Monday, November 25, 2019
Sunday, November 24, 2019
Wednesday, November 20, 2019
Managing for Competitive Advantage (part 11)
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The Responsive Organization
by
Charles Lamson
Organizing for Environmental Response
Apart from organizing for optimal size, organizations have to adapt to external environments. In a sense, this is the crux of creating a responsive organization. There are various approaches organizations might take to respond to the environment. They included adapting to the environment, influencing the environment, and selecting a new environment. In this section, we want to delve more deeply into how organizations organize for environmental response.
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Organizing for Customer Responsiveness
The environment is composed of many different parts (government, suppliers, competitors, and the like). Perhaps no other aspect of the environment has had a more profound impact on organizing in recent years then a focus on customers. Dr Kenichi Ohmae points out that any business unit must take into account three key players: the company itself, the competition, and the customer. These components form what Ohmae a refers to as the strategic triangle, as shown in Figure 1. Managers need to balance the strategic triangle and successful organizations use their strengths to create value by meeting customer requirements better than competitors do.
FIGURE 1 The Strategic Triangle
Customer Relationship Management CRM Customer relationship management is a multifaceted process, typically mediated by a set of information technologies, that focuses on creating two-way exchanges with customers so that firms have an intimate knowledge of their needs, wants, and buying patterns. In this way, CRM helps companies understand, as well as anticipate, the needs of current and potential customers. And in that way, it is part of a business strategy for managing customers to maximize their long-term value to an enterprise.
As discussed throughout this analysis, customers want quality goods and services, low cost, innovative products, and speed. Traditional thinking considered these basic customer wants as a set of potential trade-offs. For instance, customers wanted high quality or low costs passed along in the form of low prices. But world-class companies today know that the “trade-off” mentality no longer applies. Customers want it all, and they are learning that somewhere an organization exists that will provide it all.
But if all companies seek to satisfy customers, how can a company realize a competitive advantage? World-class companies have learned that almost any advantage is temporary, for competitors will strive to catch up. Simply stated---though obviously not simply done---a company attains and retains competitive advantage by continuing to improve. This concept---kaizen, or continuous improvement---is an integral part of Japanese operations strategy. Motorola, a winner of the Malcolm Bridge National Quality Award, operates with the philosophy that “the company that is satisfied with its progress will soon find that its customers are not.”
As organizations focus on responding to customer needs, they soon find that traditional meaning of a customer expands to include “internal customers.” The word customer now refers to the next process, or wherever the work goes next. This highlights the idea of interdependence among related functions and means that all functions of the organization---not just marketing people---have to be concerned with customer satisfaction. All recipients of the person's work, whether co-worker, boss, subordinate, or external party, come to be viewed as the customer.
Total Quality Management (TQM) Total quality management is a way of managing in which everyone is committed to continuous improvement of his or her part of the operation. In business, success depends on having quality products. TQM is a comprehensive approach to improving product quality and thereby customer satisfaction. It is characterized by a strong orientation toward customers (external and internal) and has become an umbrella theme for organizing work. TQM reorients managers toward involving people across departments in improving all aspects of the business. Continuous Improvement requires integrated mechanisms that facilitate group problem-solving, information sharing, and cooperation across business functions. As a consequence, the walls that separate stages and functions of work tend to come down, and the organization operates more in a team-oriented manner.
W. Edwards Deming was one of the founders of the quality management movement. His "14 points" of quality emphasized a holistic approach to management that demands intimate understanding of the process---the delicate interaction of materials, machines, and people that determine productivity, quality, and competitive advantage:
 *SOURCE: MANAGEMENT: THE NEW COMPETITIVE LANDSCAPE, 6TH ED., 2004, THOMAS S. BATEMAN & SCOTT A. SNELL, PGS. 279-280*
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Saturday, November 16, 2019
Managing for Competitive Advantage (part 10)
New Ventures (part D)
by
Charles Lamson
Intrapreneurship
Today's large corporations are more than passive bystanders in the entrepreneurial explosion. Even established companies try to find and pursue new and profitable ideas---and they need intrapreneurs to do so. If you work in a company, and are considering preparing a new business venture, table one can help you decide whether the new idea is worth pursuing.
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TABLE 1 Checklist for Choosing Ideas
Building Support for Your Idea
A manager who has a new idea to capitalize on a market opportunity will need to get others in the organization to buy in or sign on. In other words, you need to build a network of allies who support and will help implement the idea.
If you need to build support for a project idea, the first step involves clearing the investment with your immediate boss or boss's. At this stage, you explain the idea and seek approval to look for wider support.
Higher executives often want evidence that the project is backed by your peers before committing to it. This involves making cheerleaders---people who will support the manager before formal approval from higher levels. Some managers refer to this strategy as "loading the gun"---lining up ammunition in support of your idea.
Next, horse trading begins. You can offer Promises of payoffs from the project in return for support, time, money, and other resources that peers and others contribute.
