ITChanges in the corporate world around us have never before been so fascinating. So unnerving. Perhaps, the only constant we are sure to confront in the otherwise unpredictable future is the reality of accelerating changes most of which are severe and stressful. And to cope with them the business world is brimming over with promising, innovative ideas about management, work, products, processes and with new tools to make better use of all these. The executives are constantly reaching out for solutions, hoping to find the one, preferably quick, simple and cheap, that will solve their problems for good. While the new ideas are destined to combat with the old, new emphasis and trade-offs will set in to focus all attention on profits. The companies will all have to adjust to the new realities - to the needs of their employees, customers and communities, to the new technology, to the global markets, to the demands for more speed and innovation and adaptability. And the organisations might respond by:

I. Reshaping the way business views people, including the customer, the leader, and the employee
II. Using the new tools they have in information technology, innovation, speed and quality to combat the turbulent changes.

I. Reshaping the way business views people

A. Wooing the customers
Corporations are going to extraordinary lengths today to woo the customers and to cater to their demands. While the whole company gets aligned with the customers, the top executives are busy creating quality time to be with the latter. The means of wooing their customers include - finding them, understanding them, defining their needs, suiting their products to those needs and providing a degree of satisfaction consistent with making healthy profits. And all these functions have become radically more sophisticated and effective. Mainly because of the new information technology, business now has more sophisticated means to segment the market, mine data, mass customize, promote brands and create new channels with more knowledge and precision than ever before. For instance, the American Express still has its 100-year-old offices in Paris as well as 1700 other travelers' offices the world over where lost tourists can go for help and reassurance. However, the way American Express handles bills and sells to the travelers is changing drastically because of the information technology. The company has broken its business down into three customer groups: the ordinary traveler, the corporate customer and the merchant. It also uses its regional information systems to mine data, to segment the market more finely and to focus more clearly on particular types of customers. (See Box One: Making customers a part of yourself)
Though the good brands have an extraordinary staying power, they can slip if the owner does not maintain their particularities and match them with the needs of the defined and reachable group of consumers. Lets us consider the instance of Alfred Sloan, father of General Motors, who understood the importance of brands and market segments when he promised to offer “a car for every purse and purpose". Out of an apparent confusion of overlapping models, Sloan created an orderly progression of models, each with its own price range that just touched but did not overlap the next model up the scale. General Motor's attempt to woo the customers included cost reduction, innovation and an excellent management of brand.

Making customers a part of yourself Key points: * Having the right compensation and evaluation plans to encourage employees to serve the customers better * Training the employees well * Extending team approach to deal with customers * Allowing customer reach into the information system of the firm to place an order or to check the status of a given order Ask thyself * Is the company organized enough to face the customers and to handle its markets? * Do the top executives know the customers and deal with them? * Does the company look forward towards achieving a dominant position in key markets by meeting the customer requirements? * Does the company have the right information technology to know the market and to serve the customer? * Does it examine the entire relationship with customer and not just the quality of the product and service? Cautions * Is the company making improvement that adds no value in the customer's eyes? * Is the company offering too many updates, variants and options that are irritating its customer?

The power of Information Technology changes the nature of marketing. The computer- dependent market segmenting and data mining make it possible for companies to know their customers better and to focus their marketing more effectively. Entirely new markets such as electronic trading, shopping channels on TV, sales through the Internet are arising out of the information technology. Market place is being replaced by market space. However, in many a case, the new market space created by cable TV and the Net has generated more excitement than revenue. Big companies such as Time Warner, AT & T and MCI Communications corporation discovered that money pours out through the Net easily but does not necessarily come back. However, some smaller companies like Amazon.com, an online bookstore with access to more than a million books, have found a profitable place in the Internet.
Thus turning to face the customer has profound effects on the whole of the company, beyond the restructuring of the company itself. When the auto companies use the customers to help design their cars, when FedEx gives a customer direct access to its computers to order a pickup or to track a package, the customers may be considered to be absorbed into the company. Thus, as the organization gets closer to the customers and becomes more responsive to their needs, the latter, in a way, become an extension of the company.

