The Last Days of the Giants.
Robert Baldock. 2000. New York: John Wiley & Sons. 239 pages.
Reviewed by William J. Kohnen University of Phoenix
In The Last Days of the Giants, author Robert Baldock discusses how the economics and politics of business throughout the twentieth century have favored the growth of large corporations and how dramatic changes in the industrial environment in the next century will undermine the competitive advantage of large corporations. Baldock suggests that the keys that drove the growth of large corporations were primarily related to the development of assembly line techniques, which enabled lower unit cost production based on economies of scale. Also, once companies’ large, key stakeholders–including governments, financial markets, managers, and workers–all had interests served by continued growth. Growth, Baldock points out, can be achieved by three mechanisms, “build, buy, or ally,” with many firms opting for buy or ally because to build is slow and difficult.
As the heart of this book discusses very well, the development of five forces has led to the most competitive environment in the history of commerce, which is threatening to make dinosaurs out of unresponsive large corporations. These five forces are
- The arrival of new Internet-based firms that are more agile and innovative than the giants
- A shift in power from the seller to the buyer
- Changing government attitudes toward the giants
- Industry convergence
- Short-term focus
The solution for big corporations involves radically altering: the nature of what is offered to customers, the relationship with customers, and the level of virtualisation a firm adopts. These solutions are areas in which quality professionals can and should be key players. Specifically, understanding customer requirements and developing, maintaining, and improving the processes that meet those requirements are basic tenets of quality. Furthermore, the idea of creating a more virtual organization calls for carefully developing process requirements, evaluating potential outside product and/or service providers, and monitoring and improving the delivery of an organization’s virtual elements. All these things quality professionals are trained for and currently do to varying degrees in all organizations. Finally, aside from providing insight into how quality can assist large corporations in making required changes to remain competitive, The Last Days of the Giants provides good benchmark information for those working within a large corporation to assess the organization’s potential for success and how that will affect an individual’s career goals.
Success Through Quality: Support Guide for the Journey to Continuous Improvement.
Timothy J. Clark. 1999. Milwaukee: ASQ Quality Press. 126 pages.
Timothy J. Clark’s stated intent for writing Success Through Quality: Support Guide for the Journey to Continuous Improvement is “To provide the reader with a basic awareness and comprehensive overview of the quality improvement theory, methods, and basic tools” (p. xii). To this end the book provides a collection of the concepts embodied by the total quality movement coupled with a traditional presentation of the use of the control chart techniques developed in 1920 by Walter Shewhart of Bell Telephone Laboratories. While the book does not offer anything new it does do a nice job of collecting the continuous improvement concepts in a single source and documenting the source for most of them.
Clark uses quotes loosely to support the positions he purports throughout the book. His discussion of theory is supported by a remark attributed to Albert Einstein. The Clark theory of quality revolves around the concept that everyone is born with a special purpose in life and that each person is provided with the ability and talents needed to achieve this purpose. Somehow this special purpose translates into free will, which gives an individual the ability to participate in the Clark model of continuous improvement, which is expressed as the ABCs of quality. The ABC model is similar to a closed loop control system except that the input consists of (A) people (ideas), plus (B) choices consisting of paradigms (beliefs) plus process (actions), which result in the (C) output, which is controlled by reducing variation from the ideal. This notion is superimposed on Shewhart’s plan-do-check/study-act cycle, which the author calls the “Ultimate Success Formula” following the modification suggested by Anthony Robbins.
The people element of this ultimate success formula is further explained by a brief discussion of Maslow’s and Herzberg’s theories of the hierarchy of needs. Maslow’s theory is unsubstantiated; however, Clark found a confirmation of Herzberg’s theory that he attributed to a national survey conducted by the Gallup Organization consisting of 803 respondents published in Inc. Magazine (May 21, 1996, p. 66). His section on the paradigms could have been attributed to Juran’s A History of Managing for Quality but wasn’t; rather, it was drawn from the writings of Shewhart; David A. Hounsell, From the American System of Mass Production, 1800-1932; and Lloyd Dobyn’s interpretation of history chronicled in the Deming Library Film series. Clark concludes his discussion of paradigms with a description of the cost of quality concept, which embodies the ideas of continuous improvement and customer satisfaction.
