How would you like to face this situation: Your company is producing a better-performing product, a product with better quality than that provided by another company, yet the other company’s revenues are growing faster. When Christopher Meyer was working at disk drive manufacturer Quantum Corp. in the late ‘80s, the company found itself facing those very conditions. And as he was developing strategy for Quantum at the time, the CEO told Meyer to come up with a strategy to reverse the situation. “It was purely a time-to-market issue,” Meyer recalls. “The strategy was to get faster.” So Meyer set about to learn the ways, means and methods to go faster. (And Quantum ended up passing its competitor, which ended up becoming absorbed by another manufacturer.)
Today Meyer is the chairman of the Strategic Alignment Group (Portola Valley, CA). He thinks fast.
I remember standing in line at a Borders in the early 1990s. I noted that there, behind the counter where they keep the books that have been ordered and are ready for customer pickup, a couple dozen copies of Fast Cycle Time: How to Align Purpose, Strategy, and Structure for Speed by Christopher Meyer. The book was published in 1993. That Borders is located in sight of Ford World Headquarters. In the early 1990s, Meyer worked with Ford on developing world-class timing capability. Although Meyer continues to be a car guy by interest, his focus has been on the way work—from planning to execution (or not)—is done in Silicon Valley. In 1998 he published Relentless Growth: How Silicon Valley Innovation Strategies Can Work in Your Business. Yes, it can even work in the auto industry.
Preemptive admission. Meyer is a consultant. Sometimes people are somewhat less than taken with consultants. The reason is that the disenchanted tend to be charged with getting things done and some consultants have a tendency to be more theoretical than practical.
Two points to hear from Meyer so that you are more inclined to listen to the rest:
1. “Strategy is essential because it is a competitive world out there, but analytical disciplines are meaningless if people don’t act on them.”
2. “Lots of companies have rational and well thought out plans, but their execution is lousy or, in Silicon Valley language, ‘sucks.’”
(And if none of that convinces you, perhaps this will help: In addition to consulting, he also teaches executive education courses at Stanford and the California Institute of Technology, plus MBAs at the University of Santa Clara. )
Preemptive admission no. 2. Silicon Valley is by any measure a leading—perhaps the leading—geographic area where innovation is seemingly the raison d’être (but it isn’t: they want to make money and plenty of engineers want to do new things because those new things are cool and, perhaps more importantly, because they can). Meyer describes it as “a petri dish of innovation, a rich media.” That said, know that he acknowledges: “The Valley is really good at some things and lousy at others.” He notes, “Silicon Valley is not a paragon. It has its own warts.”
Meyer’s admiration is not naive.
Preemptive admission no. 3. Meyer stresses that there are some overarching issues related to the products of Detroit vis-a-vis those developed in Silicon Valley that make the stakes a whole lot different...such as product liability issues. It’s one thing if your hard drive crashes. It is another if your ABS doesn’t work.
Forget the products for a moment. What makes any company fast and good (if you’re going to be fast, you’d better be good because time doesn’t wait for rework) is process.
Meyer suggests: “The Valley is not just computers and software, but it’s a constant reinvention of the process and art of innovation. What Silicon Valley invents is the process, not just the products.”
He adds a cautionary note about process, however: “My intention is to avoid the ‘process police’ view of the world which sublimates humans to rigid processes. While there are exceptions, in Silicon Valley, processes serve people, people don’t serve processes.”
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The New Speed, Defined
Christopher Meyer is defining what speed means in the early 21st century for organizations. Here’s how he defines speed today:
1. “It’s not operations. It’s strategic—how fast you make decisions.” (Your factories may run fast—but how about your deployment of resources: are decisions being made rapidly?)
2. “It’s also how fast you change. The first generation speed strategies sought to turn sluggish firms into dragsters—with blistering, straight-ahead speed. Today we need Champ or Formula 1 cars, for stopping and turning quickly
are as important as accelerating.”
3. “IT [information technology] is essential. The first generation of speed had kanban and process redesign. The Internet does change everything.” (Be sure that you have real-time information about what’s going on in all aspects of your organization. Get networked—and be networked.)
4. “It is global.” (The world is where business is being done.)
5. “Instead of multifunctional teams within an organization, there are transorganizational structures and processes.” (This is in line with the previous comment: not only must organizations include their suppliers in, say, product development, but they must work across borders, as well, in order to be quick and efficient.) |
Meyer provides two images of Silicon Valley companies:
1. He describes them as companies that are “leaning into the future.”
He contrasts that future orientation with some Detroit companies that “tend
to take their past and sell it in the present and even carry it into the future.”
With all of that baggage, it is difficult to move smartly into the future.
