Quality Management Journal Book Reviews - January 2004 - ASQ

Quality Management Journal Book Reviews - January 2004

Contents

Winning Behavior: What the Smartest, Most Successful Companies Do Differently.
Terry R. Bacon and David G. Pugh. 2003. New York: AMACOM. 352 pages.

The paradigm shift that Terry Bacon and David Pugh investigate in this book deals with behavioral differentiation (BD). They contend that BD acts like a magnet that can attract or repel customers. BD is said to be a consistency of behavior throughout the organization to support a clearly stated vision that personifies the organization’s goals. They found that while it is often linked to customer service, the concept goes well beyond simply satisfying an individual’s specific needs. The Ritz-Carlton Gold Standards, Southwest Airlines efficiency, and The Men’s Wearhouse all have commitments to five stakeholder groups: employees, customers, suppliers, communities, and shareholders.

Examples and counter-examples of the effect of BD are given in the book. Over and over the authors provide material that supports their concept that consistently doing the right thing brings results. Of course, finding the right thing to do requires a creative leadership that knows their market and the niche they are seeking to fill. In the case of The Men’s Wearhouse, George Zimmer had a vision of integrating his servant leadership values into the corporate culture. The result is that when a man walks into The Men’s Wearhouse he finds an organization ready to help him outfit himself in the best combination of clothing and accessories to meet his immediate needs.

BD can be seen as the reason for success in the life cycle of all organizations. It is what nurtured them through the fledgling days of their infancy in the market. But a new product, an improved service, or a lower cost does not sustain any organization indefinitely. A better product, comparable service, and even lower costs are always possible in time. The authors have distilled a series of lessons that they have derived from their BD organizational studies, which are illustrated in the form of tables in each chapter and summarized in the book’s final chapter. The authors quote Ghandi, “We must become the change we want to see,” to make their point of continued renewal. They also stress that a strong commitment to employee training is essential to integrating the renewal into the organization’s culture. And among other things, each employee must be empowered to do the right thing when the opportunity presents itself.

At times the authors tell readers more than they need to know about the characters in their success stories. The Ritz-Carlton, Southwest Airlines, and The Men’s Wearhouse stories have been told over and over. The authors’ investigation does not reveal anything new other than a new acronym that can be used to define their continued success. The value of the book is not the success stories but the insight that the concept of BD offers. This insight is a powerful concept that explains why many organizations excel in a sea of competition. Their work gives credence to the importance of a consistent organizational culture focused on an inspired vision. It illustrates that commitment to the vision, not the rules of the trade, fosters success.

Winning Behavior tells the stories of what the smartest, most successful companies do differently. Its development of the concept of BD as the root cause for this offers another dimension of organizational culture that is worthy of investigation.

Reviewed by James B. Kohnen
St. Mary’s College of California

Economic Value Manage-ment: Applications and Techniques.
Eleanor Bloxham. 2003. New York: John Wiley & Sons, Inc. 342 pages.

Seeking to introduce a new paradigm for business practice, Eleanor Bloxham has prepared an integrated concept she calls “economic value management.” The idea is to create an integrated approach to management that demonstrates a careful and responsible use of an organization’s money, time, and talent (stewardship), as well as its means of measuring the relative worth of the results garnered from the effort expended (value and economic). The opening chapters of the book systematically reveal the pitfalls of the existing managerial and financial measuring system. It clearly shows that while existing measuring systems can provide useful information, they must be used judiciously. Management must assure that they do not become ends in themselves that can be manipulated to reflect a predetermined outcome or ignored because the information is not relevant to the perceived issues facing the organization.

Part Two, Application and Techniques, provides insight into adapting measurement methods to the specific issues facing an organization. Three models are overlaid to achieve this objective. The first covers the constituents of an organization. It addresses five groups that must be satisfied for any organization to flourish. They are community, external governance, providers of capital, consumers, and critics and observers that revolve around the central core of the organization referred to as suppliers. In this sense suppliers are individuals who provide their time and talent to the organization as board members, managers, employees, and traditional suppliers. This extended view of the constituents of an organization broadens the boundaries of the measurement system that needs to be employed to generate meaningful information to each sector.

The second model used is called “the value management wheel.” It looks into an organization showing the primary areas where metrics can be applied. They are performance assessment, value-based strategy, process and technology, organizational structure, rewards process, and training and communications. This functional structure provides different internal perspectives to the economic value management process.

The final model consists of 14 questions that are used to determine the position of the organization and practices in terms of value. They are divided equally in evaluative and predictive categories. The critical thinking that must be employed to address these questions is profound. Working through the model will certainly be a simulating exercise and may lead to a paradigm shift to economic value management.

Unfortunately, Bloxham offers no proof that this will happen in her book. Note 2 (p.18) provides the following disclaimer.

“The organizational examples throughout this book are based on real cases. The names of the organizations, the people, and some of the other details presented, however, have been changed to respect confidentiality and make the example cleared. In addition, one organization may appear under different pseudonyms.”

