Excerpts from U.S. BUSINESS REVIEW, October, 2005
"We face change as a thinking, learning organization..."
Change and innovation
are the touchstones of entrepreneurial enterprises, while fads are primarily practiced in large corporations. Smaller companies tend to take a more realistic, hands-on approach to creating market share.
Their leaders believe in the "cause" as defined by the company's products or services and incite others to assimilate the vision and establish long-term, organizationally directed goals. Management stresses a positive, challenging, yet supportive work environment that fosters healthy cooperation rather than destructive competition.
To survive in a world of constant flux, organizations need a structure that incorporates and accepts change as its basic premise - change not in the form of ever-passing fads, but long-term transformation for continued growth, expansion into new domestic or international markets and adaptation to new market realities.
This type of true transformation requires total commitment, and often, drastic surgery. The pain it may cause cannot be relieved with the band-aid of a fad.
As Scott Adams says in The Dilbert Principle: A Cubicle's-Eye View of Bosses, Meetings, Management Fads & Other Workplace Afflictions: "Re-engineering a company is a bit like performing an appendectomy on yourself. It hurts quite a bit, you might not know exactly how to do it, and there's a good chance you won't survive it. But if it does work, you'll gain enough confidence to go after some of the more vital organs, such as that big red pumping thing."
A case study demonstrates the application of a new business model—not in the manner of a passing fad, but to achieve a complete transformation of the company. DSC Logistics, Des Plaines, Ill., was founded in the 1960s by Jim McIlrath under the name Dry Storage Corp. When his daughter, Ann Drake, became the company's CEO in the early 1990s, she proceeded to transform the company from a 1960s warehousing business to a 21st-century logistics enterprise, based on the "sense-and-respond" business model formulated by Stephan H. Haeckel, director of strategic studies at IBM's Advanced Business Institute.
In his book, Adaptive Enterprise: Creating and Leading Sense-and-Respond Organizations, Haeckel argues that in today's marketplace, businesses can't expect to thrive just by making products and selling them. Rather, companies must adapt to customers, even before they themselves know what they want. Haeckel's book lays out a sense-and-respond strategy to allow companies to move quickly and change.
"Our business model is dramatically different from the times in which Dry Storage Corp. was started," Drake says. "Rather than fighting change, we embrace it with sense-and-respond. We face change as a thinking, learning organization, ready to redesign, rearrange and redistribute our resources to help our customers take best advantage of the current environment." Under Drake's leadership, the company's transformation included the following changes:
New, consistent procedures that permitted faster turnaround and more accurate information for better decision-making
A new leadership selection, training and development process that prepares the company for tomorrow's opportunities - In hiring, DSC looks for people who are flexible intellectually and personally innovative and creative.
Company-wide consistency using process management
A customer-care process that helps the company adapt processes and relationships throughout the customer's lifecycle—Breaking the old territorial rules, Drake appointed a customer manager to work across geographical divisions.
Vigorous upgrade and expansion of systems, technology and physical infrastructure to provide customers with a strong network of capabilities
A new mission, vision, set of values and promise to guide the new challenges
Drake is a passionate change-agent who likes to inspire. She wants to see her people embrace change and translate it into what it means to them, so they can focus their strengths and better assist customers. She believes in a "thinking and learning" organization and practices an open management style that keeps adapting to the changing environment.
Drake's employees enjoy working at DSC because their views count; they know that leadership cares about the company and about them. Having a stake in the company, they deploy resources quickly to make things happen.
"Logistics is one of the fastest-moving, fastest-changing industries in America today," Drake explains. "In a world of continual change, our sense-and-respond business model equips us to track or anticipate even subtle changes in customers' business environments. And then, it puts priority on responding instantly, fluidly and accurately to those needs."
To Innovate Or Not?
Other countries don't practice the latest American theories. Japan and China, for instance, are progressive while doing business in the old-fashioned way, without buzzwords and fads. Shouldn't these other countries then be far ahead of the United States because they don't waste their time on fads? Yet, the U.S. economy is the most successful in the world. Does it not follow, then, that American companies are doing the right thing, including fads?
In reality, what makes the U.S. economy so strong are innovation and action; not ever-changing management theories, but rather, the new products and services that take the world by storm. Customers don't care about the theories buzzing in the boardroom or the seminars leaders have taken. They only care about products and services that improve their quality of life.
Success in the marketplace is not about new theories, but about differentiating the company through innovative and creative offerings. When it comes to leadership and management, stick to common sense and sound principles and strategies, no matter how old they may be.
© Copyright The Journal of Commerce November 2005.
William Cassidy. All rights reserved
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