2. Valley managers and engineers sometimes talk about “going up the down escalator”—an escalator that’s descending at a brisk clip as technology changes cause margins to erode. If you stand still,
you move into the past. And given that your competitors are rushing to go up,
you lose. And down you go.
Tying the two points together, Meyer points to the contemporary Corvette, which, although arguably GM’s hottest, most marquee model, lacks a high-tech engine (at least in contrast to models with which it competes in the market). He speculates that perhaps that has something to do with an attempt to “leverage the past development in order to save costs.” But he points out that efforts like this lead to a decline in market share, which GM has certainly experienced. Another example is what happened—or, more to the point, didn’t happen—with Saturn. GM was so concerned with making a profit that the product lifecycle was extended way past its prime, there wasn’t an SUV produced, and now the company is having a tough time pushing plastic.
In Relentless Growth he employs an example that delineates this kind of approach with, once again, GM as the unfortunate primary example, although Ford of Europe comes in for its own:
“Several current [remember: the book was first published in ‘98] General Motors products use engines and other components that were designed at least ten years ago. Unlike the Valley, the automotive industry doesn’t have market windows that slam shut; if you don’t have a new product for the next model year, you can carry over last year’s model. Need a little breathing room? Do what Detroit calls a face-lift, changing minor components like the dashboard and the grille. Even if you lose some market share, you could gain it back by dropping prices, as GM did to stretch the Chevy Cavalier’s life (and it made money doing so).”
The face-lift notion may be more ironic than prescriptive. Meyer goes on to assert in the book, “Milking the past seems safer and much more defined than creating the future. But is it really? Extending models like the Cavalier helped GM’s short-term profits, but in the face of exciting new products from Chrysler and Ford, they dropped further behind their domestic competitors in market share. In contrast, because GM’s European operations developed new models while Ford waited too long to update its Sierra and Scorpio models, GM gained market share and enjoyed record profits in Europe.”
Nowadays, face lifts in Detroit are what they are in Hollywood: they can get you only so far.
When you need to get things done, you need to have empowered people, and those people may not have the longevity that was once thought to be necessary to earn one’s proverbial stripes. As Meyer puts it: “They may not have experience, but you’ve got to give them the ability to get things done.” And one of the problems that Meyer believes Detroit is going to have is attracting the kind of young, imaginative, aggressive talent that is required in order to create the new types of vehicles that are being rolled out full of the latest in electronics gear: “It’s hard to be a disruptive person in an industry with as long a culture and the business models that the Big Three have.”
And perhaps more to the point, Meyer observes, “Cisco still gives stock options out to every employee.” (And Cisco just happens to be the most valuable company going—not just in the Valley, but on the planet.)
One of the things that is necessary to getting things done is avoiding NVA (non-valued added) activities that are essentially nothing more than CYA activities. “In the Valley, because you’re leaning into the future and the present is fleeting, people use documentation as it was intended: Engineers document their drawings and strategists their strategy, they work on the principle of ‘Minimum Viable Documentation’ rather than ‘Document to Cover Your Ass.’”
You want that when?
Meyer: “Nowadays, a good solution six months late is not a good solution.”
Meyer says that one of the things that allows people in the Valley to go fast in product development is that they know how to stop: “They believe they have brakes.” He explains that there are projects started on an on-going basis. Some are comparatively ad hoc. Others have serious resources behind them:
“When Silicon Valley does an experiment there’s some situations where they just throw 15 guys together and see what comes up. There are other times when they go, look at it in eight months, then maybe shoot it.” Pause.
“But they really go for it.” He rhetorically asks how well staffed the typical Detroit projects are: Are experienced people in positions of authority or is it just who’s available?
What’s more, he points out that the rhetoric in Detroit about things not working out tends to be somewhat funereal: “career-limiting move;” “near-death experience.” Who is going to want to take a risk under those conditions?
“You can put a design center somewhere—and you can close it. You can start a project—and you can shut it down. It’s not the desired option, but it’s better than never starting until you’re 100% sure.”
Meyer points out: “We talk about a ‘Knowledge Economy.’ One of the challenges isn’t learning, it’s unlearning.” In other words, people have to stop thinking the same way they always have: the future isn’t like the past, so why should old patterns work? “Too often we’ve seen that in some industries, the lack of unlearning has come at the expense of the incumbents. I don’t think that has to happen.”
To quote the ungrammatical Apple ad: “Think Different.”
Of the leaders in Detroit, Meyer thinks Jac Nasser of Ford is the one who is doing the right things, like moving Lincoln-Mercury out of Detroit to southern California and providing PCs to all employees. “Nasser has been the most bold—but perhaps not bold enough.” Still, Meyer notes that what Nasser seems to be doing is “breaking the rhythm” that has long played in Detroit.
Perhaps the time for waltzing is over.