B. Redefining the leader
Leader is the charismatic hero; the tough guy who snaps out decisions and the loner who does not need help. However, since the organizations are changing rapidly and so are the people, the old model of leadership is fast losing ground. People are now better educated; more assertive, more willing to make up there own minds. The hierarchical, stable organization which may well have required an authoritarian boss, is adopting a flattened, flexible structure which evidently require a different type of a leader. (See Box Two: Making of a leader) However, the age-old characters of good leadership that have stood the test of time are courage, authenticity, integrity, vision, passion, conviction and persistence.
The prominent shift seen today is from leadership by command to leadership by vision and example. Rather than being remote and analytical, the CEO today needs to have values and a vision and he ought to be seen to live and work by them. He should be collaborative and helpful, as much concerned with human beings as with numbers.
John Smale, who served as the CEO of Procter & Gamble and, later, as chairman of General Moors board, defines corporate leadership as shaping the vision and then ensuring that the organization has all the intangible as well as the tangible qualities needed for everyone to pull together and attain and preserve the vision. And the vision requires a statement of distinctive competence, a reason for being in business and a reason for customers to buy from the company.
The most famous set of corporate values that frame the vision came from David Packard and William Hewlett. The values they instilled at Hewlett Packard are still fundamental to the company and “the HP way" has gone through various interpretations that can be summarized as follows:

Making of a leader * Sponsoring training that can help produce executives who lead by example and by values * Having appraisal, promotion and compensation systems that reinforce leadership by example and values Ask thyself * Is the leadership of the company going through a basic change, from leading by command to leading by examples and values? * Is the leader articulating a believable vision that can be achieved? * Is the CEO reinventing the corporation for the 21st century and reinventing his own role? * Does the leader's behaviour embody company's values? * Are the leaders' human skills as well developed as their intellectual skills? Forewarming * Does the company still adhere to the fundamentals of good leadership that did not change? * When necessary, can the CEO still take rapid, decisive and unilateral action? * Is there room within the new framework of value-based leadership for individual styles?

* We have trust and respect for individuals
* We focus on high level of achievement and contribution
* We conduct our business with uncompromising integrity
* We achieve our common objective through team work
* We encourage flexibility and innovation
A business leader should have enough eloquence and force of personality to sell the corporate vision across the company and those may be innate, unteachable qualities. And many of the successful CEOs have believed in developing leaders very seriously. For instance, in GE developing leaders begins with a leadership conference for new hires followed by three advanced training courses held at Crotonville. And Jack Welch, personally, puts in an appearance at most of the courses. Companies of the 21st century need leadership in depth because if it is going to spread responsibility and power through out, then it shall need many leaders. Not just one.

C. Treating employees as disposable assets
Continuous creative destruction that characterizes and strengthens a free enterprise is an absolute necessity during restructuring. And this brings along with itself an intense pain as well. It is the visible unfairness of the layoffs that makes “reengineering" difficult for the corporate society and torturous for millions of workers since it began in the early '80s. (See Box Three: Dispensing off employees)
When the richest and biggest corporations with highest paid CEOs make massive abrupt reductions, they draw unfavourable attention or humanitarian questions. On top of the morale problem, there is evidence that downsizing to reduce cost has, for the most part, not helped business results of the companies that did it. Neither has it put the remaining workers in a state of mind to contribute to the work or to have the right initiative, quality, team effort and loyalty necessary for success of the enterprise. Not surprisingly, surveys of employee morale and opinion reveal a serious problem in the companies who are downsizing to their bones.
In the 21st century the enterprises, on one hand, need the willing help of intelligent, motivated, collaborative and enterprising people. And on the other, the efficiency of technology and new management approaches make it possible to work better with fewer people. Thus the business would today face an unprecedented dilemma and firms from different regions of the world handle this differently. The Japanese firms choose to achieve efficiencies by simplifying their products by restructuring, by “value engineering" but not by wholesale staff cuts like the American companies.

Dispensing off employees Key points: * Limiting restructuring of the firm to the sole function of downsizing * Having a believable appraisal system which can help identify candidates for dismissal without creating a sense of unfairness * Planning training for survivors to help them improve their performance and cope with new responsibilities Ask thyself * Have you stressed on getting rid of unnecessary work rather than getting rid of people? * Does the restructuring include the participation of people whose work is to be restructured? * Have efforts been made to resolve the conflict between becoming more efficient and competitive, on the one hand, and treating people decently, on the other? * Do you treat people generously and with dignity? * Have you tried to avoid harsh or sudden departures? Forewarming * Is there an obvious gap between the generous treatment of the executives who caused the restructuring and the treatment of those who lost their jobs? * Are you trying to create some sense of belongingness, security and loyalty? * Before choosing restructuring which is often disappointing, have the other growth strategies been considered as an alternative?

