For example, New Belgium Brewing Company, Inc is the first wind-powered brewery in America–eliminating 1,800 tonnes (metric tons) of CO2 emissions per year. Each year New Belgium gives $1 per barrel to philanthropic causes. Donations are balanced between the realms of cultural, social, environmental, and drug and alcohol awareness programs. New Belgium takes pride in recycling all damaged cardboard cartons, keg caps, amber glass, office materials, and even plastic shrink-wrap. The automation of the entire brewing process was designed and implemented by New Belgium. Innovation permeates New Belgium style as shown in their Open Book Management, employee ownership opportunities, and a desire to create a living, learning community amongst the staff. New Belgium employs a small cadre of quality assurance specialists who continuously monitor the health of our beers, conduct daily taste panels, and oversee the advanced taste training and palate capabilities of each employee.
Another example we could look at is, General Electric, which is a global company that strives to find the very best people from all around the globe. GE employees are already known for their commitment to excellence in products and services-but that same degree of vigor and commitment are carried over to the communities that GE employees call home. They work to not just have a physical presence in those areas we operate but to also become a member, a stakeholder in those communities. GE in India-its commitment to the promotion of better health and better living-its rapid response in times of need and natural disaster-and its continued support of education and leadership development. The GE Power Controls Hosur, India, plant led a project called "Environment for the Generation" aimed at creating awareness among the people of Hosur by helping to eliminate and fight the menace of recurring fatal cases of Viral Hepatitis B in the area population. The project team consisted of 30 volunteers from the GE Hosur plant and 50 student volunteers from local educational institutions. Volunteers from the local villages and six dedicated doctors, mobilized by M/S PFIZER INDIA LTD., a leading pharmaceutical company, also supported this team. With help from local government agencies, the remote village of Vempalli, located 30 kilometers from Hosur was chosen as the project site. The village is in such a remote place that there were no roads for vehicles to use and the team had to trek for one kilometer to reach it. Aided by audiovisuals in the local language of Tahil, a group of doctors presented educational lectures on basic health needs and individuals' responsibilities to maintain sanitary environmental conditions. Three hundred people were given examinations and were provided with free medicines if necessary. Another 200 people, including newborn babies, received immunization vaccines for Hepatitis B. The second and third doses of Hepatitis B vaccines were subsequently administered to these individuals to complete the course.
- Dynamic integration of the supply-chain network
The integration of the supplier into the organisational structure adds value to the organisation’s customers. As price competition ceases to be a global force the supplier’s role will be to add value not just to reduce costs. Customers and suppliers will work together and form inter-organisational teams, which will facilitate improved communication between organisations and increase the rate of learning. Benefits will be gained from the effects of sharing mutual experience and knowledge, which will result in the whole chain, becoming better aligned with the final customer’s requirements and objectives.
Successful servicing of the market requires that companies do everything possible to add value to their customer's customers. An organisation pursuing this strategy will seek to trade through single source supplier contracts and win business based on its reliability and trustworthiness.
For example, Ford Motor Co., the world's second largest automaker with revenues in 2000 of $170 billion and approximately 335,000 employees in 200 markets on six continents, has implemented the e-STEEL Supply-Network for multi-tier direct materials procurement. To gain maximum control and cost savings in buying steel, Ford launched a centralized demand aggregation and remarketing program across its North American Tier 1 steel supply chain in 1995. Through this program, Ford combines the individual steel buys from its stampers and then negotiates larger orders with its steel suppliers. This gives Ford advantageous volume discounts. Ford then remarkets the steel to its stampers and manages all of the material, information and financial flows. Ford needed to convert the program to a new, automated supply chain system that would avoid any serious disruption in this critical supply network or alienation of any future participants. Ford identified early in the development of e-Commerce that new, web-native technologies could provide a wide range of strategic advantages to an entire supply chain. The automaker viewed such a system as a critical component to streamlining and accelerating its steel procurement growth plans around the world, with other Ford brands, and across other direct material supply networks. In May 2000, Ford selected e-STEEL to design and implement an e-STEEL SupplyNetwork to provide secure, efficient, multi-enterprise connectivity and real time data visibility for Ford and its steel supply chain. The e-STEEL SupplyNetwork provides significant value to Ford’ as well as to each of the participants in the carmaker's steel supply chain. While Ford gains maximum value by using the e-STEEL system in innovative ways to reduce direct material and procurement costs, both Ford and its steel supply partners gain significant strategic and direct cost savings.
