changes going on around them and fail to be proactive, rather are reactive, in these cases was their use of strategic management effective or not?  The question would be if these businesses are proactive, (the planning and formulating stage, and then implementing), then they do not need to worry about the temperature of the water? If the businesses are reactive and do not respond fast enough to the temperature of the water, or the change in their business environment, then they will no longer exist or at best, struggle. Nokia will be examined as a company that was a victim of the boiled frog scenario.

 

 

 

Nokia, an example of the “boiled frog” phenomenon

 

 

 

     In the early 1990’s Nokia came up with revolutionary concepts for the smartphone including touchscreen and color monitor and included features finding locations, playing games, and placing orders online (Condliffe, 2012). At that time the management of Nokia decided that this was not the direction that smartphones were going to take so switched their emphasis back to the basic smartphone in the mid 2000’s just as the Apple iPhone hit the market (Condliffe, 2012). Nokia introduced the first smartphone in 1996, it could surf the web and read emails and fax (F., 2012). In hindsight Nokia had developed what Apple was about to develop yet never brought it to market, or as the former chief designer put it “We had it nailed” (F., 2012, p. 1). Even with that blunder Nokia became the largest smartphone provider and even with the success of the iPhone market share was over 40 percent in 2007, going to 21 percent in 2012 (F., 2012). Of the five steps in project management, the third step after conception and planning is launching or executing the plan (“Execution,” 2014).  In strategic management this is the second phase after strategy formulation, the strategy implementation (David, 2013). This is the step that Nokia failed to implement, as the surrounding landscape was changing, and to make it worse they already had the technology, management decided to take the company in another direction not realizing they were spot on in what they were doing.

 

 

 

What could Nokia have done to avoid this?

 

 

 

    This seems to be a classic example of the boiled frog parable; Nokia had what it took to be a leader, had spent forty billion dollars to get it (F., 2012), and never pulled the trigger to make it happen. They sat in the water and watched other companies, especially Apple take over this segment of the industry. Nokia has now aligned itself with Microsoft and the Windows Phone, which only time will tell what will happen since the history of Microsoft and smartphones has not been kind, they have struggled (Ahonen, 2013). Nokia had everything they needed to be the most successful smartphone provider, all they had to do was look at the basic steps of strategic management and say ‘Let’s implement this’, and they did not.

 

 

References

 

5 basic phases of project management. (2014). Retrieved from http://www.projectinsight.net/project-management-basics/basic-project-management-phases.aspx

 

Ahonen, T. T. (2013, January 7). The seven biggest collapses in mobile or smartphone history- this is part 3 in the Nokia disaster analysis series [Blog comment]. Retrieved from http://communities-dominate.blogs.com/brands/2013/01/the-seven-biggest-collapses-in-mobile-handset-or-smartphone-history-this-is-part-3-in-the-nokia-disa.html

 

Condliffe, J. (2012). How Nokia lost the smartphone race a decade ago. Retrieved from http://gizmodo.com/5927280/how-nokia-lost-the-smartphone-race-a-decade-ago

 

David, F. R. (2013). Strategic management concepts and cases: a competitive advantage approach (14th ed.). Retrieved from http://wow.coursesmart.com/9781256694489/firstsection#X2ludGVybmFsX0J2ZGVwRmxhc2hSZWFkZXI/eG1saWQ9OTc4MTI1NjY5NDQ4OS9pdg==

 

F., A. (2012). Nokia missed the boat with early prototypes that hinted at the Apple iPhone and Apple iPad. Retrieved from http://www.phonearena.com/news/Nokia-missed-the-boat-with-early-prototypes-that-hinted-at-the-Apple-iPhone-and-Apple-iPad_id32425

 

McGuinness, W. (2006). The parable of the boiled frog. Chartered Accountants Journal, 85(4), 71-74. Retrieved from http://eds.a.ebscohost.com.proxy.cecybrary.com/ehost/detail?sid=6d96f209-9829-47ce-8822-78f927526720%40sessionmgr4004&vid=21&hid=4105&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=21361183

 

“Most of us are boiled frogs”. (2005). Across the Board, 42(4), 13-14. Retrieved from http://eds.a.ebscohost.com.proxy.cecybrary.com/ehost/detail?sid=6d96f209-9829-47ce-8822-78f927526720%40sessionmgr4004&vid=30&hid=4105&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=buh&AN=17725822

 

 

 

Senge, P. M. (1990). The fifth discipline: The art & practice of the learning organization. Retrieved from http://books.google.com/books?id=b0XHUvs_iBkC&pg=PA22&lpg=PA22&dq=senge+the+fifth+discipline+boiling+frog&source=bl&ots=MRItNYaGnY&sig=RgbmwIrpdCp4kMphf0ftLI8ptB8&hl=en&sa=X&ei=nUAvU4yAPMWPqwHc-oDQCw&ved=0CFEQ6AEwBA#v=onepage&q=senge%20the%20fifth%20discipline%20boiling%20frog&f=false

 

 

 

 

 

 

 

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