However, the Japanese employers have begun to waffle on their commitment to lifetime employment. The European firms are also reexamining their whole social contract, under the severe constraint of high unemployment rates. In Germany, especially, but in France too, layoffs have become part of the restructuring business. The social contract promising lifetime employment has become too much of a burden for the employers. American corporations have more freedom to rewrite the implicit contract with their employees and as a result are more free to make the changes needed to compete.
What corporations are offering in place of security is employability that allegedly puts every person in charge of his own career. The company gives you a good job, pays you well, keeps you up-to-date with training and then you and the company part without regrets when you are no longer needed. Being well trained and self confident, you quickly find a new job. The philosophy not only suits the new enterprise, but it also suits the new employee, better educated, less tolerant to authority, less willing to submit to ties of loyalty and more willing to make the decisions the boss used to make.
Unless they are fighting for survival in which case a quick amputation may be the only choice, companies should be able to deal with people decently in a way that does not shatter their lives or company morale. They may even be able to preserve the lifetime contract with modifications. And there are enough examples of a more human approach to show that it is possible. For example, Corning Incorporated, having revived its fortunes in the 1980s with a fierce effort to improve quality, decided after a slump in 1993 to reengineer massively. And before laying-off employees, Corning took the following steps progressively:
# Use slack time to train workers so that they would have skills to make themselves employable
# Ask temporary workers to leave
# Introduce partial shifts
# Share jobs by working half days
# Think about pay-cuts
# Help employees get other jobs or get relocated
in another corning facility
How well a company handles this issue affects not only those who leave but also the performance and morale of the survivors.

D. Empowering employees
Of all the management ideas that fit the 21st century enterprise, the one with the longest and the most checkered history and the one that has proved the most difficult to execute is the idea that the employees should have the power to make significant decisions. The early employee involvement efforts faltered due to failure to:
* Train workers to work in teams, to focus on important issues, to deal with team mates and to achieve the right results.
* Train the middle management to be team-oriented
* Provide direction; without the right leadership or a corporate vision or a set of goals and priorities, the teams faltered
* Follow up the response and result
* Reward team effort
Experts opine that teams need to have some basic attributes for success: clarity of goals, good communications, training in business objectives and a strong commitment of the company. (See Box Four: Encouraging teams & empowering people)
While most of the companies were thoroughly committed to more power sharing, they were not good at creating the conditions for sharing power. And for effective participation, employees need information about the company, sufficient training, encouragement with compensation for their performance and a feeling of security. The employers hardly did anything to give more information to the employees, training increased only moderately and performance pay either for individuals or for teams increased little. Nowhere are the responses more diverse than in the manner of giving more power to the employees through various types and levels of teams and through new incentives and policies on hiring and evaluating employees.
Motorola did not have to make a clean break from its old culture when it decided to take up teams on a big scale. People of Motorola already had a sense of self-mastery because most of them had never seen a time clock and they were encouraged to go around the bureaucracy to solve problems, And when Motorola began to encourage teams it adopted a different attitude altogether. Most of the teams were self-forming, they picked their own members, chose (or decided not to choose) their own leaders; they were not compelled to register with the company or report the results of their work.

Encouraging teams & empowering people Key points: * Sharing significant business information with employees * Realigning appraisals and rewards so as to recognize team performance rather than only individual performance * Training to become pervasive in the company Ask thyself * In this age of knowledge worker, do you decide to treat the employee as an asset or a cost? * Do your teams get coaching and training so that they learn how to act as team members, know how to solve problems and to motivate others? * Do the teams matter to the corporate leaders? Do they pay attention to the teams' ideas? * Do the leaders convey a strong sense of the corporation's purpose so that the teams can focus on what matters and not drift into irrelevant work? Forewarning * Do you realize that for some purposes hierarchies and top-down decisions will still be needed? * How can you preserve valuable functional expertise that may be lost as employees become immersed in cross-functional teams? * Do you realize that the team approach may not be the right one for everybody and for every occasion?

