Views from the Hills by R. E. Stevens, GENESIS II (The Second Beginning) E-Mail

Today vs. Yesterday and on to Tomorrow

In three separate talks that I have been giving, I refer to "A Model of Highly Effective Companies."  Within these talks I describe an operational model that seemed to be present in every effective company I have seen.  Actually I should refer to models because I use slightly different models depending on the audience and/or the topic of the presentation.  For example, I may split the Products Research category into two:  brand improvement and new products.  Or, I may split Marketing into two categories:  general marketing and market research.  However, the basic model is as follows:
These models seemed obvious when comparing the more effective companies with the other companies.  That was yesterday.  Today I am seeing more and more of the effective companies making some major changes in the way they do the day-to-day business.  For example, at Procter & Gamble, the company where I spent 40 years and was taught what little I really know about business, announced that they had sold the Ivorydale Bar Soap Plant to a Canadian Company.  The Canadian Company will continue to make Ivory Bar Soaps and other brands for P&G.  Of all the buildings and manufacturing facilities at the Ivorydale location where I spent over half my life, today, P&G only owns two of the buildings in the entire complex.

What does this do to the model and my concept of Highly Effective Companies?  Immediately I see it affecting the model in two areas:  Production & Quality Control.  I have no doubt that in the operational analysis, P&G found that there is a substantial savings by sub-contracting out the business related to manufacturing facilities, personnel and production.  But at what expense?  Quickly I can see a loss in product knowledge and product quality.  We also do not have the flexibility in working to reduce manufacturing improvements & costs, experimenting with brand changes and insuring brand quality.  Yes, we can specify quality measures, but how are they enforced?  When you are planning brand upgrades, who handles and pays for the EOs (Experimental Operations whereby changes are evaluated using real manufacturing equipment)?

Having grown up in the OLD way of doing things, I have trouble understanding the value of the new modern innovations in business.  We have already seen many companies sub-contract their sales force.  We have seen many companies sub-contract their marketing and consumer research.  We have seen many companies sub-contract their product research.  We have seen companies sub-contract their accounting.  What is next?  A corporate office that houses a telephone that is automatically answered and you are directed to punch a specific set of numbers depending on your reason for placing the call?  A computer that makes a management decision and forwards the answer to the appropriate sub-contractor.  We had one thing yesterday and now we have another today, maybe the above will be tomorrow but I'm certainly uncomfortable with the thought.

Sponsor:  Sorensen Associates Inc      Portland, OR  800.542.4321        Minneapolis, MN  888.616.0123
The In-Store Research Company

[Back] [Index] [Forward]