Unbounded Economies Pose Challenges To ‘GLOBAL’ Firms

WHAT do San Miguel Corp., Jollibee and Ayala Corp. have in common? To cite a few, they all are profitable, reputable and excellent in customer service. These qualities propelled them to the list of 15-most admired companies in Asia. More than these, they were cited because they have gone “global,” an achievement which only a few Philippine companies have so far been able to achieve. The list, made by Asian Business, a Hong Kong based magazine, is based on responses from various business leaders in Asia.

In this emerging era of “boundary less” economies, being able to compete in the global market indicates that an organization has achieved world-class competencies: So, can these companies be considered therefore as “world-class organizations”?

To answer this question, we can perhaps look at Ken Blanchard and Terry Waghorn’s new book, “Mission Possible: Becoming a World-Class Organization While There’s Still Time“. The authors defined a world-class organization as one that is working effectively on the present and the future of the organization at the same time, and learning from both.

This definition may have arisen from the bitter experience of many US companies who used to be the global economic giants of yesteryears but are now vastly diminished organizations of the present. Stressed out with fast-paced technological advances and shaken by the emerging strength of rapidly growing economies in Asia and Latin America, these companies have experienced that what succeeds now could be useless tomorrow, that what is state-of-the-art today could as quickly become obsolete the day after and that stiff competition may come from companies in small nations.

There are many evidences of this phenomenon. Goods made in Asian and Latin American countries are flooding US department stores across states. Downsizing of US companies have caused widespread unemployment and employment instability: American management gurus are looking to the East for answers on how to compete more successfully not only in the global market but even in their own home front. These Third Wave changes, as predicted by Alvin Tofler, are spreading swiftly and surely across the globe.

In this scenario then, the Blanchard and Waghorn definition of world-class, takes on a new meaning for companies-and nations-throughout the world. For the giants, it may signal doom; for the struggling organizations, hope. Change, in the world global economy, is indeed a great leveler.

In this arena, can Philippine companies and the Philippines, as a nation survive, compete and flourish? To a limited extent, we have apparently done so. Encoded in the San Miguel, Jollibee and Ayala experiences may just be the program for the success of Philippine companies, and the nation eventually, in the world market.

Meanwhile, Blanchard and Waghorn’s model for becoming world-class is worth considering. They write that an organization has to consciously work on the present and the future at the same time. They term this as “redesigning the sandcastle” and “taking the high ground“. These are truly appropriate terms as the waves of change constantly break down the sandcastles of present organizations and taking the high ground represents the only way to continued existence. Doing both these things literally is difficult enough, as children playing on a beach are likely to find out; doing both these things metaphorically in an organization is a delicate balancing act

Blanchard and Waghorn state that becoming a world-class organization requires revolutionary and evolutionary change. The former involves a 360 degree upheaval; the second an almost imperceptible coming into a new being. In the words of a once admired Chinese philosopher, a revolution is not a picnic. Those who want success must have the strength of character to pursue it.

The authors prescribe a method for doing this revolutionary balancing act. They advise organizations to actually divide their people into two teams: one would work on present concerns (the P Teams) and the other on future concerns (the F Teams).

The P Teams will work on improving present processes by studying the customer, the competition and the company. They will analyze why customers buy what they buy; why competitors succeed; and how technology and relationships within the company can be improved.

The F Teams will do scenario planning. They will try to visualize their customers of the future, anticipate what may be the new rules of the game or competition, and identify what the company needs in terms of strategic capabilities to compete in this future environment, including competencies of the employee of the future.

The book further proposes as a benchmark for organizational practices the concept of “The Three-Legged Stool“. The three legs represent raving fan customers (customers who are so delighted with the service that they rave about it), committed and empowered employees (employees who act like owners, meaning responsibly and dedicatedly); and financial success (being able to “wow” the customers without giving away the store). These three legs should be held together by the seat of integrity (the organization should do what it preaches) surrounded by an environment characterized by continuous improvement (in short, kai-zen).

The book also contains a crash course on managing a World Class Organization (MBAs can throw away their outdated books, everything you need to know in business you will not learn in MBA). It walks the reader through the steps in “redesigning your castle” or reorganizing the company starting with pondering on its purpose, core goals and core values; reviewing strategy, structure, systems and business procedures, and determining the kind of people, skills and culture needed.

The book ends with a chapter (“Do I Have What It Takes?“) inspiring the reader and leaders to create the world-class organization. This chapter reveals the “soft” side of the authors. They write that the real work of a world-class organization is service and that creating it is really a matter of releasing the magnificence in people. They further state that to release the magnificence, one must give unconditional love. This kind of talk may well be just motherhood statements to Wall Street type businessmen. But this theme would have been appreciated if it were fully explored. It would have provided soul to a book that answered the world-class challenge with more technology (the how to’s).

Blanchard is the author of the successful book “The One Minute Manager,” published in 1982. He is also chair of Blanchard Training and Development lnc. and a visiting lecturer at his alma mater, Cornell University. His other best selling books include “Empowerment Takes More Than A Minute” and “Raving Fans“. Waghorn is a senior fellow of the Nolan, Norton Institute, a business strategy think tank. His expertise is on organizational transformation.

Blanchard and Waghorn, being management consultants as well as authors, have apparently applied the concepts discussed in the book with success: Can these same concepts apply with equal success in Asian, or even Philippine, companies? l can only respond with a grin (meaning, I don’t know). Will San Miguel Corp., Jollibee and Ayala Corp. please answer this?

Author: Regina Galang Reyes. First published in the Philippine Daily Inquirer June 9, 1997

Photo credit: www.sxc.hu

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