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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