When Corning started using teams, its chairman Jamie Houghton opined that the union people thought that empowerment means taking coffee breaks anytime they want. Workers and managers alike resisted the idea of accepting more responsibility. Making decisions on their own scared all of them alike. Houghton, however, found that it took some discipline, some toughness and some persuasion to get the teams focussed, to encourage the frightened and to see the plant managers were reborn or removed. All that worked and teams are what that make Corning work today.
In a number of renowned organizations, a person's performance appraisal and pay depend on his contributions to team efforts. At Microsoft, for instance, appraisals take into account adherence to the company values, one of which is teamwork. And the employees are offered cash bonuses or stock options as a reward. GE has also added adherence to values to the criteria used in appraisals and those values include the ability to work with teams.
With the concept of empowering teams coming up in a big way, it may seem contradictory, but employee power is not likely to work without a committed leadership of one sort or another, whether that be the chief executive, the team leader or simply an explicit and consistent corporate policy.

II. Using new tools to combat

A. Gaining mastery in information
The CEO of Xerox, Paul Allaire, firmly believes that the technology outstrips our ability to see it effectively. Thus the focus of discussion has shifted from the wonder of it all to a rather sober and sometimes anxious discussion of what information technology means and how to handle it. (See Box Five: Acquiring expertise in information)
Beyond the sheer difficulty of adopting information technology on a large scale, huge strategic and management problems come along with it. When computers start to transform an industry so much that totally new kind of players may appear, when the shape of that transformation is unpredictable, when betting on the wrong system or technology can be devastating, then business leaders have sure reasons to agonize about information technology.

Acquiring expertise in information Key points: * The information system of the firm and its structure, power relationship, careers, pay, training, and skill should be aligned with each other. * Since the number of people and the skills needed in information technology change rapidly, outsourcing of computer operations can be considered as an alternative Ask thyself * Does the information system unify the whole organization, connecting activities from the supplier through to the customer? * Is the information system centrally managed and compatible through- out? * Has the information system been designed by those who are going to use it? * Is the information network widely accessible and as easy to use as possible? * Does it capture the information you need to segment the market precisely? Forewarning * Future technology is becoming increasingly unpredictable so even the brightest experts find it hard to know what to do next * The scope and the cost of the new information systems are so huge that the choices may involve bet-the-company risks. * The biggest obstacle to installing information systems in a company is the way people work and the way companies are organized.

From today's business scenario it is now evident that the impact of computers on business is enormous and inescapable. The number of computers in the world grew from half a million two decades ago to 200 million in 1996. And the number of internet users are doubling every 53 days. To anchor these celestial figures to real business, let us consider the case of SAP, a company founded in Germany by five refuges from IBM in 1972. Since introducing its R/3 client-server application software in 1992, SAP has leaped ahead to become the number one provider of employee networks that connect almost all business activities. It helps in a seamless flow of information that goes from the supplier and from the shop-floor up to the boardroom and out to the customer.
The new information technology gives birth to massive changes and innovations and, at times, also to new businesses. Some of the examples are as follows:
* When two giant drug companies, Merck & Company of the United States and Astra AB of Sweden, formed Astra Merck, a marketing company in the USA, they banked on the revolutionary Information Technology to develop a worldwide communications structure and to share experiences, resumes, credentials, techniques and also confidential client data to better the status of general health. Equipped with valuable data, Astra Merck went ahead to provide not only instructions but also information about matters unrelated to its own drugs that a hospital, doctor or a patient might need. Thus providing their customers solutions to all sort of health-related needs and assisting them to deal with problems, Astra Merck now declares itself as an information company that also happens to sell pharmaceutical products.
* Levis Strauss & Company makes a highly visible use of Information Technology by mass-customizing jeans for women. Customers can go to one of the company owned Original Levi's Stores where a sales associate takes four measurements and enters them in a computer which recommends a prototype jean. Once the measurements are entered, they are flashed by the modem to the company factory in Mountain City, Tennessee, where lasers automatically cut the right pattern and operators stitch the jeans together. Delivery is guaranteed in three weeks.
* Wells Fargo & Company closed down 100 conventional branch banks and replaced them with one/two-person branches in supermarkets and with remote electronic banking in partnership with Microsoft and Intuit. The company asked its clients to use telephones, computers or ATMs instead of coming to the banks. It developed algorithms so that loan officers can approve small business loans over the phone in minutes - and these loans can be made even from places where there is no satellite office. Now the company can boast of successful running of several thousands of “cyberaccounts" all around the world.
Thus, as the information revolution is growing, it is creating new products and new businesses. It is creating new markets and revealing markets that were hidden before and is allowing us to mass-customize products, to design them faster and better and to produce them more efficiently. It spreads useful knowledge through an organization and allows the customers and suppliers to share it. And the successful deployment of information technology has become the central business strategy of the times that changes everything we do.