The remaining chapters of the book deal with the concept of variation and the mechanisms to control it. Clark’s definition of variation states that it represents a factual difference between the ideal outcomes in a perfect world versus the actual outcomes (p. 48). He further defines variation by differentiating it into common variation derived from points that fall within control limits and special variation derived from points that fall outside control limits. Of course, this sets up the framework for the final section of the book, which consists of a review of the traditional tools of quality.
The book closes with a section comparing management and leadership, which combines business and military perspectives. This is informative. In final analysis, “informative” is a good description of the entire book.
The Biology of Business: Decoding the Natural Laws of Enterprise.
John Henry Clippinger III, ed. 1999. San Francisco: Jossey-Bass. 287 pages.
The Biology of Business: Decoding the Natural Laws of Enterprise is an anthology that deals with complex adaptive systems (CAS) using biological metaphors. John Henry Clippinger 3 provides the purpose of the book in the opening chapter, in which he states that it is intended to provide a new definition of what it means to manage, based on the application of principles and insights taken from the science of CAS. The contributors to the book argue that control cannot be imposed by managers, rather it emerges if managers create the right conditions and incentives for it to do so. The thing that managers seek to encourage in the evolution of this concept is the sweet spot–which is on the edge of chaos as a system emerges on its way to order. It is at this elusive spot that an organization is most creative and responsive to its environment.
The CAS concept is defined by seven basics of self-organization that include four properties–aggregation, nonlinearity, flows, and diversity–and three mechanisms–tagging, internal models, and building blocks. Clippinger says that the properties identify the key formative characteristics of any self-organizing system. They identify those things that managers should look for, work on, and influence. The mechanisms are the things managers can use to initiate sustainable self-organizing processes to achieve specific organizational and strategic goals (pp. 10-11).
Clippinger authors the chapter specifically discussing tagging, and is joined by eight other loosely associated individuals to discuss their views of the properties and mechanisms of the concept. Andy Clark, professor of philosophy at Washington University in St. Louis, offers an excellent article entitled “Leadership and Influence.” He uses various biological metaphors to illustrate the property of aggregation proposed by Clippinger, which Clark expands to include scaffolding, self-organization, and soft assembly. He cites the symbiotic organization form in pharmaceutical companies such as Glaxo, Roche, and Ciba-Geigy to develop experimental drugs using smaller biotech firms, which can work with each other, and academic institutions (p. 57). The idea is that management should aim to create conditions that will allow the business to self-organize in response to the prevailing business environment and marketing opportunities.
“Adaptive Operations” written by William G. Macready and Christopher Meyer reviews the concept of self-organization. The chapter summarizes the evolution of industrial-era practices in managing operation, then describes some of the new methods that are being explored to cope with the rapidly changing information economy (p. 182). The historic development of management theory is described as three waves characterized by scientific management, operational management, and adaptive operations. Several examples of adaptive operations are given in which a solution to a problem is generated by successive mutations of possible solutions, which is not necessarily optimum, but does work. Just as the elements of nature continuously arrange themselves to adapt to their environment, operational plans can be made to evolve with the use of computer-driven iteration into solutions that fit the operating environment at the moment. Since the evolution can go both backward and forward, it is not the same as the forward movement espoused by the continuous improvement element of total quality management.
The remaining contributions are equally as informative and thought-provoking as the three reviewed here. Each chapter is well written with the theoretical and applied concepts supported by complete references.
The Book of Management Wisdom: Classic Writings by Legendary Managers.
Peter Krass. 2000. New York: John Wiley & Sons. 492 pages.
