May/June 1998
The Race is On
Enormous and rapid change in globalization and technology are creating a hefty dose of confusion. If you´re not confused, you´re a rare bird, indeed. It´s a tough time for even the fastest and cleverest of Ducks® -- but it´s also a very exciting time. If you succeed in today´s rapidly changing marketplace, you are indeed a winner. After all, you´ve got to be more creative, more customer oriented, more flexible, more effective, and more valued-added than ever. A little luck can´t hurt either. In this issue of Duck Tales, I´d like to focus on maintaining your competitive edge amid all the change and confusion. If you´re going to swim in the big pond, you´ve got to do more than just keep your head above water--you´ve got to have a destination in mind, excellent navigation skills, and an unsinkable attitude. Managing Through Interpretation
A rapidly changing marketplace and the demise of the traditional hierarchy has forced managers to rethink their management approach. The traditional, analytical approach, in which the manager defines clear objectives and identifies resources to create a fixed solution, works well, but only in stable markets. As markets become less stable, managers find themselves leaning toward a more flexible approach, one that will adapt to the desires and demands of changing customers. How does a leader move from strict analysis to open-minded, open-ended interpretation? Here are a few suggestions: Talk and listen, talk and listen. Conversation is essential for valid interpretation. Use whatever methods necessary to determine what your customers are saying about your product and their needs. IBM sent its research scientists out of the labs and into customers´ offices for some "real" conversation. The scientists gained a new perspective, and consequently, were able to better serve the customer.
Create stretch goals. A stretch goal takes employees out of their traditional way of thinking and working. Whether the goal is met is immaterial; a stretch goal stimulates creative conversation and interpretation.
Talk to the right people. Use your key, lead customers for conversation. Lead clients can move conversations forward in new directions and stimulate innovation.
Identify communication interpreters. Organizations need internal interpreters who can keep communication moving across a company´s boundaries. Identify and encourage interpreters to bridge the cultural and linguistic gaps throughout the organization so that everyone understands the message. Adding Up Value
Be careful when adding value to your products and services. Value-added does not necessarily translate into added profit. To be a leader in value-added services and profit, the wise Duck® will keep these guidelines in mind: Check the addition. Do your customers really want the services or features you´ve added? Adding the wrong values can be as dangerous as adding none at all.
Add something unique. Determine what your customers really want. It may not be the actual product as much as something like more leisure time. Then out-innovate the competition by adding a unique value that meets those needs.
Find a new way to listen. You need to know what´s on your customers´ minds at all times. Experiment with your survey methods. One restaurant owner poses as a tourist outside restaurants and asks departing guests if they liked their meals.
Give yourself time to think. If your day is consumed with meetings and other distractions, you risk losing your creative edge. Set aside time to brainstorm and study other industries.
Ask yourself, "how long will this last?" Chances are, your competitors may soon add the value you already added to your product. Decide which values will give you the longest advantage and highest return on your investment. No Easy Answers
Forget the idea that any one initiative can solve your company´s problems, advises business guru Jim Maxmin. The long-time CEO of several major international companies says too many leaders buy into the "silver bullet" myth, believing that companies can achieve ongoing competitive advantages with the right program. TQM, JIT, reduced cycle time, restructuring, and other strategic plans are viewed as simple solutions that will solve almost any problem. But these initiatives are based on short-term goals and, more often than not, on cost reduction. Cost reduction, however, does not create value. "The only time value is created," says Maxmin, "is when the end consumer buys something for more than it cost the manufacturer to make." Shareholder value that results from cost reduction is not sustainable, since costs are finite. Companies that want to succeed in the global economy must focus not on cost reduction but on value creation. Instead of quick fixes, companies must embrace complexity. Instead of textbook strategies of the moment, companies need to develop unique strategies that take time to implement and are difficult for competitors to replicate. "We must shift our thinking away from the mechanical, simplistic, financial orientation--and embrace a value-creation-centered and truly customer-centered mode of thinking and behaving," says Maxmin. Companies must become flexible, responsive, and dynamic. And above all, says Maxmin, organizations must be patient, realizing that successful implementation takes much time and long-term effort. Your feathered friend couldn´t agree more! Smart Organizations, Smart Growth
Nearly all companies agree that R&D is essential to the growth of organizations, but few have made the successful leap from theory to action. In fact, in a study of 700 organizations in ten industries, only 25 percent said they were effective in their innovation efforts. Why the disparity? According to Jim and David Matheson, authors of The Smart Organization: Creating Value Through Strategic R&D, an organization´s decision-making process is key to reforming its culture as well as its R&D. The father-and-son team define "smart" organizations as those that continually develop exceptional products and services with prices that create value leadership. Here are some of the fundamental principles of the smart organization: Accept change as positive and productive. This can be difficult at times, but the resulting opportunities are worth it.
Make a value creation culture. Only when everyone in the organization knows who the customers are and how value is created by serving them will R&D succeed.
Employ an outside-in strategic perspective. Management must understand how external forces change the industry and customers, and how competition and shifts in the outside world affect their organization.
Use systems thinking. Consider many factors when making strategic decisions, then narrow those factors to the ones most essential for value creation.
Let information flow. Make sure managers get the best information quickly. Keep secrets to a minimum and encourage informal channels and internal networks. Generating Breakthrough Ideas
Companies looking for ways to solve problems or generate ideas may have an untapped source right under their noses: their own people. Every mind is a potential gold mine of ideas--you just need to access them. And brainstorming may be the perfect way. Think of brainstorming as an organized free-for-all, where people share opinions, ideas, suggestions, and knowledge. The trick is to remove mental constraints and suspend any hierarchy, so that open, honest communication can occur. One consultant offers four rules for productive brainstorming: Make quantity, not quality, count. The point of brainstorming is to come up with ideas and suggestions without worrying about their feasibility. When quality enters the picture, people feel pressured and are less likely to think creatively.
Respect every idea. Every contribution is important and should be recorded. Don´t discount an idea just because it appears far-fetched or difficult to execute.
Don´t evaluate ideas. In a brainstorming session, the purpose is to pump out ideas, not judge them. Negative comments about ideas tend to demoralize people, and positive feedback can intimidate people, making them feel as if their own ideas cannot compete.
Abdicate ownership of ideas. Members should view brainstorming as a group effort and forget who proposed which idea. When people own ideas, there may be too much ego involved to evaluate ideas honestly. The Genius of Making Mistakes
What do investment expert Warren Buffett, best-selling business author Stephen Covey, and Nobel Prize winner Gary Becker have in common with Albert Einstein? They all have experienced great failure despite their well-known successes. Buffett bought $358 million in losing stock; Covey, at one time, had such poor work habits that his career was in jeopardy; Becker spent years developing a theory that ended up completely worthless; and legend has it that Einstein flunked math. Nonetheless, each one of these individuals achieved extraordinary success. The lesson to be learned: Even highly successful people fail, just like the rest of us. In fact, they welcome the chance to take risks, to fail, and to try again--and that´s what sets them apart from others. Many of us lose confidence when something goes wrong, but geniuses don´t waste time and energy blaming themselves. Nor do they worry about what others think of them. They know that innovative ideas are often criticized or laughed at, but they don´t let such opposition stand in their way. "I´m not always going to be right," says one high achiever. "And that´s fine by me." So as we strive to gain a competitive edge in this global marketplace, let´s not forget that mistakes and setbacks are inevitable. Just stand tall and don´t let your feathers get ruffled!
Sincerely, Your Friend
Manco T. Duck
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