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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Monday, May 26, 2003

Late Growth, Divisional Associates, Tighten & Leverage Organizational Brand

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

"The overlapping of goals for the two brands (internal - employer and external - corporate) and the interest in asserting the company brand to employees reflect executives' awareness that mergers, acquisitions, spin-offs, and other forces of change increasingly blur company identity, with adverse impact on the effectiveness of the workforce. Just as the disappearance or transformation of established company names makes customers wonder whom they are buying from, it can lead employees to wonder whom they are working for and why."

The Conference Board, "Engaging Employees Through Your Brand" Preliminary Findings

Journal of 2020 Foresight: What happens in late growth and early maturity stage?

Trailblazer: Having weathered the challenges of rapid growth, the organization plateaus with significant advantages: size, financial resources, well-developed systems, and an experienced, competent staff.

J2020F: They've weathered the crisis during which time top managers find it extremely difficult to switch from directing to delegating and waiting. But, once the crisis is resolved, this phase is about loosening, you said.

TB: Yes, the 180-degree different practice favors innovation, divergence, and adaptability.

J2020F: But, that shift in organizational structure, taken to an extreme, sets up its own unique crisis ending this chapter in the company's lifespan, right?

TB: You're catching on. Too much DELEGATION begets a crisis of CONTROL that ushers in COORDINATION as a growth solution for the next phase. But, for our purposes here, the early maturity phase is about AUTONOMY and DELEGATION.

J2020F: Right, let's not get too far ahead of ourselves. Contrast this stage to the others we've described in terms of People, Process and Organization Structure.

TB: This is the time for two talent clusters to shine, both Associates. The first, the extreme Associate --the ASSOCIATE-Associate -- takes on the responsibility for sustaining growth and innovation so the organization can survive.

J2020F: Isn't this the time when the organization builds a product brand into an overarching organization brand through multiple products and services?

TB: Yes. Extreme associates are particularly suited to build a culture based upon trust. Reputation matches external brand and is maintained through community-based values and informal knowledge sharing processes.

J2020F: And at lower levels in the organization, delegation expands the feelings of autonomy and ushers in newfound motivation?

TB: That's right. Top executives at headquarters restrain their impulse to direct everything. They practice management by exception, based on periodic reports from the field.

J2020F: What about communication?

TB: Communication from the top is infrequent. Usually the medium is through e-mail correspondence, telephone, or brief visits to field locations.

J2020F: Brief visits to the field means a shift in strategy and structure, right?

TB: Yes. In this stage of growth a divisional structure run by managers decentralized from the headquarters satisfies the need for delegation and autonomy.

J2020F: What about their incentives?

TB: They're given the responsibility and authority to penetrate larger markets. They're able to respond faster to shifting customer preferences, and they've got the green light to develop new products.

J2020F: So the top leaders manage by exception. What else do they concentrate on?

TB: They focus on making new acquisitions that can be lined up beside other decentralized units. They want to expand their markets. In doing so, they come to rely on the ASSOCIATE-Academics to provide analytical specialties, develop proprietary best practices and access external benchmark research.

J2020F: In this stage growth evolves from the successful application of a decentralized organization structure, right?

TB: Yes. The ASSOCIATE-Academics, themselves, grow through externally offered training and development for their functional departments. They follow professional standards, but remain loyal to the organization, as they lower costs with the use of technical tools.

J2020F: What happens in terms of customers and new products?

TB: By this time the organization no longer competes solely on the basis of product leadership. This is the mass market with a high degree of repeat buying. As such, customers have become sophisticated and purchase based upon brands.

J2020F: So the value discipline becomes more heavily weighted in the organizational excellence discipline.

TB: That's right. Superior quality is critical, product differentiation is less important. Standardization increases. That means less rapid product changes.

J2020F: So a slower pace equates into higher predictability and stability.

TB: Yes, in terms of manufacturing and distribution processes, they are fully optimized or over capacity.

J2020: How does the process improvement effort in this phase differ than the previous?

TB: Well, the strategy is to tighten and leverage operations instead of building on basics. But, as in the last phase our two-step approach is the same.

J2020F: You mean the implementation priorities equate into immediate impact and sustained impact?

TB: But, before I tell you those, like in the last stage there are traps to STAY AWAY from, such as:

Emphasize individual performance when assessing senior management;

Select suppliers based upon their general reputation as a vendor;

Consolidate by offering fewer services;

Increase hours of training in general knowledge topics;

Shift primary responsibility for assuring compliance to improvement standards away from the business improvement unit; and

Focus on cost reduction in making decisions about acquiring technology.

J2020F: What SHOULD YOU FOCUS on to deliver immediate impact in the first year?

TB: You should select from the following list:

Promote department-level improvement teams;

Use process simplification frequently;

Train in problem solving and other specialized topics;

Listen to supplier suggestions about new products and services;

Select suppliers through a combination of certification and competitive bidding;

Emphasize the enforcement role of the business process improvement unit;

Make regular and consistent measurements of progress;

Provide information to mid-management about the business consequences of business process performance;

Emphasize the creation of more products in expansion plans; and

Promote business process improvement as a key to your reputation.

J2020F: To hold the gains and get more return on the investment in the first step, what do you focus on in step two to realize gains over 3 years?

TB: Here, you implement up to a half dozen initiatives:

Emphasize team and business process improvement in mid-management evaluations;

Empower after-sales service people;

Use cycle time analysis regularly;

Emphasize customer requests and internal market research to identify new products;

Measure process improvements; and

Emphasize reliability and responsiveness as key to your reputation.

J2020F: I imagine the number of Agentsand the influence of Athletes drops in general in this phase.

TB: That's right. Although, Athletes might hang on until the end of the phase.

J2020F: Why?

TB: If they reside in the management ranks, they've been given much greater responsibility to run operational units and market territories. Profit centers and bonuses are used to stimulate motivation, as well as individual bonuses to appeal to their individual competitive natures.

J2020F: So, with stable manufacturing processes, lower labor skills, and long production runs what happens to distribution?

TB: Organizations in this phase pare down distribution channels to improve margins.

J2020F: How are margins and profits impacted?

TB: This is the stage of falling prices. Commodity priced products force down both profits and margins.

J2020F: So the price competition leads to shakeouts in the industry, then?

TB: That's right. With competitive cost the key, it is a lousy acquisition climate. It's just plain tough to sell off companies or divisions.

J2020F: Which brings us to another crisis point for the organization, right?

TB: Eventually in this business climate, serious problems arise when top management realizes they are losing control over a highly diversified field operation.

J2020F: Losing control? In what ways?

TB: The autonomous field managers and division leaders get used to running their own show without coordinating their plans and decisions about revenue, technology, hiring and developing with the rest of the organization.

J2020F: Too much of a good thing turns out to be bad for the whole?

TB: The Associate talent clusters, known for their high need for organizational affiliation, develop strong, local bonds to the divisional culture.

J2020F: And the crisis hits high gear, when what happens?

TB: The crisis gets triggered as soon as top management, back at headquarters, seeks to regain control over the sprawling, total company.

J2020F: Do they succeed in re-centralizing operations?

TB: No, the vast scope of operations makes a return to centralization impractical. Instead, they have to find new systems of coordination. And that sets the theme for the next 180-degree change in practice.

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