Finally, you should get the blessing of relevant higher-level officials. This usually involves a formal presentation. You will need to guarantee the project's technical and political feasibility. Higher management endorsement of the project and promises of resources help convert potential supporters into an enthusiastic team. At this point, you can go back to your boss and make specific plans for going ahead with the project.
Along the way, expect resistance and frustration and use passion and persistence, as well as business logic, to persuade others to get on board.
Building Intrapreneurship
Two common approaches used to stimulate intrapreneurial activity are skunkworks and bootlegging. Skunkworks are project teams designed to produce a new product. A team is formed with a specific goal within a specified time frame. A respected person is chosen to be manager of the Skunkworks. In this approach to corporate innovation, risk takers are not punished for taking risks and failing---their former jobs are held for them. The risk takers also have the opportunity to earn large rewards.
Bootlegging refers to informal efforts by managers and employees to create new products and new processes. "Informal" can mean "secretive," such as when a bootlegger believes the company will frown on those activities. But the intrapreneurial organization should tolerate and even encourage bootlegging.
Organizing New Corporate Ventures
For large-scale innovation, strategic alliances---cooperation among different organizations---can be a useful route.
Hazards in Intrapreneurship
Organizations that encourage intrapreneurship face an obvious risk: the effort can fail. One author noted, “There is considerable history of internal venture development by large firms, and it does not encourage optimism. However, this risk can be managed. In fact, failing to foster intrapreneurship may represent a subtler but greater risk then encouraging it. The organization that resists intrapreneurial initiative may lose its ability to adapt when conditions dictate change.
The most dangerous risk in intrapreneurship is the risk of over-reliance on a single project. Many companies fail while awaiting the completion of one large, innovative project. The successful intrapreneurial organization avoids over-commitment to a single product and relies on its entrepreneurial spirit to produce at least one winner from among several projects.
Organizations also court failure when they spread their intrapreneurial efforts over too many projects. If there are many intrapersonal projects, each effort may be too small in scale. Managers will consider the project unattractive because of their small size. Or, those recruited to manage the projects may have difficulty building power and status within the organization.
The hazards in intrapreneurship, then, are related to scale. One large project is a threat, as are too many underfunded projects. But a carefully managed approach to this strategically important process will upgrade an organizations chances for long-term survival and success.
Entrepreneurial Orientation
In an earlier post, the characteristics of individual entrepreneurs were described. Now we do the same for companies we describe how companies: We describe how companies that are highly entrepreneurial differ from those that are not.
Entrepreneurial Orientation is the tendency of an organization to engage in activities designed to identify and capitalize successfully on opportunities to launch new ventures by entering new or established markets with new or existing goods or services. Entrepreneurial orientation is determined by five tendencies: to allow independent action, innovative, take risks, be proactive, and be completely aggressive.
To allow independent action is to grant to individuals and teams the freedom to exercise their creativity, champion promising ideas, and carry them through to completion. Innovativeness requires the firm to support new ideas, experimentation, and the creative processes that can lead to new products or processes; it requires a willingness to depart from existing practices and venture beyond the status quo. Risk-taking comes from a willingness to commit significant resources, and perhaps borrow heavily, to venture into the unknown. The tendency to take risks can be assessed by considering whether people are bold or cautious, whether they require high levels of certainty before taking or allowing action, and whether they tend to follow tried and true. paths.
To be proactive is to act in anticipation of future problems and opportunities. A proactive firm shapes the environment and changes the competitive landscape; other firms merely react. Proactive firms are forward-thinking and fast to act, and are leaders rather than followers. Similarly, some individuals are more likely to be proactive, to shape and create their own environments, than others who more passively cope with the situations in which they find themselves. Proactive firms encourage and allow individuals and teams to be proactive.
Finally, competitive aggressiveness is the tendency of the firm to challenge competitors directly and intensely in order to achieve entry or improve its position. In other words, it is a competitive tendency to outperform ones rivals in the marketplace. This might take the form of striking fast to beat competitors to the punch, to tackle them head-to-head, and to analyze and target competitors weaknesses.
What makes a firm "entrepreneurial" is its engagement in an effective combination of independent action, innovativeness, risk-taking, proactiveness, and competitive aggressiveness. The relationship between these factors and the performance of the firm is a complicated one that depends on many things. Nevertheless you can imagine how the opposite profile---too many constraints on action, business as usual, extreme caution, passivity, and a lack of competitive fire will undermine entrepreneurial activities. And without entrepreneurship, how would firms survive and thrive in a constantly changing competitive environment?
*SOURCE: MANAGEMENT: THE NEW COMPETITIVE LANDSCAPE, 6TH ED., 2004, THOMAS S. BATEMAN, SCOTT A. SNELL, PGS. 228-231*
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Friday, November 15, 2019
3D Printer Produces Synthetic "Tissue"
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Droplet network that self-folded
into hollow ball c.400 microns across
(credit: Oxford University / G Villar)
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Thursday, November 14, 2019
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