TECHNOLOGY ACCELERATORS

*Technology and the Hedgehog Concept

Technology‐induced change is nothing new. The real question is not, what is the role of technology? Rather, the real question is, how do good‐to‐great organizations think differently about technology?

The good‐to‐great companies slowly adapted the technology to fit their Hedgehog Concept. Gillete – Pioneered application of sophisticated manufacturing technology for making billions of high‐tolerance products at low cost with fantastic consistency. They protect manufacturing technology secrets with same fanaticism that Coca‐Cola protects its formula. The cumulative value of $1 invested in Gillete in 1976 was worth $95.68 in 1996.

*Technology as an Accelerator, Not a Creator, of Momentum

When used right technology becomes an accelerator of momentum, not a creator of it. The goo‐to‐great companies never began their transition with pioneering technology, for the simple reason that you cannot make good use of technology until you know which technologies are relevant. And which are those? Those – and only those – that link directly to the three intersecting circles of the Hedgehog Concept.

The relationship to technology is no different from the relationship to any other category of decisions. Technology alone cannot create sustained great results.

*Technology Trap

Mediocrity results first and foremost form management failure, not technology failure. Evidence from the study does not support the idea that technological change plays the principal role in the decline of once‐great companies. Technology is never the primary cause of either greatness or decline.

*Technology and the Fear of Being Left Behind Great companies respond with thoughtfulness and creativity, driven by a compulsion to turn unrealized potential into results; mediocre companies react and lurch about, motivated by fear of being left behind. No technology can make you level 5. No technology can turn the wrong people into the right people. No technology can create a culture of discipline.

FIRST WHO .... THEN WHAT

“There are going to be times when we can’t wait for somebody. Now, you’re either on the bus or off the bus.” – Ken Kesey

*Transformation

Get the right people on the bus, the wrong people off, and then figure out where to drive it.

Must begin with “who” rather than “what” – Reason, if people are on the bus because of ‘where’ then what happens when the bus changes direction?

The right people on the bus eliminate the need to motivate and manage.

Get the wrong people off the bus – great vision without great people is irrelevant.

In the 1970’s CEO Dick Cooley ( Wells Fargo), instead of mapping out a strategy for the deregulation changes he hired outstanding people whenever and wherever they found them, often without any specific job in mind. $1 invested in Wells in 1973 was worth $74.47 in 1998.

*Not a “Genius with a Thousand Helpers”

The comparison companies were more concerned with getting one individual as the primary driving force for the company’s success. The genius at top rarely built strong management teams – they didn’t want one. All they wanted was good soldiers, but when the genius left the soldiers couldn’t make decisions on their own.

*Difference in Philosophy

Good‐to‐Great Companies

Level 5 + Management Team

First Who – build a superior executive team

Then What – figure out the best path to greatness

Comparison Companies

A Genius with a Thousand Helpers

Level 4 Leader

First What – set a vision for where to drive the bus

Then Who – enlist a crew of highly capable helpers

*It is who you pay, not how you pay them

The study found no systematic pattern linking executive compensation to the process of going from good to great. The use of stock options, high salaries, bonus incentives, or long term compensation weren’t a factor in making the transition.

The most important factor was getting the right people on the bus. Nucor stated the most important asset is the right people, and placed greater weight on charter attributes than on specific educational backgrounds, practical skills, specialized knowledge, or work experience. Nucor returned 5.16 times the market from 1975 to1990.

*Rigorous, Not Ruthless

If you don’t have what it takes, you probably won’t last long. To be rigorous means to apply exacting standards at all levels. During most acquisitions the good‐to‐great companies would terminate large portions on the old firm’s employees, only keeping the best. When Wells Fargo acquired Crocker it terminated 1600 employees. There mind set was, “If they aren’t going to make it on the bus in the long term, why let them suffer in the short term.” They thought it was more ruthless to let someone linger around who they would have to fire in the end.

*How to be Rigorous

Practical Discipline

1. When in doubt don’t hire, keep looking.

2. When you know you need to make a people change, ACT.

3. Put your best people on your biggest opportunities, not your biggest problems.

BUILT TO LAST

The enduring great companies from Built to Last followed the good‐to‐great framework.

There was a buildup‐breakthrough flywheel process for many. It took Sam Walton 25 years of building up momentum before the transition in 1970 where Wal‐Marts grew from 38 chains to over 3,000 by the year 2000. Then there is Bill Hewlett and David Packard of Hewlett‐Packard, whose entire founding concept for HP was not what, but who – starting with each other of course. The founding meeting in 1937, begin by stating that they would design, manufacture, and sell products in the electrical engineering fields, but the question of what to manufacture was postponed.

2. Good to Great is not a sequel to Built to Last but a prequel.

Apply the finding of Good to Great to create sustained great results, as a start‐up or an established company, and then apply the findings Built to Last to go from great results to an enduring great company.

