The Breakthrough Strategy

by Schaffer, Robert H.

• ISBN13: 9780887304040
• ISBN10: 0887304044
• Format: Paperback
• Copyright: 2010-03-19
• Publisher: HarperCollins Publications

Summary

A management expert demonstrates a strategy for performance improvement. Schaffer applies "the simple and direct approach of the successful entrepreneur" (D. A. Noble) to corporate America.

Excerpts

The Hidden Reserve

On a Friday afternoon the Industrial Paints Division of PPG Industries received a call from a company they had long sought as a customer. The company was running out of a highly specialized paint product and urgently needed a shipment by Monday. Their regular supplier could not guarantee delivery. Could PPG deliver on such short notice?

At the time, Industrial Paints was running at full capacity - seven days, three shifts. It usually took at least several weeks of careful planning to formulate a special order in the lab and then introduce it into the production schedule. But this was a rare opportunity. They promised delivery for Monday.

The task was formidable: the chemists had to develop and test the product, then specify the formulation process. Production had to find the needed facilities; Shipping had to organize the transportation.

On Sunday afternoon, the shipment was on its way to the customer. No ongoing production was delayed.

Almost every manager I've ever talked with can match that story with tales of similar "miracles" in their own companies. They can also tell you what happens once the urgency disappears. The superior performance disappears with it. Life goes back to normal, and managers who have witnessed people perform at levels that far exceeded their normal output, quickly forget that the heroic efforts ever happened.

In this widely shared experience, there is a powerful clue as to why companies have had such difficulty meeting tough competitive challenges - and also a clue as to what they can do differently. During the past twenty-five years, I have devoted my professional life to uncovering the mystery of why, in "normal" times, individuals and organizations always look and feel busy - even overworked and harassed - but are able to double, triple, and even quadruple their output when the situation requires them to do so.

The key is that during normal times, in most organizations, unbelievably vast quantities of potentially productive capacity are untapped, undemanded, unused or frittered away. This great store of "hidden reserve" is what we observe when organizations rise to meet crisis situations. This insight is the foundation for the "breakthrough strategy," a strategy that has enabled many different kinds of organizations to tap into their hidden reserves to produce major performance gains.

A Tale of Two Companies

The corporate offices of Greyline Telecommunications set the scene: the heavy wooden furniture and framed photographs call to mind the early years of the telecommunications industry. People move about with decorum and speak to each other in hushed voices, much as they would in a library.

Greyline managers consider their company successful. Compared with the Bell System companies in the United States, its performance ranks at about the midpoint. Any Greyline manager whose unit is performing comparably to the Bell System average is, in fact, considered to be doing "all right."

Each year, Greyline managers forecast their operating expenses and capital expenditures; these requirements are then translated into rate increase requests made to the governments rate regulators. While Greyline prides itself on being competently managed and up-to-date technically, there is no strong drive to become more productive or, in fact, to change very much in any way.

Greyline owns a subsidiary that makes its telecommunications equipment. Not really viewed as a separate business, the subsidiary exists mainly to supply the parent. It does its job relatively well, but shows little drive to innovate or improve. Performance shortcomings or user complaints are usually dealt with by task forces that spend many months analyzing and discussing.

Let's compare Greyline with another company - one that used to be a telephone company but is now one of the largest conglomerates in Canada: Bell Canada Enterprises (BCE). BCE's subsidiary Bell Canada, is still in telecommunications, but that is only one of the many related businesses that now make up the company, which is also involved in international telecommunications consulting, energy, publishing, and packaging. Bell Canada could not be more different from Greyline. For many years, it has been an industry leader in productivity, cost, and service.

Like Greyline, BCE also has a major stake in a telecommunications manufacturer, the well-known Northern Telecom. That company entered the US. market around 1980 and within a few years had outpaced every other manufacturer - including GTE, ITT, Stromberg-Carlson, and Siemens - to become second only to AT&T. Northern Telecom is one of the few North American suppliers to Nippon Telephone and Telegraph, which is about the most sophisticated buyer of electronic equipment in the world.

When books are written about the weak competitive ability of North American industry, the finger is pointed at companies like old Greyline to explain our deplorable condition. Companies like BCE are extolled as the symbols of what might be possible.

But Greyline and BCE are the same company. "Greyline is Bell Canada before its transformation - a transformation that started not with fantasies of world conquest, nor with a long-range planning study, nor with a "culture change program" nor with a quest for magical, new managerial styles. This transformation began with disciplined, determined efforts to improve the most fundamental aspects of the company's operations: the way work was done at its basic levels, and the way changes were carried out. The company began by increasing the competence of its managers to make things happen faster, to improve fundamental operations. "Greyline" began its transformation by creating expectations throughout the company that constant improvement would become a way of life.

Making Miracles Routine

This book will show that almost every organization has the capacity to make similar changes. It will illustrate the strategy that many corporations (as well as governments, health care groups, and other organizations) have used to achieve such changes. It will describe how these companies began: not by jumping on the magic carpet of the latest managerial fad, in the hope of being whisked to the promised land of treasure and success, but by using familiar ideas and concepts. Often disdained as merely the "management basics," these ideas helped them tap into their hidden reserves and achieve their transformations. In every case, progress started not with high drama, secret formulas, or bold strokes, but with the accomplishment of urgently needed improvements in current performance.

(Continues...)

Excerpted from BREAKTHROUGH STRATEG by Robert H. Schaffer Copyright © 2003 by Robert H. Schaffer
Excerpted by permission. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.