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Sunday, January 09, 2005

Adaptive Enterprise : Sense Early & Respond Quickly

I read the book - Adaptive Enterprise(published few years back)
written by Stephen Haeckel over the weekend. Written in a lucid style, is a good read. Amazon's review pretty much captures the essence of the book elegantly.Excerpts:
In today's fast-changing marketplace, a business can't expect to thrive by just making products and selling them, argues Stephan H. Haeckel in Adaptive Enterprise. "It does not matter how good you are at making widgets if the market for widgets disappears or if your competitors offer dramatically new and improved widgets faster than you can," writes Haeckel, director of strategic studies at IBM's Advanced Business Institute. Instead, for a company to succeed nowadays, says Haeckel, it needs to know how to adapt to customers-even before they themselves know what they want. Haeckel lays out a strategy to create such a "sense-and-respond" approach that will allow companies to move quickly amid change. Among the key steps: companies must use innovative ways to gather information about customer needs. For instance, car manufacturers used video cameras in airport parking lots to discover that people often struggle to lift heavy suitcases over the high lower edges of trunks. In mall parking areas, the cameras revealed that shoppers had nowhere to put soft drinks they just bought. Now, low trunk edges and cupholders are standard features in almost every car. In Adaptive Enterprise, Haeckel updates the concept of the corporation for the Information Age with a radical and comprehensive rethinking of organizational strategy, structure, and leadership. He outlines the new sense-and-respond business model that is helping companies systematically cope with the unexpected. Haeckel argues that when unpredictability is a given, the only strategy that makes sense is a strategy to become adaptive - to sense early and respond quickly to abrupt changes in individual customer needs. As a result, a firm's operations must be driven by current customer requests - implicit as well as articulated - rather than by plans to make and sell what customers are forecasted to want in the future. Here, for the first time, is a clear and comprehensive strategy for transforming firms into adaptive systems.
Steve Neiderhauser writes about this book, "A sense-and-respond organization is a collection of capabilities and assets managed as an adaptive system. Are you a bus or a taxi? Using a bus versus taxi analogy, Haeckel provides us with the clues to grasp this model. Bus companies are make-and-sell businesses. They create strategic plans, product schedules, and market strategies. The dutiful bus driver carries out the planner's master schedule as efficiently as possible - even if passengers don't show. Heck, drivers can hit all their stops, not pick up one passenger, and still do a fine job. On the other hand, taxi companies hire drivers based on demand. They establish frameworks - geographic boundaries -- and expect drivers to work with the framework, using their own skills, knowledge, and intuition. The company deploys a customer-moving capability. Customers make requests, and drivers respond to their needs. What's the hallmark of a sense-and-respond organization? Letting your customers drive the business. The make-and-sell bus company emphasizes efficiency and predictability. The sense-and-respond taxi company emphasizes flexibility and response". An excellent book to read, the model suited mostly for service industries,where the external environment is generally more dynamic than can be planned and operate in an ever increasingly complex and competitive world. Adaptive entperises have to be heavily dependent on great systems tied to lean and mean processes and are becoming increasingly popular across the world as a model to be embraced by winning enterprises.

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