B. Encouraging innovation
Companies are in the grip of a frenzy of innovation. The Hewlett-Packard Chief Executive, Lewis Platt, says that the life cycles of new products last only nine to eighteen months while a decade ago it used to last for years. For example, Hewlett-Packard and Intel cannibalize their own products by bringing out new versions of them within a period as short as six months. And at Corning, 75% of the flat panels of TV and computer screens sold in the previous year was not sold again next year. To innovate successfully, a firm needs the following four points viz. spirit, resources, methods and organization.

Spirit
Spirit is, doubtlessly, the seed of innovation that justifies the birth of several great companies in garages, basements, spare rooms and workshops. From the Wright brother's bicycle shop in Dayton, Lemy Grumman's workshop on Long Island and founders of Sony working around benches in a leaky shade to Hewlett and Packard's garage in Palo Alto and Steve Job's family garage in Cupertino, spirit has remained the primary driving force behind innovation.

Resources
Along with spirit comes the willingness to support innovation. And of recent the resources for innovation are under fire. Reengineering and cost-cutting has started hurting research and development. The corporate world sees a stagnation in the industrial spending on R&D. And in many a case labs were closed or shrunk and researchers laid-off.

Methods
To improve the chaotic process of innovation new approaches have been deployed. And the new approaches to innovation are much like the new lean methods of manufacturing. The team approach to R&D is, perhaps, the most important of these tools. Now, instead of having engineers work in isolation on a new product, the team includes manufacturing people from the start, as well as people from marketing, suppliers and so forth who can contribute when it counts most, near the beginning.

Organization
The most difficult and controversial part of innovation is how to keep the spirit alive in
large organizations. The innovative environment is always dynamic, opportunistic and unpredictable. The most innovative organizations use some form of small teams with extensive networks on ad hoc basis, do not rely on any form of standardization for coordination and avoid all trappings of bureaucratic structure. Purposeful innovation comes from an organized discipline that is both teachable and learnable. Every organization of today has to build into its very structure the management of change. Here are the examples of some companies who have mastered the art of innovation.
* The culture of 3M nurtures both kind of innovation, incremental and breakthrough. Among a number of novel management practices, at 3M engineers are encouraged to spend 15% of their time working on favourite idea, regardless of what their assignments be. Encouraged by all these, common employees have come up with brilliant ideas. Richard Drew, a young technician, kept on working on masking tape until he created a product that turned out to be one of 3M's most successful products. Post-it notes were invented by an engineer which later proliferated into 56 shapes, 18 colours, 27 sizes and 20 fragrances. Several rivals tried to copy the idea but in vain. After having created a new product, 3M does not surely stop there. It uses the product to create a platform for a whole family of new products. Thus the open collegial atmosphere of 3M promotes innovation and allows ideas to migrate into different parts of the company.
* Having a carefully nurtured culture that encourages creativity, Hewlett-Packard is enormously innovative. Keeping the entrepreneurial spirit alive, the CEO Lewis Patt makes sure that centralization dos not creep into its system and slow down people. The company has evolved policies that clearly get the most out of the 7.3% of company revenue that it spends on R&D. HP learnt that the critical part of a successful development project comes right at the beginning when the product is defined. The description begins with ensuring that the product fits the organization's strategy, looks at the customers' needs, confirms that the company has the necessary skills and so on.
Bureaucracies in large and famous companies are often found to stifle innovation and make the system incapable of exploiting their best ideas. In the late 1980s Xerox realized that too many of the great ideas coming from Palo Alto Research Centre were being used by others because Xerox failed to see their potentiality. According to their Executive Vice president, Billl Buehler, their scientists had invented the laser printer, the local area network, the PC and the mouse. But it was the likes of Steve Jobs and Bill Gates who actually saw their potential and sold them successfully in Macintosh computers and Microsoft software. (See Box Six: Promoting innovation)
The tension between the contradictory needs of nurturing creativity and following a structured process is something that no innovative company will probably ever resolve. Managing innovation is a tricky process and the sources of creativity cannot be pinned down to a formula. A corporation needs to keep its eye on the following seven innovation activities:
1. Research & Development on forthcoming products
2. Support and extension of current products
3. Fundamental research related to strategic goals
4. Development related to strategic goals
5. Internal infrastructure of research labs
6. External R&D relationships through joint ventures and partnerships
7. Blue-sky inventions that may come of inspiration of genius

