Busix

LETTERS TO THE EDITOR

disagreeing with the authors' emphasis on being obsessively competitive. But to put the hardball discipline into practice, it is necessary to lead a company, moti- vate its employees through corporate cul- ture, make its customers want to return again and again, and put its collective knowledge to efficient use. Indeed, con- sider the article's example of Southwest Airlines fighting a competitive threat by United Airlines: Southwest's culture en- gaged employees in the battle, bringing them into the trenches for a win.

So the squishy issues themselves are not problematic - in fact, they're neces- sary-but many companies don't imple- ment them with the proper strength and focus. Companies need to take a hardball approach to these practices, making sure applications are driven by bottom-line needs.

James L Poage Principal

JLP Performance Consulting

Lexington, Massachusetts

Stalk and Lachenauer respond: We agree with James Poage that it is necessary "to lead a company, motivate its employees through corporate culture, make its cus- tomers want to return again and again, and put its collective knowledge to effi- cient use."These are issues of execution, and we believe that strategy without execution is doomed, and vice versa. The irony, however, is that successfully executed hardball strategies often give companies the resources necessary to in- vest in the well-being of their employees, customers, suppliers, and other partners.

Kenny Moore argues that a company run with a "'testosterone' style of man- agement" can have a negative effect on the people associated with it. This is true. We do not advocate bullying behavior or illegal practices. If Wal-Mart repeat- edly plays too close to the line of what is socially acceptable, the company will eventually suffer, and customers will re- alize that low product prices do not off- set the high social price of shopping at Wal-Mart.

As for the vote in Inglewood, Cali- fomia: Going over the heads of elected officials is often the only recourse avail-

able to citizens who want change. Resi- dents deciding not to have a Wal-Mart supercenter built in Inglewood is anal- ogous to people being willing to make two stops on a flight from the East Coast to the West Coast on Southwest Airlines rather than pay a much higher price for a nonstop trip on a major carrier. The vote tally-7,049 against Wal-Mart and 4,575 in favor of it-is evidence that the people of Inglewood would rather drive 50 miles to shop at a Wal-Mart store than have one in their backyard. We would like to see the vote if Wal-Mart had advertised the prices Inglewood res- idents could have paid without a long drive. Maybe next time.

Despite the criticisms of hardball play- ers, if s important to remember that these companies, including Wal-Mart, can also have a positive effect on society. For ex- ample, Toyota has fundamentally im- proved the automobile industry. It has catalyzed improvements in design and build quality, kept retail prices low, and pressured the industry to invest in envi- ronmentally friendly technologies and vehicles. That kind of hardball is highly sustainable and good for everyone.

Deep Change: How Operational Innovation Can Transform Your Company

In the April 2004 issue, Michael Ham- mer's article "Deep Change: How Oper- ational Innovation Can Transform Your Company" highlights an enduring prob- lem: If operational innovation can pro- vide one of the most powerful compet- itive weapons in existence, why isn't it widespread? About 20 years ago, when I worked for Digital Equipment (which later became Compaq and merged with Hewlett-Packard), I designed the oper- ations for a new plant in Connecticut. We improved dramatically upon antici- pated numbers, doubling production, halving the people needed, and reduc- ing the footprint by three-quarters-an amazing result. Did the rest of Digital beat a path to our door? No. Did the company embrace our ideas? No. Seeing this pattern repeated so many times in

subsequent years, 1 have wrestled a lot with the question "Why not?"

Hammer lays the blame on unpleasant characteristics of corporate leadership: Operations are undervalued, they are out of sight and mind, and no one owns them. To these problems, I would add three more: unaddressed paradigm con- flicts, poor systems thinking, and insuf- ficient time for organizational design.

First, paradigms-personal sets of rules for thinking, explaining how the world works, and solving problems-are tricky to talk about. Consequently, this crucial topic remains arcane. I believe that a di- rect assault on personal paradigms is the best way to get them on the table, so peo- ple can reevaluate ingrained ideas about what is possible in the workplace. People need to flesh out their own paradigms and then examine the ones they perceive in their organizations. Organizational diagnosis always reveals a hodgepodge of paradigms-some dut-of-date, others wished for but not practiced. It exposes the complicated roots of disinterest and hostility, and it points to the educational effort needed to promote change.

Second, systems thinking undermines the cult of the individual. Taken to an extreme, it leads to W. Edwards Dem- ing's conclusion that personal perfor- mance reviews are nonsense because performance is largely driven by work systems and hardly at all by individuals. No wonder systems thinking is resisted- it sends leaders into very unfamiliar (and perhaps frightening) territory. It's hard to strike the right balance. Individual brilliance is vastly overrated, yet people do need to take pride in their work. Powerful simulations are the best way I have found to overcome negative per- ceptions and demonstrate systems think- ing that works.

Third, many leaders believe that an organization's operational designs can be completed on a breakfast napkin, but they will allow several months to draw up building plans for, say, a factory. Ed- ucating leaders is tough, since few want to hear about the organizational design effort needed for operational innova- tion. Folding organizational design into other areas of work-particularly infor-

182 HARVARD BUSINESS REVIEW

mation technology projects-affords an indirect but effective way to make it happen. When results show, interest may follow-but don't count on it.

Laurence Megson Principal

Cognitis Croup

Geneva

Michael Hammer responds: Laurence Megson's experience is illuminating and, unfortunately, far from uncommon; his diagnoses ofthe barriers to operational innovation also ring true. In a similar vein, a divisional manager of an electric power company once explained why he had been unable to redesign operations to improve his unit's dismal on-time per- formance: "I am so busy fighting fires that I don't have time to think."

One way to promote operational in- novation would be to put greater em- phasis on systems thinking and design in managerial education, both in busi- ness schools and in companies' manage- ment development programs. A recent article in the Economist usefully observed that the intellectual roots of manage- ment derive from four fields: strategy, economics, psychology, and engineering. Managers typically get much less expo- sure in their education to engineering than they do to the other three areas, so they are not often inclined to approach operations from a systems perspective.

As Megson notes, it will not be easy to change how managers think, but I am less pessimistic than he is about the pros- pects for getting more managers en- gaged in operational innovation. To put it plainly, those who continue to avoid it will have trouble surviving against those who embrace it-witness the continuing relentless growth of Wal-Mart, Dell, and Progressive Insurance.

Erratum: A biographical note that ac- companied two advertorials in the May 2004 issue said that the advertorials' au- thor has "written extensively" for HBR. In point of fact, he has written many ad- vertorials for HBR, but no editorial fea- tures. We apologize for any confusion. - Cathryn Cronin Cranston, Publisher

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