There's an excellent article by Betsy Morris in the current issue of Fortune Magazine about how the Jack Welch way of winning is---dare we say---a thing of the past.
How is this relevant to the project management field? Well, for one, it means recognizing the winds of change in the industry, and how projects are selected, promoted, and managed. Above all, this impacts program and portfolio management. Particularly, note four trends in management thinking:
Innovation: Let's take Welch's old rule of being number 1 or 2 in your market (or else fixing, selling, or closing the business). The new rule is to find a niche and create something new. The article uses CocaCola as an example of a company that was basking in their glory as number 1, but eventually realized (although it took a while) that energy drinks and bottled water were about to pass them. As the article points out, energy drinks "are now expected to outearn every other category of soft drink within three years." Parhaps marketing guru Harry Beckwith said it best in
Selling the Invisible when he said that it's fine to do something 10% better until someone else comes along and does it 110% different.
Customer-Centric Management:Welch started a whole movement of focus on the shareholder, which led many organizations to ignore the future amid pressure to appease shareholders and "make the numbers." Now, organizations realize that the customer is king. The article references several companies that have made this realization, and the trend is heading in that direction. After all, statistics show that even a minor improvement in customer retention leads to a major increase in profitability. The days of short-term thinking may be finally coming to an end.
Reinvention vs. Incremental Change:Since it seemed Jack Welch could do no wrong, everyone imitated whatever Jack did---and Six Sigma was no exception. The problem is that, according to the article, of the 58 large companies that announced Six Sigma programs, 91% have trailed the S&P 500 since. As the article points out, that's mostly because
Six Sigma is intended to "fix an existing process," whereas innovative companies that developed new and unique products (or reinvented their business) took the lead.
Stop Ranking Your Players; Inspire Passion:Once of Welch's most controversial systems was to constantly rank his employees and regularly weed out the "C" players. But companies have had difficulty getting productivity and innovation out of "increasingly disenfranchised employees." In the article, Christopher Bartlett of Harvard Business School put it best:
"People don't come to work to be No. 1 or No. 2 or to get a 20% net return on assets. They want a sense of purpose. They come to work to get meaning from their lives."
Side editorial: For the "enlightened" approach of finding the hidden strength in everyone (something Peter Drucker always suggested), read Marcus Buckingham's
Now Discover Your Strengths (or any of his books for that matter). Or read Dennis Littky's
The Big Picture: Education is Everyone's Business. I assure you, you'll never be the same.
Meanwhile, I highly recommend the article (the link is below) for those looking for the latest trends in management thinking, and who want to remain one step ahead.
From a project management perspective, the handwriting is clearly on the wall. The traditional "execute to a set of deliverables" approach won't cut it. Today's project manager needs to be thinking about things like innovation, customer focus, business transformation, business acumen, change leadership, and team passion. Those focused on merely schedule, budget, and scope will soon be dinosaurs.
Fortune: The new rules - Jul. 11, 2006Labels: business-acumen, business-process, change-management, customer, customer-service, improvement, innovation, it-project, leadership, passion, people, portfolio-managment, program-management, project-manager, project-schedule, project-teams, service-orientation, six-sigma
