How to Make an Elephant Dance: Keys to Market Responsiveness
There is a congenital disorder that some unfortunate folks suffer from that prevents them from detecting pain. The pain receptors in their hands and other parts of their bodies do not communicate with the brain. The dangerous effect of this is frequent injury to the person who is suffering from the disease. Oddly, the sense of touch works fine; it’s the pain messages that are blocked. Market responsiveness can be similar to this.
One could say that the executive functions operate without the data necessary to make correct decisions in terms of market responsiveness. You wash your hands in scalding water, and the only clue that you are burning yourself comes from seeing the skin on your hands blister and turn bright red. Your communication system does not work. Your hands are injured. Yet, everything feels just fine.
The same phenomenon occurs in large, multiple-site businesses. The folks at headquarters in New York read their reports, issue their directives and make their plans. The guys out in Topeka do everything according to the corporate directives. At the end of the year, the Topeka operation has lost a ton of money, and lights burn late into the night as HQ tries to figure out why.
As surprised as the bosses in New York are, the folks in Topeka are much less surprised. They have seen opportunities missed throughout the year. They may have even made attempts to obtain some funding from HQ to respond to new markets and exploit new trends in their business. But, in the end, the guys in New York told the Topeka team to cool it; everything would be fine. The numbers they were getting out of Topeka during the year seemed to be perfectly lined up with their expectations.
Large, complex organizations are frequently trapped by their own inertia. They do things because they have always done things that way. The way they view remote operations can easily become formulaic, which makes positive change difficult.
Ross Perot once compared managing change at General Motors to teaching an elephant to tap dance. He was reported to have said this was accomplished with a sharp stick and by poking the elephant in sensitive places. Big organizations are like that; they address their “big organizational” needs first.
The local operations—the ones that are actually involved in making or selling things—need systems that are designed to address their specific needs. Sure, Corporate needs its numbers; they have to manage the enterprise. But they also need to give the local operations enough latitude to implement the systems designed to run their business and hopefully enable them to thrive.
They need to acknowledge the fact that running the business in Topeka is best handled by the managers in Topeka. They understand the business, they know their market and they know what they need to make their business work. They know what their customers want.
If your enterprise is essentially a holding company with subsidiary companies engaged in a variety of diverse operations and spread out across a large swath of the globe, you really need to look at how each of these businesses is running. What do they individually need to succeed? What systems are best for each individual business? Do the local managers have the autonomy to manage their business in a responsive fashion?
Even if your enterprise is operating under a single name and the local operations handle specific parts of a larger business, the individual businesses need to be equipped to effectively manage their individual operations.
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