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THE MANAGEMENT REVOLUTION

A video by Gerald Ross and Michael Kay.
Change Lab International (1993)

Reviewed by Grady McAllister

The Management Revolution is the first film in the series, The Power of Change.  Dr. Gerald Ross and Michael Kay of Change Lab International look at how change is transforming American business.

Day by day we hear of a giant of American industry that is in trouble or falling by the wayside. It's easy to assume that their management has been asleep at the wheel.  Michael Kay says that is not the case:

What they have been facing is an epochal change, a once in two hundred years change in how they go about doing business. Such a change is, by definition, outside the experience of anyone in management today.
Their very size has limited their ability to compete in the new, fragmented market.  Gerald Ross says,  "The challenge for business today is to achieve variety at low cost."   The concept of producing customized goods at low cost is called "batch of one." It means the ability to quickly customize at mass production prices.

Kay says: "You can not produce a product which has to be there or a service which has to be delivered instantly when you require five levels of signature."

In the past, managers operated "by exception." They did things the same way all the time unless an exception occurred. But when markets fragment and every product or service is different, every decision is an exception.  With no standard solutions, decisions get pushed  up to higher and higher management. Ross says, "When everything is an exception, the bottleneck is at the top of the bottle." Organizations become clogged, traumatized and may stop functioning altogether.

Downsizing has  "surgically removed" parts of organizations without changing outmoded processes.  That's like cutting off a leg and then bragging about how much weight you lost. Ross says, "So you have a lot of organizations hobbling along that are fundamentally crippled." The structure of these companies looks like a pyramid with pieces bitten out at every level.

Ross says, "In the new molecular organization, you'll either be serving a customer or you'll be serving someone who is." There will be few levels of management and very fast responses.  People will make their own decisions and "have ownership of the issues that they manage." 

Kay concludes the presentation with a comment on the present and a word of hope for the future:

There sees to be this terrible sense that our genius for production of goods and services is dying away. Yet, this is terribly wrong. Essentially, North America is incredibly productive. It has probably the most flexible society on earth. Mass customization, the process of producing and taking information and goods and services down to individuals is not made in America; it's made for  America. It is, as a society, the one in the world that can really make this thing happen. 


Part 2 of this series is also reviewed on this web site.


The Vasthead is the professional web site of
Grady McAllister of Houston, Texas.

http://vasthead.com

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An Inconvenient Quote

"Why do some people make a career out of getting mad at the drop of a careless sentence or misread facial expression? The answer lies in a simple, eight-letter word: neurosis. It is not my job, nor should it be yours to try to understand what makes neurotics tick. This is serious medical stuff; so give yourself a break and let the medical professions handle it. Why people are neurotic is one of those great mysteries of life. Just leave it at that."

Robert J. Ringer

Getting What You Want: The Seven Principles of Rational Living. Robert J. Ringer. New York: G.P. Putman's Sons, 2000, page 113.