Reviewed by William J. Kohnen University of Phoenix
The Book of Management Wisdom: Classic Writings by Legendary Managers provides advice directly from more than 50 of the most successful business managers of all time. By bringing together the essays and speeches of the world’s greatest business managers, past and present, editor Peter Krass gives readers access to management tips, ideas, and secrets directly from the experts. Among the essays are selections from Robert Galvin of Motorola, Jack Welch of GE, Michael Dell of Dell Computers, as well as some of the greatest managers of the past including, Henry Ford, Alexander Graham Bell, and Alfred P. Sloan. Prior to each essay or speech is excellent information about the manager, his or her accomplishments, and the traits that led to his or her success.
What really distinguishes this book as one that current managers at all levels would want to keep within arm’s reach is the way that the editor neatly organized the information into eight compelling sections covering universal day-to-day management concerns. These eight sections are
- The essential qualities of great managers
- Productivity, empowerment, and conflict management
- Hiring, firing, and day-to-day management
- The power of technology
- Lessons from around the world
- Evolution of the organization
- Bashing bureaucracy
- Reengineering and transformation
Of course no single manager is perfect to the extent that his or her approach fits all situations. Nevertheless even if some ideas presented do not provide answers to today’s challenges, at the very least each essay or speech provides excellent background as to the key influences as to why and how managers operate as they have in the past. This is yet another reason to keep this book at hand.
Other potential readers of this book would be those considering getting an MBA, particularly if their background is technical in nature. The names and subjects addressed in this book are at the core of most MBA program curricula.
Quick Response: Managing the Supply Chain.
Bob Lowson, Russell King, and Allan Hunter. 1999. New York: John Wiley & Sons. 281 pages.
Quick Response provides a detailed look at consumers’ demands for immediate gratification of their individual and unique needs. The challenge of business is to be able to respond to these needs through a flexible supply chain that does not rely solely on inventory to satisfy the market it serves. The authors’ experience with the quick response concept has been nurtured in the textile and apparel business, which must be responsive to fashion, seasonal trends, and fads that modify the market both in predictable and unpredictable ways. The authors do not claim that quick response is a universal panacea that is adaptable to every industry; however, they do purport that the application of the theory has potential to make a significant impact on the way businesses respond to their customers’ demands for goods and services.
The book itself provides an academic view to the philosophy of quick response based on documented observations, models, and cases studies to illustrate its application. The authors provide an excellent tutorial introduction to the discipline in the first part of their book. In three chapters the history, nuances, and complementary management theories of quick response are examined to put the concept in perspective. In terms of quality, the authors maintain that it is a vital ingredient of the quick response concept (p. 66). They relate the tenets of total quality management, customer satisfaction, and continuous improvement to the process. Beyond these basic concepts they allude to the necessity of having a comprehensive quality system in place to focus on having everyone doing the right thing at the right time from design to delivery.
The second part of the book presents some ideas on how quick response manifests itself within an organization. From a quality perspective the authors say that it requires the highest standards of product quality at all stages of the supply chain. This is necessary to accommodate the significant reductions in safety stocks, and certification of standard time needs, to make the system very responsive to customer demands. The concept put forth is that communications between the supplier and customer be open and frank, and based on a high level of trust. The authors cite improvements in information technology that have the potential to open communication to support the requirements of the entire quick response system (pp. 96-102).
The third part of the book provides specific case studies and examples of quick response concepts in various industries. Again, the importance of quality is demonstrated in the very first example given in the section dealing with partnerships. The leadership of quality management in establishing routine meetings with suppliers and customers, to agree on standards that assure the product and process are capable of sustained conformance, is a key element of the quick response effort (p. 156).
The last section of the book is purely academic in that it deals with research directions that are emerging because of wider acceptance of the quick response concepts and more powerful information technology systems to support it. Lowson, King, and Hunter provide a six-page bibliography, which is a solid resource to support the future investigations suggested in this section. The book is challenging, informative, and well written.
High Standards, Hard Choices: A CEO’s Journey of Courage, Risk, and Change.
Dana G. Mead with Thomas C. Hayes. 2000. New York: John Wiley & Sons. 259 pages.