C. Speeding up
Business leaders are simply fascinated by the power of speed. Andy Grove of Intel would make speed the governing driver for a company's activities. Jack Welch keeps referring to speed in his well-crafted letters in the GE annual reports as one of the behaviours that define GE. Thus, speeding up, according to many, is the name of the game. But the effective approach to speed is not to hurry up or to skip important steps, but to get there sooner by eliminating waste and improving processes. In fact, the most important thing about speed is not necessarily to work faster but to learn faster. In high-tech industries, tougher competition, faster technological change and shorter product life cycles are all working to pressurize business to work faster. (See Box Seven: Accelerating the pace)

Promoting innovation Key points: * Innovation is not just the concern of development engineers, but also of manufacturing, marketing, sales, legal and other departments * The costs, scope and risk of innovation today will often require partners, joint ventures and consortia Ask thyself * Do you have culture that nurtures innovation, gives people the freedom to follow good ideas and encourages a healthy flow of information around the company? * Do you assign your development projects to teams that include people from marketing, manufacturing, finance and other parts of the company? * Do you make sure that your customers and your suppliers contribute to the development process? * Are you developing platforms of new products which can be the basis for a family of extensions? Forewarning * Innovation needs to be on the leading edge of technology, but not ahead of it. * Innovators will always have to resist the calls of short-termers to switch spending to things that will pay off immediately. * R&D needs to be well-organized, but not bureaucratized.

In the present era, information technology has made speeding up of the entire process possible. Companies now have a clearer idea of what is happening all along the line and can integrate their supply chains. Detailed point-of-sale information, created automatically at the checkout counter, flashes right back to the plant and to the supplier so that they know from day to day what is selling and what to replenish. New standardized bar codes, advanced shipping notices for overseas shipments, pre-clearance through customs have all helped to speed response. Speeding and synchronizing the whole supply chain makes economic sense because the cost of storage has grown faster than the costs of transportation.
Speed has now become a platform of competition. For instance, the auto companies use speed to compete on three levels: a) how fast they can develop a new model b) how quickly they introduce new models and c) how quickly can they deliver the car when the customer orders it. Before speed became a competitive as well as a cost and quality improvement strategy, it took 26 days to deliver a Toyota and 45 to 60 days to deliver a Ford. Slow distribution and slow information handling caused most of the delay. Now Toyota takes two days or one day to build a car and Ford has converted most of its plants to 24-hour assembly. Batter information technology gets the customers' orders right back to the assembly plant and beyond to the supplier - so the car and the components are pulled through the system.

Accelerating the pace Key points: * Need to know how to learn quickly if it needs to move faster * Need for workers who are prepared to make decisions; a long chain of commands is obstructs speed * Efficient Information Technology, linking the company from customer to supplier, is essential to a lissome corporation Ask thyself * Are you trying to make all your operations move faster, rather than only the obvious ones such as manufacturing and product introductions? * Are you using speed to create value for your customers and to differentiate your products or services? * Are you able to anticipate market demand so as to be ready to serve the demand as it rises? * Have you made your production processes as flexible as possible to adjust rapidly to changes in demand? Forewarning * Speed as a management tool should not equate with haste. It means removing waste motions and simplifying products and processes to get there faster. * Speed achieved by shortcuts and lower quality will hurt more that it will help

Speed properly applied has profound effects up and down a company and has many applications. Speed can be applied to decision making and can even involve the customers. If the company wants to be agile, decisions need to be taken faster and that means distributing power to push decisions as close to the market as possible. When the company has a new product, achieving peak sales and getting maximum market penetration quickly are both important.
However, speed must be treated with caution because it can have unintended results. A study conducted by Mckinsey specifies that speed is not equally helpful to all products and to all industries. In industries where products change slowly (such as toys) it is of less advantage. Speed achieved by shortcuts and lower quality will hurt more than it will help. The customers may also get fed up with too many updates, model changes, savings plans and alternative choices. And acceleration has its limits as well. It cannot be infinite and at some point it may make more sense to look for other ways of expanding business.
Management has clearly acquired an enormously powerful weapon in the idea of speeding all it processes. Like quality improvement, speed works in ways that are counterintuitive - at least to conventional thinking. Historically, business has said that if the customer wants a better quality or if he wants it faster, it is going to cost him high. What business has now learned is that the quality and speed in fact cost less and support each other. And being quick does have limitations and risks that may in the future limit its usefulness.

