Robert Paterson's Weblog

486V - First Assignment

The key to "getting" this course is to "see" that the
new competitive process is all about having the right
culture.

In the past it was in having the right managerial and
production processes. Now it will be in seeing the
staff, the customers and the world in anew way.

Define for me the important features that you can
discern from the culrtures of eBay, dell, Amazon,
Southwest and Wal*Mart.

How do they see the world, what is really going on and
what is really important, and where did the founders get
this view?

How do they see the customer?

How do they see the staff?

How do they see the interface where the customer and the
organization meet?

What are the key relationships between all the critical
parties?

How do they see the issues of control and with whom in
mind?

Why is the experience of what happens as important as
the transaction?

Why are these firms so dominant?

1,000 words please. I will set up a placemark for you to
post your papers .

Let's discuss these questions online in public so that
we all get a good sense of where we need to go before
you write your paper

UPEI 486V The Customer Revolution - eBay the Perfect Store a discussion

Download file

Here is an experiment. Robert Peters, Audrey Pyke and I have recorded 50 minutes of conversation about the ideas contained in the first set book for the course, The Perfect Store by Adam Cohen.

The file is an MP3 file and have downgraded the quality to keep the file size manageable. There is also a bit of background noise - we were in cubicle land. But after a nervous start, this is really new for us - we settled in and I think that a lot of what was said is quite helpful.

Book Reviews - 486v The Customer Revolution Course at UPEI

Here are some great reviews and resources that I have found so far. If you have found others please post them in the comments section.

The Innovator's Solution

More on Christensen

The Support Economy

Wal*Mart an article by Fast Company

The Meaning of Dean

An Amazon Reviewer on Direct from Dell - Reviewer: David Nishimoto from North Ogden, Ut United States

Between 1984-87, Michael Dell managed has taken his company from a $1,000 hobby to a $160 million business. In 1999, it was worth $18 billion and had experience a 36000 percent growth. Dell computer company is a "Good to Great" company. Michael Dell exhibits the type of leadership that a "Good to Great" company should have. Dell's Big Picture: Build a business on what people want instead of what you think they want: 1. listen to the customer 2. respond to the customer 3. deliver what they want. Success is a matter of learning and identifying core strengths. Every new growth opportunity has a level of risk Try to identify potential problems early and fix them. Pace investment to match progress. If there was a way to get something done more quickly and easily, I wanted to try it. Eliminate the middle man. Opportunity is part emmersion and part instinct. Dell's Competitive strategies: 1. faster speed to market 2. superior customer service 3. commitment to produce high quality and high performance product 4. rapid entry to the internet. The PC was going to be the business choice for the future. Surround yourself with smart advisors. If you hire good people they will bring other good people to the organization Dell's Two golden rules: Distain inventory and Always listen to the customer. Always sell direct. Build your infrastructure as you grow. Slow and steady growth with a focus on liquidity. Communication is the most important tool in recovering from mistakes. Interject functional excellence and maintain accountability. Segment by customer. Segmentation offered the solution to rapid growth. Maximize strengths to improve profit. The quality of information is proportional to the amount inventory. Focus on getting quality information and decreasing inventory. Information Technology must reduce obstacles to the origin and flow of information. Acheive velocity by selecting the minimum number of parts that will cover the largest portion of the market sector. Dell's view on company culture: moblize around a common goal, invest in long term goals, don't leave the talent search to human resources, cultivate commitment to personal growth, and get involved. Dell's list of donts: 1. Don't be satisfied 2. Don't waste precious resource 3. Don't play hard to get 4. Marry high tech and high touch 5. Don't forget the customer have different fears, questions, and sensitivities. Dell's beliefs about the customer: 1. See the big picture 2. Run with suggestions from the customer 3. Always think bottom line (find ways to help the customer cut costs) 4. Make yourself valuable to the customer. 5. Be a student. Dell's guidelines for communication: 1. Don't underestimate the value of information 2. Communicate directly with the customer 3. work toward increasing demand verses supply 4. think real time 5. R&D must deliver value-added stuff for the customer 6. Get online and learn from the customer. Focus on the customer and not competition.

Amazon reviewer on Southwest Airlines - Reviewer: Robert Morris from Dallas, Texas

Why can't other companies (not only airlines) become as highly admired as well as profitable as Southwest Airlines? Here is an excerpt from Herb Kelleher's presentation at the Risk Management Association's annual conference: "Maintaining excellent customer survives involves a process of getting people to understand the importance of it to them in their daily lives as well as in others'. We were a little concerned as we got bigger that maybe some of our early culture might be lost so we set up a culture committee whose only purpose is to keep the Southwest Airlines culture alive. Before people knew how to make fire, there was a fire watcher. Cave dwellers may have found a tree hit by lightning and brought fire back to the cave. Somebody had to make sure it kept going because if it went out, there was was the most important person in the tribe. I said to our culture committee, 'You are our fire watchers, who make sure the fire does not go out. I think you are the most important committee at Southwest Airlines.' I really do believe that to be the case. We have people come in from all over the world who are interested in our culture because they see it in the customer service aspect of it."