High Standards, Hard Choices: A CEO’s Journey of Courage, Risk, and Change examines the authors’ relationship with Mike Walsh as they worked together to change the corporate culture at Tenneco. The account describes Mike Walsh’s battle with cancer and his desire to restructure the company to meet the challenges of the future. He was hired as Tenneco’s chairman and chief executive officer in 1991. Dana G. Mead was recruited as CEO in 1992 to assist in the restructuring, and succeeded Walsh in his position in 1994 after he was consumed by cancer and had to relinquish his position. Mike Walsh died of respiratory failure on Friday, May 6, 1994, two months before his 52nd birthday.
The real story is how these two gentlemen planned for the restructuring of Tenneco in the first half of the 1990s and how Mead was able to execute the plan that restored the firm to a solid contributor to world business. A key element of the restructuring effort was a program in process reengineering, quality improvement, and cost reduction outlined by the Feigenbaums of General Systems Company. The heart of the program they developed was a cost-of-quality system that “Mike Walsh considered to be the best method for shaking up the organization and getting management and employees focused on cutting costs” (p. 16). To assure that senior managers were committed to this concept their bonus was tied to reducing failure costs. This effort is credited with freeing capital to improve the financial position of Tenneco, which was operating in a sluggish period of economic growth, had no technological breakthroughs looming, nor had an opportunity to raise prices because of competition and excess capacity.
Given the internal quality mandate, Walsh and Mead could orchestrate the strategic restructuring of Tenneco. The book does an eloquent job of describing the planning these men collaborated on during their brief professional association. The most immediate problem they faced was getting the farm machinery and construction equipment business, J. I. Case, under control. This was Tenneco’s most dominant business, and it lost $618 million from operations in 1991. The task of dealing with the woes of Case fell to Mead who effectively dealt with each problem, including excess capacity, high fixed costs and vertical integration, unprofitable product offerings, and ill-conceived marketing strategies. By the fourth quarter of 1993, Case was profitable (p. 37).
The Case example was just one of the external battles that were fought during this period. At the same time, international business opportunities had to be considered to keep Tenneco in the world business arena. Romania was identified as a strategic opportunity in that it was an undeveloped country that had large, valuable, and underutilized wealth in its rich soil, forests, energy, and ore reserves. This part of the story is told in the second part of the book, and is a good case study in project management.
On another front, Tenneco was concerned about the flow of business to its Newport News shipbuilding facility. The downturn of the defense budget placed the facility in jeopardy. The big-ticket item that promised to save the facility was a new nuclear-powered aircraft carrier. The problem was that the $4.4 billion for the new carrier was delayed, which pitted Tenneco against General Dynamics Corporation’s electric boat for a $70 billion Attack submarine contract. When the Navy could not be persuaded to consider Tenneco’s position, a strategy to take the case directly to Congress was orchestrated. This part of the story is told in the third part of the book, and is a good case study in the foibles of defense contracting during the 1990s.
The book is an interesting account of what happened during the restructuring period of the 1990s. The account of the way Mike Walsh and Dana Mead coped with the personal and business situations helps explain some of the turmoil of economic organization and social uncertainty that many people experienced during this time.
Rewarding Teams: Lessons From the Trenches.
Glenn Parker, Jerry McAdams and David Zielinski. 2000. San Francisco: Jossey-Bass. 199 pages.
Glenn Parker has teamed with two colleagues, Jerry McAdams and David Zielinski, to present some lessons learned from their experience of compensating teams for their efforts. The book presents 27 profiles of team reward and recognition plans used by various organizations to motivate and compensate individual team members, teams, and groups. The authors stress that: “The ‘teams-of-the-month’ award won’t do: You need incentives that are fair, motivational, and properly linked to desired behaviors and result and that reflect the unique aspects of your business and its structure, systems, and culture” (p. xi).
The authors use a fictitious case in the first two chapters to establish the basic tenets of rewarding teams. It goes through the process of establishing teams, empowering and developing them, and creating a meaningful reward system to acknowledge their work. The key to succeeding in each step of the process is communication and involvement of all participants.