3. To make the shift form a company with sustained great results to an enduring great company of iconic stature, apply the central concept from Built to Last: Discover your core values and purpose beyond making money and combine this with the dynamic of preserve the core/stimulate progress.

4. Good to Great answers a fundamental question raised, but not answered, in Built to Last: What is the difference between a “good” BHAG (Big Hairy Audacious Goal) and a “bad” BHAG.

A. Clock building, not time telling

Build an organization that can endure and adapt through multiple generations of leaders and multiple life cycles.

B. Genius of AND

Instead of choosing A or B, figure out how to have A and B – purpose AND profit, continuity AND change, freedom AND responsibility

C. Core ideology

Instill core values and core purpose as principles to guide decisions and inspire people

D. Preserve the core/stimulate the progress

Preserve the core ideology as an anchor point while stimulating change, innovation, and renewal in everything else.

*Why Greatness

The real question is not, “Why Greatness?” but “What work makes you feel compelled to try to create greatness?” If you have to ask the question, “Why should we try to make it great? Isn’t success enough?” then you’re probably engaged in the wrong line of work.

ORGANISATIONAL LEARNING FOR SUCCESSFUL COMPANIES

An organisation is more successful if its employees learn quicker, implement and commercialise knowledge faster than the competition's workers. An organisation that is unable to continuously develop, share, mobilise, cultivate, put into practice, review, and spread knowledge will not be able to compete effectively. That is why the ability of an organisation to improve existing skills and acquire new ones forms its most tenable competitive advantage. This article introduces a knowledge management quick scan to

measure this ability.

KNOWLEDGE is a function of information, culture, and skills:

<Knowledge> = f (<Information>, <Culture>, <Skills>)

The function <f> specifies the relationship between knowledge on the one side and information, culture, and skills on the other. In this context information comprises the meaning given to data or information obtained according to certain conventions; this is also known as explicit knowledge (Nonaka & Takeuchi, 1995). On the one hand, culture is the total amount of standards, values, views, principles, and attitudes of people that underscore their behaviour and functioning. On the other hand, skills are related to the capability, ability, and personal experience of people; they relate to what people can do, know, and understand. The knowledge components culture and skills represent implicit knowledge, which depends on the individual and is stored in the minds of people. This concept is based on experience, is practical in nature, and finds its source, among other things, in associations, intuitions, and fantasies. Explicit knowledge, on the contrary, is not dependent on the individual, is theoretical in nature, and is specified as procedures, theories, equations, manuals, drawings, etc. This knowledge is mainly stored in management information and technical systems, and organisational routines. How can knowledge be transformed into new behaviour? Thus, how can people learn effectively so that they can function better? If knowledge is to lead to competent action, then learning should receive special attention, and the organizational culture and structure should stimulate and support this.

Knowledge ages rapidly and is liable to wear. Learning is a continuous personal transformation. It is a cumulative process of the continuous actualisation of your knowledge, in order to change your behaviour so you can function and act better. It is a permanent change in your knowledge and behaviour partly due to repeated experiences. The intention is improving the quality of your thinking and acting.

In view of the increasing shift from lifetime employment to lifetime employability, people must make sure that their knowledge is up-to-date. An organisation is more successful if its employees learn quicker, and implement and commercialise knowledge faster than the competition's workers. An organisation that does not learn continuously and is not able to continuously develop, share, mobilise, cultivate, put into practice, review, and spread knowledge will not be able to compete effectively. That is why the ability of an organisation to improve existing skills and acquire new ones forms its most tenable competitive advantage. It is, therefore, imperative to constantly know which knowledge is essential, where it is available in the organisation, which associate possesses this skill, how this knowledge can be adequately utilised, how it can be shared, how this provides added value, and how it can be maintained. The organisation's knowledge infrastructure must be organised so that effective team work, creativity, positive thinking, self confidence, and a good learning environment are stimulated by the use of computers, the Internet and intranet, design of a knowledge-bank, presence of a library, continuous training, organisation of brainstorm sessions, and review meetings.

The ability of an organisation to learn by experience depends on the employees' willingness to think about problems, about the opportunity presented to associates to identify and solve common problems together, the willingness to intervene preventively, and the existence of a working atmosphere where every employee feels responsible for the company's performance. In practice, organisations especially seem to learn if employees have a sense of direction through a collective ambition (mission and vision), and work with all their might to realise this ambition. Because of this, employees feel a strong common bond, which motivates them to learn together. Under these inspiring circumstances, they are also willing to share their knowledge with their colleagues and match their personal objectives with the ones of the organisation. Through this, learning organisations emerge in which learning is collective and based on a personal and collective ambition.

