video by Gerald Ross and Michael Kay.
Change Lab International (1993)
Reviewed by Grady McAllister
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.
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:
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.
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.
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."
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.
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.
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."
concludes the presentation with a comment on the present and
a word of hope for the future:
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.
Vasthead is the professional web site of
Grady McAllister of Houston, Texas.