Eric makes the following case.
As I see it, a commercial organization consists of two coupled
macro-processes. The first one takes (monetary) input from investors and
returns monetary value to them. The second takes input (money and ideas)
from customers and returns value (products or services that meet their
needs) to them. The second process is the "engine" that drives the first
one; the value that one provides to investors is created by providing
value to customers (*not* taken from the customers; in a market economy, a
transaction can actually create, rather than move, value if A and B each
have something that the other party wants more than they do).
Many of the problems that American businesses are experiencing are caused
by a failure to realize that the two processes are in fact coupled, and
that the second process is the driver. Too many managers have been taught
to act as if the first process (return to investors) is the "real"
company and the second process (serving customers) is just a secondary
nuisance. But the first process *cannot* happen on its own; it needs an
input of "energy" from the company's operations. The stereotypical
American company starts with financial goals and expects to meet them
without operations doing anything other than "business as usual." The
stereotypical Japanese company starts with operational goals, develops the
operations to meet them, and expects that the financials will follow.
== end quote ==
To the extent that this model is at work, an important reason why
businesses respond as they do is that the financial feedback short term
and insistent. Customer service feedback is long term, irregular, and only
indirectly connected to each micro action of a company representative.
Financial feedback is daily, weekly or at most monthly, and it is very
direct. The feedback mechanisms create the focus for our work, and in
this case the financial feedback has more visibility and thus more
leverage. If we want to change the situation, we need to either revise
the feedback mechanisms, or provide managmenet direction that weights
things differently.
Stockholders are often blamed for these situations, but the data shows
very clearly that stockholders rarely interfere with management, even in
companies that perform at a mediocre level. Therefore, the opportunity
rests with management to change the priorities.
--Rol Fessenden LL Bean, Inc. 76234.3636@compuserve.com
Learning-org -- An Internet Dialog on Learning Organizations For info: <rkarash@karash.com> -or- <http://world.std.com/~lo/>