Another example, Sony, which was one of the first electronics companies to set up an online supply-chain management system worldwide. In June 1999, Sony hired its first chief information officer, formed an in-house task force and teamed with its retailers to work out how to shorten shipment times. "To reduce the risk in price adjustments we had to minimize our inventory," says Fujio Nishida, president and coo of Sony Electronics, a subsidiary of Sony based in Park Ridge, New Jersey. Now Sony is exploring how to use the Internet to enable its electronics and entertainment divisions to work together. A site called Sonystyle.com, launched in November, offers 750 Sony products, a third of the company's total, for sale online. Sonystyle.com also enables consumers to download Sony-owned music for about a dollar a song. "This site is an example of convergence," says Robert Ashcroft, president and CEO of Sony Electronics e-Solutions, a subsidiary of Sony, "and it's allowing us to continue our relationship with our customers after they've purchased a device."
- Virtual organisational structure
The workforce for many organisations will be decentralised and even home-based via interactive networks. ‘Why pay for an office that is available for 160 hours per week when it is being used for only 20-40 hours per week?’.’ The merging of information technology and telecommunications has seen a revolution in our society, which will continue and allow for communication from any number of locations. This virtual organisation will see managers, computer processors, journalists, consultants, designers and many others, all communicating from their own homes and from their customer’s premises. Such areas as technical, research, marketing and information technology functions could be relocated offsite. We shall see the emergence of the virtual team using teleconferencing through laptop computers and other devices. The successful organisation's focus will shift from a control-based to a trust-based system through dedicated, trustworthy and loyal employees.
The innovations of the future will enable the virtual workplace to become a reality for all but manual and operational employees. Manufacturing will still need to take place at a central site or series of sites. However, even in these locations, employees will be empowered with more responsibility and less direct supervision so that a trust-based organisation emerges. The challenge will be to provide social interaction and a sense of belonging within all aspects of these virtual organisations particularly those interconnections, which intensify trust and trustworthiness.
For example, FedEx technology enables customers, couriers and contract delivery personnel to wirelessly access the company's information systems networks anytime, anywhere. In fact, FedEx was the first transportation company to embrace wireless technology more than two decades ago, and continues to be a leader in the use of innovative . Customers can access package tracking and drop-off location data for FedEx Express, FedEx Ground and FedEx Home Delivery via Web-enabled devices such as WAP phones, Personal Digital Assistants and pagers. FedEx couriers, contract delivery personnel and other team members use wireless data collection devices to scan bar codes on shipments. These "magic wands" are a key part of what makes it possible for you to find out where your package is in transit, whether on a FedEx Express jet speeding across the Atlantic Ocean or a FedEx Ground tractor-trailer on the Pennsylvania Turnpike. On average, FedEx Express and FedEx Ground packages are scanned at least a dozen times from pickup to delivery. At pickup, each package's shipping label bar code is immediately scanned to record the pickup time, destination and delivery commitment. The scanned information is uploaded to the FedEx mainframe. Bar codes are scanned again at every key step of the shipping process, allowing customers to follow the status of their shipments throughout the journey. FedEx's newest data collection device for couriers incorporates a micro radio for hands-free communication with a printer and mobile computer in the courier's delivery vehicle. Called the PowerPad, the devices use Bluetooth wireless technology that allows them to communicate with each other within 30 feet.
- Technological innovation
Ground breaking technology will transform many functions of the organisation. Organisations will need to be dynamic, flexible and cherish impermanence and thrive on chaos. Technology will dramatically change the way we communicate, work and socialise. Technological innovation will also improve work processes and accommodate horizontal workflows by providing cross-functional information flows and performance feedback.
