If we don't change our direction we are likely to end up where we're headed.
In today's "Nanosecond" culture, successful organizations are doing what was once considered impossible. They are increasing customer satisfaction, shortening process cycles and response times, reducing costs, and developing innovative new products and services -- all at the same time.
Not long ago, organizations could succeed by excelling at one or two of these areas. But the corporate landscape is now littered with the once mighty victims of this obsolete thinking. Today's winners are capitalizing on the changes and challenges facing all organizations, by being better and faster and cheaper and newer than their less nimble competitors.
Pointed In The Wrong Direction
Transforming a traditional organization to one that's better, faster, cheaper, and newer is extremely difficult. That's because organizations have built powerful cultures, systems, and practices that are now pointed in the wrong direction. This misdirection can be found across three key areas:
* Internally-Focused -- Most decisions about products, services, and organization direction are inside out. Product and service development specialists, technical experts, managers, planners, and other professionals spend most of their time inside the organization pushing products and services out to the market.
Too often the needs of the organization are put ahead of those people it's trying to "serve". As John McDonnell, Chairman and CEO of McDonnell Douglas put it, "We did not always listen to what the customer had to say before telling him what he wanted." This "we know best" approach is now finding many long time leaders out of sync with their markets. The ratings (and revenues) of many mighty corporations are plummeting. Their "loyal" (once treated as captive) customers find products and services that better reflect their changing perceptions of value.
* Functionally Managed -- Individual departments work to optimize their own internal efficiency. Goals, objectives, measurements, and career paths move up and down within the narrow, functional "chimney walls." Functional managers and their employees focus on doing their own jobs or segment of the production, delivery, or support process.
Functionally managed organizations typically reduce service/quality levels while increasing cycle times and costs by; 1) fostering an "us-versus-them" approach to communications and fighting for organizational resources, 2) leaving unmanaged gaps between departments which disrupt cross-functional work processes, 3) making improvements or changes in one department which hurts the effectiveness of other departments in the process, and, 4) losing sight of customer-supplier relationships and meeting everyone's needs.
Since the 1950's, Toyota has worked tirelessly to reduce the walls and gaps between departments. By the 1970's, their manufacturing methods became widely known throughout Japan as the "Toyota Production Methods." In the early 1980's, their highly successful practices migrated to North America as "just-in-time" manufacturing. Stressing the importance of managing across organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within your own division. One of the most important functions of a Division Manager is to improve coordination between his own division and other divisions. It you cannot handle this task, please go work for an American company."
In today's "Nanosecond" culture, successful organizations are doing what was once considered impossible. They are increasing customer satisfaction, shortening process cycles and response times, reducing costs, and developing innovative new products and services -- all at the same time.
Not long ago, organizations could succeed by excelling at one or two of these areas. But the corporate landscape is now littered with the once mighty victims of this obsolete thinking. Today's winners are capitalizing on the changes and challenges facing all organizations, by being better and faster and cheaper and newer than their less nimble competitors.
Pointed In The Wrong Direction
Transforming a traditional organization to one that's better, faster, cheaper, and newer is extremely difficult. That's because organizations have built powerful cultures, systems, and practices that are now pointed in the wrong direction. This misdirection can be found across three key areas:
* Internally-Focused -- Most decisions about products, services, and organization direction are inside out. Product and service development specialists, technical experts, managers, planners, and other professionals spend most of their time inside the organization pushing products and services out to the market.
Too often the needs of the organization are put ahead of those people it's trying to "serve". As John McDonnell, Chairman and CEO of McDonnell Douglas put it, "We did not always listen to what the customer had to say before telling him what he wanted." This "we know best" approach is now finding many long time leaders out of sync with their markets. The ratings (and revenues) of many mighty corporations are plummeting. Their "loyal" (once treated as captive) customers find products and services that better reflect their changing perceptions of value.
* Functionally Managed -- Individual departments work to optimize their own internal efficiency. Goals, objectives, measurements, and career paths move up and down within the narrow, functional "chimney walls." Functional managers and their employees focus on doing their own jobs or segment of the production, delivery, or support process.
Functionally managed organizations typically reduce service/quality levels while increasing cycle times and costs by; 1) fostering an "us-versus-them" approach to communications and fighting for organizational resources, 2) leaving unmanaged gaps between departments which disrupt cross-functional work processes, 3) making improvements or changes in one department which hurts the effectiveness of other departments in the process, and, 4) losing sight of customer-supplier relationships and meeting everyone's needs.
Since the 1950's, Toyota has worked tirelessly to reduce the walls and gaps between departments. By the 1970's, their manufacturing methods became widely known throughout Japan as the "Toyota Production Methods." In the early 1980's, their highly successful practices migrated to North America as "just-in-time" manufacturing. Stressing the importance of managing across organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within your own division. One of the most important functions of a Division Manager is to improve coordination between his own division and other divisions. It you cannot handle this task, please go work for an American company."
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