Learning organisations have the ability to learn and facilitate all facets of the learning process and thus continuously transform themselves. Such organisations consist of teams with balanced learning styles, and people whose personal ambition corresponds to that of the organisation. Because of this, they have a positive attitude towards improving, changing, and learning. Learning organisations also consist of people who constantly learn from their own mistakes, share knowledge and communicate openly with each other. These organisations have leaders who coach, help, inspire, motivate, stimulate, and intuitively make decisions, and have processes that are constantly reviewed based on performance measures and feedback.

The management of the knowledge stream within the organisation is essential for this, as well as changing the way we think and deal with each other. According to Peter Senge (1990), people must give up their traditional way of thinking, have to develop their own skills and be open to change, understand how the whole organisation functions, and formulate the shared vision of the organisation together to try to fulfill this ambitious dream as a team. These basic elements of learning organisations are also based on people's experiences. In practice it shows that the tempo with which the abilities of an organisation increase are to a greater degree determined by the efficiency with which one learns from experiences. In order to obtain an optimum learning effect, people should have a certain educational level and specifically get the chance to acquire experience; this is because people with experience learn faster. Therefore, it is important to accept that every employee is able to learn and is motivated to do so, that learning is not a passive but active and continuous process and that associates need guidance in this process.

EFFECT OF SILICON

Sources

Silicon is found in almost all charge materials. Like carbon, there is very little in most steels, but it should be accounted for in charge calculations. It is also possible to buy pig iron with relatively low silicon; however, most pig irons, cast scrap and returns have higher silicon contents than steels. (It is sometimes possible to get a source of high silicon steel scrap. This can be an economical charge material.)

Silicon is also purchased as an addition. Care should be used when selecting the addition material. Inoculating grades of ferro-silicon should only be used when inoculation is desired. The aluminum and calcium in those grades can cause additional slag when introduced in induction furnaces

Effects and Comments

Silicon is like carbon in many respects. It has been long recognized as an important element, and, therefore, controls are typically adequate. While silicon control in a cupola can be difficult, in induction melting it is relatively easy.

Also like carbon, the higher the silicon the more likely larger graphite will occur as well as more ferrite in the matrix. This, of course, will generally be a weaker iron but with less likelihood of having carbides to degrade machinability. When silicon becomes very high it hardens the ferrite and can increase the hardness of the iron.

In ductile iron the impact transition temperature is affected by the silicon content. The impact transition temperature is the temperature at which ductile iron changes from being a

ductile material to a brittle material. With silicon contents around 2.40% the temperature is about -40o F. With silicon contents over 3% that temperature can be raised so high that castings will be brittle at room temperature.

Recovery of silicon alloys when added to a ladle is usually around 90%.

EFFECT OF CARBON

Sources

Carbon is present in almost all charge materials. While there is very little carbon in steel, there is enough that it must be taken into consideration when calculating a charge. Pig iron,purchased cast scrap, and returns all have considerably higher percentages of carbon than steel does. Carbon is also purchased for addition. The addition materials are called graphite or carbon raiser. Graphite is a crystalline material that when added to a ladle may have an inoculating effect. Carbon Raisers, on the other hand, are amorphous are not believed to have any inoculating effect Certain alloy additions can contain significant amounts of carbon and must be taken into consideration when calculating a charge. In particular, silicon carbide is usually considered a source of silicon, but it contains a significant amount of carbon.

Effects and Comments

Carbon has long been recognized as one of the most important elements in effecting the microstructure and strength of gray and ductile iron. This has led to great efforts in controlling it. It is a rare iron foundry that doesn't have some control of their carbon in order to minimize effects from changes. The quality of the control will vary from foundry to foundry. Those foundries that don’t have good control of their carbon can expect significant changes in their iron’s properties.

In general, carbon is the most potent of graphitizers. The more carbon in the iron the more graphite will be in the matrix. Also, the more carbon there is in the iron the greater the probability that the matrix will have ferrite in it. If that is the case, that also means that there will be less chance to have carbides.

Higher carbon irons are less likely to shrink and have better fluidity than lower carbon irons. In addition, higher carbon leads to less likelihood of producing massive carbides. If a foundry is producing thin castings it is likely that they will run a higher carbon than a foundry On the other hand, attempting to correct shrink with higher carbons can lead to other problems, especially in big castings. High carbons and slow cooling rates (thick castings) can lead to a condition called carbon flotation. Graphite typically forms first during solidification and is lighter than iron. If the solidification of the entire casting is slow enough, the graphite floats toward the surface of the casting. Recovery of carbon when added to ladles is usually less than 50%.

PROBLEM SOLVING

Most people spend more time and energy going around problems than in trying to

solve them.”