Innovations in information technology will assist organisations not only in gathering information but in the development of sophisticated search engines and information warehousing that will help them overcome information overload and analysis paralysis. Every organisation will have access to the latest information technology and methodologies and will be closely integrated in creating reproducible processes that develop long-term capabilities and ensure the right work is being done. The technology of the future will enable organisations to be cheaper, faster, flexible and more competitive.
For example, General Electric with the latest innovation; GE Lighting's new 350 Watt Constant Color CMH SPXX was recently named a "Best New Product" in the 2002 New Product Showcase at Light Fair International - the largest lighting trade show in North America. This product is the ultimate compact light source for applications where color and energy efficiency are essential, such as retail, commercial and some industrial applications; and features a color rendering index (CRI) index of 92, compared to traditional 350 Watt quartz metal halides with a 70 CRI. The 350 Watt Constant Color CMH SPXX provides improved color consistency and lumen maintenance - all while offering superior energy efficiency over comparable products.
- People come first
Instead of producing moribund organisational personnel by forcing the individual to comply with tightly defined corporate norms, companies must find ways to encourage creativity and to nurture and utilise each employee’s unique knowledge and capabilities. World-class organisations will increasingly treat their employees as their most important assets. Despite the pervasive influence of technological innovation the most successful enterprises will be the ones with the quickest reactions, innovative management and the best people.
The learning organisation as proposed by Senge will be crucial to attaining a competitive advantage in a dynamic, rapidly changing market. Organisations that fail to learn and develop their people will not be competitive beyond 2005. Continuous improvement through continuous learning Organisational development will depend on the total involvement of its employees. This includes intellectual, psychological and social development in order to create a high-value workforce. As Senge states, ‘we must build learning organisations-where people continually expand their capability to create the results they truly desire, where new and expansive patterns of thinking are nurtured, where collective aspiration is set free, and where people are continually learning how to learn together’. Since organisations will no longer be able to offer permanent employment they will have to offer ‘employability’ by developing the creative and learning capabilities of their employees.
The current education system will be reorganised to provide an overlap between the creative arts and the practical sciences, the objective being to develop an innovative approach to learning, understanding systems and process thinking. Inhouse educational facilities with global reach and recognition will be the norm in leading-edge organisations that are developing state of the art technologies and strategies. The most competitive companies will establish educational outcomes and team-orientated teaching methodologies that will attract and further develop the most capable employees. These educational activities will increasingly compete and, in some instances, replace government-run institutions. For example, we might anticipate that an Arthur Andersen Masters in Business Administration and a General Motors Masters in Manufacturing will be eagerly sought after qualifications and add lustre to Arthur Andersen and General Motors brand credibility if not leadership in management consulting and automotive manufacturing.
Another example that illustrates the recognition of employees is Hewlett-Packard’s Penang, Malaysia, components facility. They have created an attractive wall of fame and the other is a display of best ideas from improvement teams. Such displays are in each area of the plant.
- Team-based organisational structure
Participative management through teams will increasingly replace the hierarchical structures of today. High-performance teams will manage their direct environment and be instrumental in setting relevant organisational goals.
Individuals with specific knowledge and competencies will combine to make decisions and give direction. The most successful teams will exhibit a richness and depth of purpose that eludes other groups and individuals and will be committed to bringing honour and recognition to their workplace and wider community.
Organisations that are able to align the collective productive and creative energies of their people through teams will be able to maintain and expand their competitive advantage. Advancements in technology will see the formation of virtual teams and the leadership of the organisation will be transformed from an individual to a team structure. Responsibility to the environment and ecology
Organisations of the future will need to pursue zero environmental impact in their operations. Competitive advantage will be gained by the organisation that is environmentally responsible not only by meeting legislated requirements but by exceeding them and ensuring the environment is no longer degraded. The markets will favour the organisation that is actively involved in regenerating and restoring the environmental balance. As Michael Porter, the high priest of market-based competition, emphasised, recent changes have brought environmental improvement and competitiveness together. ‘Environmental progress demands that companies innovate to raise resource productivity and that is precisely what the new challenges of global competitiveness demand’.
