1970s, their manufacturing methods became widely known throughout Japan as the "Toyota Production Methods". In the early 1980s, their highly successful practices migrated to North America as Just-In-Time manufacturing. Stressing the importance of managing across organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within your own division. One of the most important functions of a division manager is to improve coordination between his own division and other divisions. It you cannot handle this task, please go work for an American company".

• Management-Centered -- management's needs, goals, and perspectives are the starting point for all activities. Managers and their staff profe

If we don't change our direction we are likely to end up where we're headed.

In today's "Nanosecond" culture, successful organizations are doing what was once considered impossible. They are increasing customer satisfaction, shortening process cycles and response times, reducing costs, and developing innovative new products and services -- all at the same time.

Not long ago, organizations could succeed by excelling at one or two of these areas. But the corporate landscape is now littered with the once mighty victims of this obsolete thinking. Today's winners are capitalizing on the changes and challenges facing all organizations by being better and faster and cheaper and newer then their less nimble competitors.

Pointed In The Wrong Direction

Transforming a traditional organization to one that's better, faster, cheaper, and newer is extremely difficult. That's because organizations have built powerful cultures, systems, and practices that are now pointed in the wrong direction. This misdirection can be found across three key areas:

• Internally-Focused -- most decisions about products, services, and organization direction are inside out. Product and service development specialists, technical experts, managers, planners, and other professionals spend most of their time inside the organization pushing products and services out to the market.

Too often the needs of the organization are put ahead of those people it's trying to "serve". As John McDonnell, Chairman and CEO of McDonnell Douglas put it, "we did not always listen to what the customer had to say before telling him what he wanted". This we-know-best approach is now finding many long time leaders out of sync with their markets. The ratings (and revenues) of many mighty corporations are plummeting. Their "loyal" (once treated as captive) customers find products and services that better reflect their changing perceptions of value.

• Functionally Managed -- individual departments work to optimize their own internal efficiency. Goals, objectives, measurements, and career paths move up and down within the narrow, functional "chimney walls". Functional managers and their employees focus on doing their own jobs or segment of the production, delivery, or support process.

Functionally managed organizations typically reduce service/quality levels while increasing cycle times and costs by; 1) fostering an "us-versus-them" approach to communications and fighting for organizational resources, 2) leaving unmanaged gaps between departments which disrupt cross-functional work processes, 3) making improvements or changes in one department which hurts the effectiveness of other departments in the process, and, 4) losing sight of customer-supplier relationships and meeting everyone's needs.

Since the 1950s, Toyota has worked tirelessly to reduce the walls and gaps between departments. By the 1970s, their manufacturing methods became widely known throughout Japan as the "Toyota Production Methods". In the early 1980s, their highly successful practices migrated to North America as Just-In-Time manufacturing. Stressing the importance of managing across organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within your own division. One of the most important functions of a division manager is to improve coordination between his own division and other divisions. It you cannot handle this task, please go work for an American company".

• Management-Centered -- management's needs, goals, and perspectives are the starting point for all activities. Managers and their staff profes

Pointed In The Wrong Direction

Transforming a traditional organization to one that's better, faster, cheaper, and newer is extremely difficult. That's because organizations have built powerful cultures, systems, and practices that are now pointed in the wrong direction. This misdirection can be found across three key areas:

• Internally-Focused -- most decisions about products, services, and organization direction are inside out. Product and service development specialists, technical experts, managers, planners, and other professionals spend most of their time inside the organization pushing products and services out to the market.

Too often the needs of the organization are put ahead of those people it's trying to "serve". As John McDonnell, Chairman and CEO of McDonnell Douglas put it, "we did not always listen to what the customer had to say before telling him what he wanted". This we-know-best approach is now finding many long time leaders out of sync with their markets. The ratings (and revenues) of many mighty corporations are plummeting. Their "loyal" (once treated as captive) customers find products and services that better reflect their changing perceptions of value.

• Functionally Managed -- individual departments work to optimize their own internal efficiency. Goals, objectives, measurements, and career paths move up and down within the narrow, functional "chimney walls". Functional managers and their employees focus on doing their own jobs or segment of the production, delivery, or support process.

Functionally managed organizations typically reduce service/quality levels while increasing cycle times and costs by; 1) fostering an "us-versus-them" approach to communications and fighting for organizational resources, 2) leaving unmanaged gaps between departments which disrupt cross-functional work processes, 3) making improvements or changes in one department which hurts the effectiveness of other departments in the process, and, 4) losing sight of customer-supplier relationships and meeting everyone's needs.

Since the 1950s, Toyota has worked tirelessly to reduce the walls and gaps between departments. By the 1970s, their manufacturing methods became widely known throughout Japan as the "Toyota Production Methods". In the early 1980s, their highly successful practices migrated to North America as Just-In-Time manufacturing. Stressing the importance of managing across organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within your own division. One of the most important functions of a division manager is to improve coordination between his own division and other divisions. It you cannot handle this task, please go work for an American company".

