The Journal of 2020 Foresight

Reports from the Knowledge Labs about our recent findings, research topics, and interviews with lifestyle leaders who are creating their own futures.

How to stimulate your own powers of foresight. Consider the following thought provokers. Ask yourself, in these categories what are the brand new trends and forces? Which are the ones growing in importance? Which current forces are loosing their steam? Which have peaked or are reversing themselves? Which are the "wildcards" about to disrupt us in the future? POLITICAL AND TECHNICAL thought for food: Electronics, Materials, Energy, Fossil, Nuclear, Alternative, Other, Manufacturing (techniques), Agriculture, Machinery and Equipment, Distribution, Transportation (Urban, Mass, Personal, Surface, Sea, Subsurface, Space), Communication (Printed, Spoken, Interactive, Media), Computers (Information, Knowledge, Storage & Retrieval, Design, Network Resources), Post-Cold War, Third World, Conflict (Local, Regional, Global), Arms Limitation, Undeclared Wars, Terrorism, Nuclear Proliferation, Weapons of Mass Destruction, Governments (More/Less Power and Larger or Smaller Scale), Taxes, Isms: Nationalism, Regionalism, Protectionism, Populism, Cartels, Multinational Corporations, Balance of Trade, Third Party Payments, Regulations (OSHA, etc.) Environmental Impact, U.S. Prestige Abroad. SOCIAL AND ECONOMIC Food for thought: Labor Movements, Unemployment / Employment Cycles, Recession, Employment Patterns, Work Hours / Schedules, Fringe Benefits, Management Approaches, Accounting Policies, Productivity, Energy Costs, Balance of Payments, Inflation, Taxes, Rates of Real Growth, Distribution of Wealth, Capital Availability and Costs, Reliability of Forecasts, Raw Materials, Availability and Costs, Global versus National Economy, Market versus Planned Economies, Generations: Y, X, Boomers, Elderly, Urban vs. Rural Lifestyles, Affluent vs. Poor, Neighborhoods and Communities, Planned or Organic Growth. Got Knowledge?

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Wednesday, June 11, 2003

Renewal: Cascading Stepwise Changes by Collaborative Leadership

Chapter Two: The Ridge

By Steve Howard, CKO
The Knowledge Labs

Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories

“Developing the Emotional Motivation to Change. Facilitation, participation, and delegation encourage a response to the tension between where the company is and where it should be to deal with the discontinuity. Emotional ownership of the response generates commitment to its implementation. This comes most naturally in organizations with low resistance, where the collaborative and cultural styles can be used.”

Paul Strebel, Breakpoints

Journal of 2020 Foresight: Let’s continue our discussion about the four options open to declining mature organizations. You’ve described old game and new game approaches. Now, we’re focusing on the turning point strategies.

Trailblazer: The Collaborative Leader capitalizes on both weaker resistance and change forces.

J2020F: Sporadic changes show up from time to time, but they’re only contained to parts of the organization, right?

TB: Renewal takes advantage of periodic of stepwise change.

J2020F: What do you mean by stepwise?

TB: These are periodic improvements in the original product or service targeted at specific market segments.

J2020F: So, these aren’t the leapfrog product breakthroughs?

TB: Over time extensions in features and benefits and other incremental product or service adaptations can add up in a significant way, though.

J2020F: A drop in demand for an industry’s products -- at the end of an entire industry lifecycle might trigger renewal strategies in a stepwise fashion?

TB: Exactly. End of life products command commodity prices. Therefore, part of an organization might focus on cost reductions. Another part can turn to supply partners for better total cost improvements.

J2020F: I don’t detect a sense of urgency in the pace of change.

TB: That’s true. For renewal, using a collaborative leadership style, the chief executive and his team share ideas and facilitate decision making throughout the organization.

J2020F: Aren’t they likely to meet with high degrees of resistance?

TB: No. Their subordinates are typically able and open to change but unwilling or insecure. The forces of change are weak, so it is not clear in which direction the company should change.

J2020F: So, they’re ready for some direction and eager for change?

TB: They’re eager to participate. Since, the organization is open to change, top management can involve the frontline managers in deciding what and how to change.

J2020F: But, how will they know which way to go?