Organisations will be attuned to customer requirements. School education gives heavy emphasis to our ecology and environmental issues. Our children are customers of tomorrow and, as such, organisations must be receptive to their emerging requirements. These demands further reinforce the need for organisations to seek competitive advantage through developing products and services, which exceed the toughest environmental legislation.
A good example to illustrate will be, General Electric, which is dedicated to team building, company goals and employee training. The consulting firm that provides strategic planning, leadership development, and experiential learning to GE is CompanyPlay, with a client base that already includes Fortune 500, as well as emerging companies, government and non profit agencies.
- Partnership with customers
The customer will be incorporated into the organisation as partner in the business and as an extension of the organisational culture. Customers will identify with values and belief systems fostered by the organisation. The organisation will stretch its innovative and creative resources and capabilities to create sustainable competitive advantage for its customers. In doing so it will be creating new competitive space that will not be easily challenged and imitated without the same level of loyalty and commitment to the customer base. In order to satisfy end-user customer needs all suppliers and customers in the service chain will have to focus their energies and efforts on the final receipt of the product or service.
Due to the importance of global markets, organisations will require sensing devices to monitor consumer preferences and mood swings in order to capture new competitive space. Competitor monitoring and benchmarking will rarely result in optimum performance. Real advantages will be sought by determining and influencing market behaviour and by aligning organisational activities with emerging trends in global consumer preferences.
For example, Microsoft having its Windows based software integrated with Words, Excel, Power point, Access etc, which are independent software decades ago. These make life easier for users and not affecting the level of loyalty and commitment of the product.
- Clearly communicated vision and objectives
Organisations will need to be tightly focused and highly specialised. The emphasis will be on distinguishing core capabilities, supporting core processes and all other activities will be outsourced. The organisation will need a strong purpose and vision and be focused on its core values in order to make work, meaningful and attract, motivate and retain outstanding people. Organisational purpose will be more than just increasing profit or market share; it will reflect an ongoing commitment to adding value to employees, customers and the wider community. Authentic leadership will relate to initiating and maintaining momentum in process improvement and will increasingly concentrate on formulating and implementing organisation-wide strategies. This strategic intent will include attempts to redefine industries, to break rules and to focus on the medium to long term. Visionary leadership will be assessed not in terms of charisma but by its success in building on the strength of the organisation by preserving core values and by stimulating progress towards trust based relationships within and without the organisation.
For any organisation to achieve world-class performance in the future a clearly defined and articulated vision that states the organisation’s objectives and motivates and inspires performance to achieve the common goal must be present. The vision must be a product of the organisation's core values and purpose and incorporate a practical and flexible implementation plan. Most importantly, commitment from top leadership will be required to articulate the required direction and to ensure that teams successfully implement the plan on a global basis.
For example, Hallmark Cards with its vision and objective to reduce wasteful practices in design and delivery. The initial time-to-market for a new greeting card had been two years, as designs bounced from function to function. A card’s many digit stock number had to be entered thirteen times on sixteen documents is a wasteful practice and the chance of entering a stock number correctly on all thirteen times for a card were ‘zero’. Therefore, when Hallmark’s Shoebox line of cards was to be the pilot project, making a transition of focused, quick response management. (Hallmark had sent large numbers of people to public seminars, where they heard about an earlier, seventeen item version of the customer focus principles. The company produced hundreds of pocket sized laminated cards listing those seventeen principles.) Therefore, instead of having artists in one building, verse writers in another, and production in still another (perhaps in another city), the Shoebox team moved into a single building. A dozen verse writers, a group of artists, several graphics terminals, and administrative processes shared a floor. The result: Stock number entries fell from thirteen to one and documents from sixteen to five. Shoebox’s time-to-market fell to about three months.
- Leadership in world-class organisations
Seven characteristics of leadership for world-class organisations can be identified for the next century.