• Management-Centered -- management's needs, goals, and perspectives are the starting point for all activities. Managers and their staff profe

it's trying to "serve". As John McDonnell, Chairman and CEO of McDonnell Douglas put it, "we did not always listen to what the customer had to say before telling him what he wanted". This we-know-best approach is now finding many long time leaders out of sync with their markets. The ratings (and revenues) of many mighty corporations are plummeting. Their "loyal" (once treated as captive) customers find products and services that better reflect their changing perceptions of value.

• Functionally Managed -- individual departments work to optimize their own internal efficiency. Goals, objectives, measurements, and career paths move up and down within the narrow, functional "chimney walls". Functional managers and their employees focus on doing their own jobs or segment of the production, delivery, or support process.

Functionally managed organizations typically reduce service/quality levels while increasing cycle times and costs by; 1) fostering an "us-versus-them" approach to communications and fighting for organizational resources, 2) leaving unmanaged gaps between departments which disrupt cross-functional work processes, 3) making improvements or changes in one department which hurts the effectiveness of other departments in the process, and, 4) losing sight of customer-supplier relationships and meeting everyone's needs.

Since the 1950s, Toyota has worked tirelessly to reduce the walls and gaps between departments. By the 1970s, their manufacturing methods became widely known throughout Japan as the "Toyota Production Methods". In the early 1980s, their highly successful practices migrated to North America as Just-In-Time manufacturing. Stressing the importance of managing across organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within your own division. One of the most important functions of a division manager is to improve coordination between his own division and other divisions. It you cannot handle this task, please go work for an American company".

• Management-Centered -- management's needs, goals, and perspectives are the starting point for all activities. Managers and their staff profe

employees focus on doing their own jobs or segment of the production, delivery, or support process.

Functionally managed organizations typically reduce service/quality levels while increasing cycle times and costs by; 1) fostering an "us-versus-them" approach to communications and fighting for organizational resources, 2) leaving unmanaged gaps between departments which disrupt cross-functional work processes, 3) making improvements or changes in one department which hurts the effectiveness of other departments in the process, and, 4) losing sight of customer-supplier relationships and meeting everyone's needs.

Since the 1950s, Toyota has worked tirelessly to reduce the walls and gaps between departments. By the 1970s, their manufacturing methods became widely known throughout Japan as the "Toyota Production Methods". In the early 1980s, their highly successful practices migrated to North America as Just-In-Time manufacturing. Stressing the importance of managing across organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within your own division. One of the most important functions of a division manager is to improve coordination between his own division and other divisions. It you cannot handle this task, please go work for an American company".

• Management-Centered -- management's needs, goals, and perspectives are the starting point for all activities. Managers and their staff profe

1970s, their manufacturing methods became widely known throughout Japan as the "Toyota Production Methods". In the early 1980s, their highly successful practices migrated to North America as Just-In-Time manufacturing. Stressing the importance of managing across organizational boundaries, a Toyota executive said, "It is not enough to manage the affairs within your own division. One of the most important functions of a division manager is to improve coordination between his own division and other divisions. It you cannot handle this task, please go work for an American company".

• Management-Centered -- management's needs, goals, and perspectives are the starting point for all activities. Managers and their staff professionals are the brains and employees are the hands. Employees serve their managerial masters and do as they are told. Broad business perspectives and strategies, operational performance data, problem solving and decision making authority, and cross-functional skills are kept by management.

But the world is now moving too fast to maintain this archaic "command and control" approach that puts management at the center of the universe. Managers can no longer know enough, fast enough, about enough things, enough of the time to anticipate enough of the changes that are needed to improve the organization enough to become better and faster and cheaper and newer enough.

Partial Improvement Patches and Pieces

Recognizing the urgent need to quickly reverse direction, many organizations are implementing a variety of improvement programs and process. These include:

• Employee Involvement and Empowerment -- many training and motivational programs, as well as structural changes aim to move daily problem solving, decision making, customer satisfaction, and productivity improvement responsibilities closer to the front lines.

• Teams -- a rapidly growing employee involvement trend uses departmental, problem solving, cross-functional, project, process improvement, planning and coordinating, and self-directed work teams in many combinations and configurations.

• Customer Service -- increasingly organizations are identifying key customer groups, clarifying and ranking their expectations, working to realign the organization's systems customer around those expectations, and training employees to deal with customers more effectively.

• Process Improvement and Reengineering -- data-based tools and techniques, flowcharting, and other "mapping" approaches improve processes at micro or departmental levels. In other cases, processes are radically reengineered across vertical departments at macro or strategic levels.

• Training and Development -- many executives recognize the need for massive improvements in skill levels throughout their organizations. This is leading to major increases in technical, personal communications and effectiveness, team (leaders and members), data-based tools and techniques, process improvement and management, and coaching skill development.

• Technology -- investments in factory automation, information systems, voice and data communication systems, inventory control systems, and so on are growing rapidly as companies push for higher productivity, faster response times, and improved service/quality.

Many of the above efforts are piecemeal or implemented in isolation. For example, training and development, customer service, technology, and process reengineering are often implemented by separate departments with little or no joint planning and coordination. As a result, products or services are either better or faster or cheap