D. Obsession with quality
In the present era quality ought to be an obsession for the sake of survival for any business. Management practice today says do it right the first time, rather than achieve quality by inspection and correction. Quality should be defined by the customer rather than by technical specifications. Stretch goals are to be set far beyond what used to be thought possible. Rather than working in secret isolation, activities should be benchmarked with other companies to see what one can learn. The concepts to be reckoned with to improve quality in the present era are that of cross-discipline teams, pushing power downward, working faster, better training and a new role for leaders. (See box Eight: Redefining Quality)
The best performers of quality have set themselves extraordinary goals, achieved them, and then even set more difficult goals. Motorola is, perhaps, the most famous example. In 1981 when Motorola started its quality drive it set a reach goal of reducing defects tenfold in five years. That was not good enough, so Motorola decided to improve another ten times again by 1989 and then ten more times by 1991. That would have brought Motorola's defect rate down to about eight in one million parts. (Quality has improved so much that defects are now normally measured in many companies like Motorola in parts per million rather than in percentages.)

Redefining quality Key points: * Unless the company is making many of the other improvements like speeding processes, innovating products, making good use of teams, quality improvement alone will not get too far. Ask thyself * Is the effort to improve quality focused on what matters to the customer? * Do you periodically revise your targets upward to meet the rising expectations of customers? * Do your pay and incentive plans encourage people to improve quality? * Has the top management demonstrated a long-term commitment to improving quality? Forewarning * The quest for quality never ends * The search for excellence will need refreshing after a while * The quality expert may try to smother a company in tools and try to create a bureaucracy that will spoil the broth

GE has a long history of involvement in quality improvement. Jack Welch always thought that with his constant focus on the three ‘S’s viz. speed, simplification and stretch, GE would achieve the world class quality standards. The legendary CEO is of opinion that the actions or ideas like the teams, the boundaryless company, delayering and training would embed quality into the company's activities. But GE did not have an explicit policy labeled total quality management or something similar.
Unlike GE, Xerox made quality the centre of its strategy. It introduced a model known as “leadership through quality" which worked well. And when it matured, Xerox saw that it needed refocusing and refreshing. The new “Xerox management model" was intended to apply more discipline to the use of all those tools and to increase Xerox's speed, not just at turning out products but at making decisions. The company aimed at focusing Xerox's quality efforts on two critical objectives viz. profitable revenue growth and world class productivity. The rather formal elaborate structure of the new “Xerox management model" assigns each of Xerox's quality tools, initiatives and activities to six business practices: leadership, human resources, business process management, information utilization and quality tools, customer and market focus, and business results.
Without discarding the old concept of quality, with its stress on metrics and management processes, Hewlett-Packard was going beyond it to learn more about the experiences of the customers. The standard “producer" approach to quality, with its faith in “conformance to requirements" and “fitness for use", are natural to a high-tech company like HP where engineers build sophisticated items for use by other engineers. Instead of being so absorbed with exciting evolution of technology HP had to think more along the lines of how an organization creates an impression on its customers. HP found that customers had strong emotional reactions to things that did not seem important to the company.
Companies across the world show an acute diversity in dealing with quality. However, the same basic themes underlie each company's actions: the insistence on measuring results, setting goals high enough to make every one gulp, the use of cross-functional teams, training people in the use of tools, spreading quality practices throughout the business and into all of its activities, always looking for new ways to improve. Far from being a stale fad, quality improvement is becoming embedded in business. It is part of the price of admission to the market.
The companies who are dynamic, integrated, effective and responsible will survive the turbulent changes of the 21st century. The rest shall wither away. The newly groomed enterprise will not carry us into a corporate utopia. Business is going to be stressful, risky, and uncertain, possibly even more than it is today. The new ideas with which the business world is already deluged will not necessarily drive out the old. Adopting new characters will not mean boycotting the old ones. For instance, hierarchies will not vanish altogether in team-driven flattened organisations. Teams will not be all powerful. Organisations cannot become totally global and ignore local and regional factors. They cannot become altogether cross-functional and let go of functional excellence. Thus, rather than a complete shift, there will be a change in the balances here and there. And organizations, each in their unique way, will be a mixture of the old and the new, the balance varying from company to company depending on the leader, the industry and the market scenario.

The above article has been condensed/extracted from select chapters of Driving Change by Wind, Yoram, Jerry and Main, Jeremy published by Kogan Page Limited. All rights of the authors and publisher are reserved.