TB: Top management encourages them to flush out what the need for change means on their level, or for their activity. Since the pace of change is intermediate and the scope is limited to certain organizational dimensions, this participatory approach is best suited for renewal.

J2020F: Can you give us an example?

TB: One classic example Strebel tells is about Seiko’s cascading cultural renewal.

J2020F: They moved in a stepwise manner from the top down?

TB: Yes. Sebel says at Seiko, when Ichiro Hattori announced the ambitious diversification goal to reduce the dependency on watches from 90 percent to 50 percent, endless heated debates occurred with the managers concerned, corporate staff, and union leaders.

J2020F: Not everyone welcomed the shift with open arms, right. How did he forge a consensus?

TB: To bring everyone on board, started at the top by raising a series of strategic questions at every board of directors meeting. For example, "What should Daini Seikosha's strategy be in the watch business to generate enough cash for investment in the diversification program?"

J2020F: He didn’t give them the option to not take on the diversification program, right?

TB: Exactly. When Hattori was satisfied with the answers, he moved to the second stage, a company-wide conference for approximately 50 senior managers.

J2020F: Did he tell them what they decided at the board of director’s level?

TB: No, he followed the collaborative approach. Each was asked to "propose a three-year strategic plan at the divisional and departmental levels relating to the corporate survival scenario in 1990."

J2020F: He wanted to implement a 10-year plan, then, in 3-year steps?

TB: Right. In early 1982, once the board had accepted these plans, the third stage began with a three-day seminar for 250 junior managers who were asked to develop the implications of the plan at their level.

J2020F: And that was the end of the cascade?

TB: Not quite. Finally, a Total Quality Control program was initiated to "ensure the highest level of corporate-wide implementation." And at the time of the centenary celebrations in 1982, the corporate identity and name was changed to the Seiko Instruments and Electronics Co. Ltd.

J2020F: So there was no turning back. I know we need to view the strategy within the framework of the Japanese and Seiko culture. It seems like he spent an inordinate amount of time marshalling the support.

TB: It took longer than expected to get corporate-wide consensus, and to develop the necessary new manufacturing and engineering expertise.

J2020F: Ultimately, the only vote that counts comes from the customers. How did they react?

TB: Well, the diversification cost more than anticipated and the customers wanted a wider product range. Yet Seiko easily achieved its diversification target in 1986, four years ahead of schedule.

J2020F: So a slow start yielded a 40% faster implementation. Not bad.

TB: And, Seiko had developed a new line of sophisticated graphics devices that accounted for 50 percent of sales.

J2020F: So, in this case, the collaborative cascade approach clearly had been appropriate for the prevailing weak forces of change and resistance. But, what if he had been dealing with more resistive unions?

TB: He’d choose either negotiation or manipulation, depending upon the time of delay and corresponding urgency.

J2020F: Isn’t manipulation relatively quick and inexpensive?

TB: Yes, but It is often employed to deal with external status quo advocates on paths of resistance.

J2020F: Like unions?

TB: Yes, but it can backfire.

J2020F: How?

TB: Stebel points out that at Ford U.K., for example, quality circles were first introduced as a "structural remedy for poor productivity and quality" rather than as a genuine attempt to mobilize employee commitment. The unions dismissed the quality circles as a "heavy-handed attempt to short-circuit existing bargaining procedures."

J2020F: So, manipulation requires the ability to structure information, events, and involvement in a manner desirable to the status quo advocates, BUT without creating the feeling of manipulation?

TB: That’s why negotiation produces better results. It typically involves the least power but can be very expensive with respect to the resources that have to be sacrificed to get an agreement.

J2020F: Negotiation seems better suited to renewal and revitalization using the collaborative and cultural implementation approaches.

TB: Right, because of the high premium placed on participation and involvement relative to the other methods for dealing with resistance.

J2020F: How could that have worked for Ford U.K.?

TB: Other organizations, unable to offer unions enough to get an agreement on work reorganization, for instance, use negotiation imaginatively.

J2020F: How so?

TB: Often by recognizing a different constellation of interests at the local level, a new negotiating process can open up which becomes the bridge to a new culture.

J2020F: So, now we turn to the last of four intervention paths, restructuring.

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