- Shared vision
The leaders within the successful organisation must possess a shared vision and common purpose. This is founded on a core ideology which includes a few highly prized and enduring core values and a clear reason for being which reflects employees’ idealistic motives for doing the organisation’s work.
Furthermore, according to Collins and Porras, the multiplicity of leadership must develop an audacious and arresting notion of an envisioned future which permeates the organisation and which provides-in association with a powerful core ideology the glue that holds an organisation together as it grows, decentralises, diversifies and expands globally.
- People focus
There are four basic leadership styles appropriate to all circumstances: delegating, supporting, coaching and directing. Any situation will require one or some combination of these styles. Management’s skill will lie in understanding this principle and using the appropriate style to match the problem, so that leadership is seen to value people and give them responsibility and power to act in self-directed teams.
- Teams of leaders
Organisational leadership will no longer be the responsibility of one individual but will fall to a core leadership team, which will share decision-making and responsibility and will be rotational in nature. This will allow new members to contribute every few years for a fixed time period.
- Short-term rotation
The leadership role will be passed on so that managers at their peak will contribute to the leadership team, and they will move beyond this role into mentor role to stimulate continuous improvement. This will not be seen as a demotion but as part of the succession process-which holds the vitality of the leadership team and maintains long term excitement and vigour in the leadership team.
- Transient management
Leaders will have a wide and varied competence base, which includes multi-organisational and global leadership experience. Leaders will need experience and understanding of multicultural values and beliefs and have multi industry experience. This brings to the organisation a comprehensive understanding of global markets and customer needs and gives invigorated momentum to stimulate continuous learning and improvement.
- Educated management
A critical factor in developing world-class leaders will be education. This will take the form not only of formal education, which will be increasingly company sponsored and based within commercial enterprises, but include much greater recognition of experiential learning in the workplace. Fundamental to this process will be developing methods, which assist leaders to support continuous improvement through learning within their organisations. The intention must be to develop competent team members, whose competency is a combination of knowledge, attitude and skills, which will be reinforced further by continuous organisational learning which enhances the level of trust throughout the organisation.
- Psychological strength
The pressures on leaders of the future will be increasingly great and will require perseverance and persistence. They will need to be innovative and creative and operate with clear ethical and moral values.
- Conclusions
Recognition of one global market and electronic interfaces, which eliminate international boundaries create increasing pressures for employers and employees. A new strength of purpose and exceptional leadership qualities are necessary to take advantage of the knowledge and creativity of the workforce and create the world-class organisations necessary to sustain competitive advantage in the next century. The greatest rewards will accrue to those organisations that attract and nurture the most informed, trustworthy and competitive workforce and that make the most significant contribution to the social and environmental infrastructure.
However, we must be careful not to repeat past failures and divisions. As Charles Handy cautions, ‘if a trust-based organisation means trust for some, and the old instrumental contract for the less able, then trust will become a dirty word and a synonym for selfishness’. Our challenge is to build learning organisations that are more consistent with our higher aspirations. As Arie De Geus, from Royal Dutch Shell, compellingly observed. ‘The ability to learn faster than your competitors may be the only sustainable competitive advantage’. Yet it must be stressed that this challenge is not just a matter of simple self interest; it is also a matter of seizing a historic opportunity to be part of what Senge terms a ‘profound evolution in the nature of work’ one that allows ‘business to fundamentally improve the injustice that exists in the world’.
- Bibliography
T. Peters (1987): Thriving on Chaos: Handbook for a Management Revolution, Knopf, New York.
P.M. Sende (1990): The Fifth Discipline, Doubleday, New York.
M. Porter and C. Van Daa Linde (1995): `Green and competitive: ending the stalemate', Harvard Business Review (September/October).
J.C. Collins and L.C. Porras (1996): `Building your company's vision', Harvard Business Review (September/October).
J.C. Handy (1995): `Trust and the virtual organisation', Harvard Business Review (May-June).
Rosalie L.Tung: Learning from World Class Companies, 1st Edition, Thompson Learning (2001)