Good problem solving skills empower managers in their professional and personal lives. Good problem solving skills seldom come naturally; they are consciously learnt and nurtured. The repertoire of good problem solving skills includes:

• developing creative and innovative solutions;

• developing practical solutions;

• showing independence and initiative in identifying problems and solving

them;

• applying a range of strategies to problem-solving;

• applying problem-solving strategies across a range of areas;

What is a Problem?

1. A problem is an opportunity for improvement. “Every problem has a gift for you in its hands,” says Richard Bach. Someone coined the word “probortunity” – an acronym combining the words “problem” and “opportunity”. A probortunity is a reminder to look at problems as possible opportunities. An optimist looks at challenging or problematic events as potential opportunities for improvement. He is seen always seeking answers

for the questions such as:

• Is there more than one probortunity?

• Is it my personal probortunity? Is it the organization’s probortunity?

• Is it an actual probortunity or just an annoyance?

• Is this the real probortunity, or merely a symptom of a larger one?

2. A problem is the difference between the actual state and desired state. A

problem could also be the result of the knowledge that there is a gap between the actual and desired or ideal state of objectives. Clarity of the problem is determined by the clarity of the knowledge of what precisely one wants and what one has. Greater clarity of the problem helps in finding a better and effective solution.

3. A problem results from the recognition of a present imperfect and the belief in the possibility of a better future. The belief that one’s hopes can be achieved will give one the will to aim towards a better future. Hopes challenge one’s potential, and challenge is another definition of a problem. When confronted with a problem, according to Robert Harris (“Introduction to Problem Solving”), people are likely to adopt either of the two approaches – spot it or mop it.

1. Stop It

A stop-it approach seeks to solve a problem, so that the problem no longer exists. Its

three forms are prevention, elimination, and reduction.

• Prevent It. Preventing a problem from occurring or recurring is the most ideal solution. The prevention approach is often a difficult one to apply because it requires predictive foresight (“this might be a problem someday if we don’t act now”). For example, by preventing a cold, or an automobile accident, one can avoid the need to deal any further with a problem or its effects.

• Eliminate It. Eliminating a problem once and for all is also an ideal way of attacking a problem. If a tank were leaking, an elimination solution would be to plug/seal or otherwise repair the leak, the cause of the problem. To solve by

eliminating should be considered in nearly every problem situation.

• Reduce It. The magnitude of any problem can be lessened by reducing its size. Suppose the tank is leaking and a repair (an elimination-solution) is not possible until a day or two later. The problem could be reduced by turning off the incoming water. Without line pressure on the tank, the leak would slow down;

that would be better than a full force leak.

2. Mop It

A mop-it approach focuses on the effects of a problem. Instead of treating the leak itself, the water on the floor is mopped up - the effects of the problem.

• Treat It. Here the damage caused by the problem is repaired or treated. The water on the floor is mopped up and the damaged floor is fixed. But, it should be noted that: (1) by itself a treat-it solution is not going to be nearly as effective as some form of stop-it solution and (2) treat-it solutions are often needed in addition to an elimination or reduction form of solution.

• Tolerate It. In this form of mop-it approach, the effects of the problem are put up with. In the leaky water example, one might install a drain in the floor, or waterproof the floor. The effects are taken for granted and measures are taken to endure them.

• Redirect It. Here the problem is deflected. Sometimes the problem will simply be redefined as not a problem. It is hard to think of a legitimate redirection for the leaking water problem, but suppose that the leak is small and the floor is not being damaged. One might say, “Well, I need the humidity; the leak is actually a good thing.” It should be remembered that a problem is a problem only when someone defines it as such. Managers must take cognizance of the fact that problem solving is an ongoing activity.

Prof. Jeff Malpas (“Problem solving for Managers”) says: “No problem is ever totally solved. Every problem has a solution, but every solution with it brings a new problem. Some well-known management techniques emphasize the idea of continuous improvement and successful problem-solving is seen as part of such continuous

improvement.” Managers should know that problem-solving is less a matter of continuous improvement as of continuous adjustment. Every solution will have unintended consequences. Every effective system gives rise to friction and failure. Good management and effective problem-solving depend upon a willingness to adapt to the situation and recognize the ongoing and partial character of all attempts to manage or to solve.

Just ask ‘Why?’

Sometimes, as we look for approaches to creative thinking, we forget that many of the

most powerful techniques are also the simplest... Leonardo da Vinci, one of the most creative thinkers in history, says of his inspiration: “I roamed the countryside searching for answers to things I did not understand. Why shells exist on the tops of mountains along with imprints of plants usually found in the sea. Why thunder lasts longer than that which causes it. How circles of water form around the spot which has been struck by a stone. And how a bird suspends itself in the air. Questions like these engaged my thought throughout my life”. It is easy to forget, as we rush through our lives, that curiosity is an essential foundation for creativity.

Look around the world, keep asking ‘Why?’ and ‘Why not?’, and you will soon see new opportunities.