The book gets bogged down in the next segment by presenting example after example of team structure and recognition plans. Each presentation gives a slightly different nuance to the reward-and-recognition theme, which attests to the thoroughness of the authors’ research and understanding of the topic. While it is unlikely that any one individual, other than a consultant, would be interested in all of the detail provided in the cases presented in chapters 3 and 4 of the book, the variety of approaches is impressive. The sheer volume assures that readers are likely to find one or more cases that fit their situation. Each case is well written in a positive style, and provides sufficient detail to develop models that can be tailored to a specific situation. The lesson learned at the end of each case is very valuable in identifying the pitfalls of the program illustrated, and should be heeded.
The last chapter of the book “summarizes how you can best utilize project, recognition, and group incentive plans to improve teamwork and organizational performance” (p. 185). The lessons learned are related to the cases and reinforced by box inserts that provide concise descriptions of the actions to be taken.
The Corporate Culture Survival Guide: Sense and Nonsense About Culture Change.
Edgar H. Schein: Foreword by Warren Bennis. 1999. San Francisco: Jossey-Bass. 199 pages.
The concept that The Corporate Culture Survival Guide is built upon rests on Schein’s desire to supplement his previous book, Organizational Culture and Leadership, and share his real-world experience gained as a member of and consultant to organizations. The book is part of the Warren Bennis Signature Series designed to discuss contemporary management thought and practice to managers of all organizations seeking to cope effectively with the future.
The book opens with a very focused discussion of the elements of corporate culture. In four chapters, this section covers the vocabulary of the body of knowledge that defines the discipline. The framework of corporate culture is said to consist of three levels that go from the very visible to the very tacit. The most tangible consists of the artifacts of the organization that present a visual indication of how it operates, but since they are inanimate they cannot communicate more than an impression. To get to the why of element or organization culture, its espoused values must be examined. Communication is the key to this element in that it is how the organization expresses itself in terms of its basic values, principles, ethics, and values. Schein cautions that the trappings of the first two levels do not provide a full picture of the way the organization operates. The ultimate source of this information comes from the shared tacit assumptions it holds. These have evolved from a joint learning process, and have a direct bearing on the its immediate success and ability to cope with the change environment in which it thrives.
The first part of the book provides specific information on the meaning of the various levels of corporate culture and how to elicit the information that is needed to fully understand what is actually driving the organization. The process suggested in the quest to determine what corporate culture is built on is given in two parts consisting of a brief tutorial and the practical implications of the aspects of the subject. The elements of this process include the external survival issues, internal integration issues, and deeper underlying assumptions. The section closes with a model that can be used to assess corporate culture. Schein is emphatic that culture questionnaires do not reveal cultural assumptions needed to fully understand how things work in an organization. As an alternative, he outlines an exercise that can be used to elicit the information needed to make an informed estimate of the corporate culture.
The second part of the book, called “Corporate Culture in Action,” provides information on how the concept manifests itself in various situations found in today’s dynamic business environment. Beginning with the creation of culture in start-up firms, Schein provides cases to illustrate his observation of how firms evolve as they mature. He refers to the work Kurt Lewin did in the field of social psychology to describe his model of psycodynamics of transformative change that organizations experience as they grow. Simply stated the organization unfreezes, changes, and refreezes in the process of adapting to changing internal and external conditions. A similar process is outlined for mature companies that have to redefine themselves, since the business niche they claimed narrows because of obsolescence, broadens because of technology, or becomes crowded because of competition. The final phenomenon discussed is the impact of cultural factors related to acquisitions, mergers, joint ventures, and other blended organizations. The issue is how to assure a harmonious assimilation of cultural traits during the planning and integration stages of the combination of the independent organizations.
The book ends with a summary of the reality of culture for the serious culture leader. In six pages it provides a wealth of information about culture, change, and coping in today’s business environment. But try to avoid the temptation to read it before working through the book. The information, cases, and models are well worth the time to introduce yourself to the theory and practice of organization culture as viewed by Edgar H. Schein.