The 15th question in the third element of the model should be, “Why do organizations practicing economic value management refuse to be identified?” It is a shame that this well-crafted book that has abundant citations to outside material could not provide one citation to a firm successfully using the process. Regardless of the good intentions of this description of economic value management, secret accountability systems are unacceptable.

Reviewed by James B. Kohnen
St. Mary’s College of California

Creating the Project Office: A Manager’s Guide to Leading Organizational Change.
Randall L. Englund, Robert J. Graham, and Paul C. Dinsmore. 2003. San Francisco: Jossey Bass. 307 pages.

The authors of Creating the Project Office: A Manager’s Guide to Leading Organizational Change have crafted a remarkable book combining the concepts of project management and organizational change into a very interesting volume. They effectively adapt Kurt Lewin’s concept of organizational change model to the process of introducing project management into an organization. His model consists of three phases: creating conditions for change (unfreezing), making change happen (change), and making change stick (freezing).

Their idea is to create a change in the organizational culture that integrates project management into the operational fabric of every element of its operation. The notion is that empowerment of project teams is the way to handle routine issues and problems that face any firm. Given this premise, the challenge is to coordinate, monitor, and guide these empowered teams in their pursuit of their assigned tasks. While management is ultimately responsible for this activity through a sponsorship system, they advocate that a centralized project office can best provide stewardship to the project management process.

Ample examples of the success of this process are given citing its use at ChevronTexaco, Project Development and Execution Process; HP Spain, Hewlett-Packard Consulting Organization; and the U.S. Air Force, Aviano 2000 Program Management Office. The cases are well presented and cleverly integrated into the presentation to show that centralized stewardship is critical to the success of the project management effort.

The authors discuss the three pillars of project management—cost, schedule, and quality—in terms of traps that can thwart even the best project manager. They say that overemphasis on any one of these factors can lead to the demise of the project and the idea of integrating project management into the fabric of the organization’s
culture. They recommend that these pillars be augmented with a series of success factors to support enterprise project management. The success factors are: strategic emphasis, upper-management support, project planning support, customer and end-user support, project team support, project performance support, communication and information systems support, organization support, and economic value support. They are very clear that implementation of these factors through a project office is to support not create a bureaucratic bottleneck in the organization.

The organizational management advice presented in the book is rooted in a strong theoretical base tempered by the authors’ vast experience in project management. This combination provides ample examples of successful approaches and pitfalls that one could expect to encounter in their role as a champion for project management. For example, they compare and contrast the long, steady approach (Quaker) and short, iron-handed approach (Attila the Hun) that a champion could use. Their general preference is the Quaker approach because it focuses on long-term cultural change rather than short-term superficial compliance.

Creating the Project Office: A Manager’s Guide to Leading Organizational Change is a book to be read. Its presentation of the essence of project management and organizational change is excellent.

Reviewed by James B. Kohnen
St. Mary’s College of California

The Warren Buffett CEO: Secrets from the Berkshire Hathaway Managers.
Robert P. Miles. 2003. New York: John Wiley & Sons, Inc. 412 pages.

The mystery of who will succeed Warren Buffett as the leader of the Berkshire Hathaway organization he built is explored by Robert P. Miles in this book. However, in chronicling the experiences of the current leaders in the Berkshire Hathaway organization he has created an incredible collection of stories illustrating a continued commitment to excellence. Since many of the companies were privately held prior to acquisition by Berkshire Hathaway, not much is known about them except that they are incredibly successful in the markets in which they operate.

The stories are told from the viewpoint of the current Berkshire Hathaway entities’ CEOs, who are totally committed not only to Warren Buffett, but also to their company. The structure of Berkshire Hathaway resembles a family in which everyone is expected to contribute to the well being of the group. Thus, each organization gives what it can to the group as a whole and receives the support its needs to succeed. And succeed they do.

The group is very diverse in its management and product line. One common denominator is that the current CEOs know their business and has been successful in it in their own right. They continue in their position because they genuinely like what they do and know how to do it. Generally, they were in a position of leadership when their firm attracted Warren Buffett’s attention. The reason for the initial interest is vague, although a recommendation by Berkshire Hathaway insiders goes a long way. However, in almost every case the closing issue was the commitment of the current leadership of the firm to remain in place.

Miles has done a superb job in gathering information about the key firms that make up Berkshire Hathaway. Each one has a unique story, but there is a common thread—customer satisfaction. Each business was built on a desire to provide excellent customer service with a fair market price. The net result was and is a business that consistently contributes to the Berkshire Hathaway organization. The compensation that the respective CEOs earn for their efforts is also fair, but the real reward for them is to be part of an organization that they truly enjoy.

Read the stories. Vicariously enjoy the successes of the original owners. Relish the intrigue of the moment of truth when the time for action arrived to transfer ownership to Berkshire Hathaway. And watch the development of the business when it was relieved of the burden of external financial manipulation. The mystery of who will follow Warren Buffett to lead Berkshire Hathaway into this millennium is not solved at the end of this book. Readers, like the other Berkshire Hathaway CEOs, can play the succession game so eloquently described by Robert P. Miles.

Reviewed by James B. Kohnen
St. Mary’s College of California

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