Kelleher then notes that "Southwest Airlines had 162 companies at our last corporate day [open house], which we have twice a year. We started them off that day with the Macarena and they were all wondering, 'Hmmmm....I was looking for E=mc2 and I'm getting the Macarena.' But a fellow from Swiss Air was interviewed when he left and was asked, 'What's the most important message you're taking back to Swiss Air?' And he said 'For everybody to learn to do the Macarena.' Everybody's looking for a single Big Answer, an easy answer such as 'We'll communicate for six months, then get on with something else that's more important.' I keep telling them that the intangibles are far more important than the tangibles in the competitive world because, obviously, you can replicate the tangibles. You can get the same airplane. You can get the same ticket counters. You can get the same computers. But the hardest thing for a competitor to match is your culture and the spirit of your people and their focus on customer service because that isn't something you can do overnight and it isn't something you can do without a great deal of attention every day in a thousand different ways. That is why I say that our employees are our competitive protection."

I cannot think of a better introduction to Gittell's book, nor to my comments on her book. Although she identifies "Ten Southwest Practices" and devotes a chapter to explaining each in Part 2, her key point (and Kelleher's) is that high performance relations are the key to Southwest's success. Gittell includes these comments by a Southwest ramp manager:

"One thing we cannot teach is attitude toward peers or other groups. There's a code, a way to respond to every individual who works for Southwest. The easiest way to get in trouble is to offend another employee. We need people to respond favorably. It promotes good working relationships....You find an individual with an upbeat and positive attitude -- and you'll find that everything that needs to be done, will get done. It's very contagious." I have been a Southwest frequent flier since 1976. Not once, even once, have I ever had a less-than-pleasant experience with anyone within the Southwest organization. Kelleher is appropriately praised for his vision, charm, business acumen, inspiration, passion, determination, wit, etc. He should also be praised for the leadership he has encouraged and supported at all levels of Southwest. In my opinion, that is his single greatest contribution. As Jim Collins describes it in Good to Great, "getting the right people on the bus."

In Part 3, Gittell explains how the "Ten Southwest Practices" reinforce (or undermine) each other; she then suggests what can be learned from Southwest, briefly discussing efforts by competitor airlines; next, she examines how Southwest responds to pressure and manages crises (e.g. September 11); finally, Gittell offers a number of suggestions as to how other organizations can implement high performance relationships. There is nothing wrong with any of those suggestions. However, obviously, listing the "Ten Southwest Practices" is far, far easier than convincing or inspiring most (if not all) people in another organization to follow them all day, every day, year after year. And it is even more difficult to create such buy-in when an organization is undergoing extensive growth and sustains it profitably as Southwest has. Especially in the ferociously competitive airline industry, the Yoda's admonition is correct: "Do or do not. There is no try."

Starbucks - An Amazon Reviewer -Reviewer: polar1353

(Part corporate autobiography, part refutation of objections from Starbucks' detractors, this history of this successful coffee company details the ideas and values that helped Starbucks become what it is today. Schultz's enthusiasm for coffee (and for life) percolates throughout the book, providing a high-energy and seemingly caffeinated read.

Most interesting in the book is the sociological analysis of why Starbucks has become so huge. The author suggests that Americans are starving for a "third place" apart from work and home where we can sit, converse, and build relationships. This yearning for community has been met in some small way by local coffeehouses and coffee bars across the country.

Also fascinating are specific episodes such as the creation of Frappucino and the company's forays into markets such as coffee ice cream. In this the company demonstrates its remarkable ability to innovate and adapt its product without losing sight of its core business.

In some parts, the author seems a little defensive, which is not surprising considering the attacks Starbucks has had to fend off in recent years. Schultz does an admirable job of providing the Starbucks side of the story, though many readers may suspect that this is little more than corporate P.R. spin control.

Schultz's unbridled optimism may leave some readers feeling like the rags-to-riches story is yet another pipe dream available only to those rare entrepreneurs blessed with the inspiration, motivation and connections needed to make it in corporate America. What about the average Joe? The Starbucks success story is indeed remarkable, but whether or not Starbucks is the business paradigm for the next millennium is yet to be determined.

The Relationship Economy - UPEI Jan - March 2003

I will be teaching a new course at UPEI online Jan - March 2004. Here is a brief introduction of what we will be looking at. The full course outline is available on the link. It is listed at UPEI as 486V The Customer Revolution

The Customer Revolution - The Relationship Based Business Model - Turning Our World Inside Out

Introduction We are so encultured by the traditional model for organization that we no longer think about it. It is just how things are. When anyone becomes unconsciously captured by an idea, they are vulnerable to a new and better one. The Ford production model was invented a 100 years ago this year. It has been so successful that it has taken over every aspect of how we organize to do work – not only in business but in government, education and healthcare.

But, in the last 5 years, many leading firms that use this model are being threatened with extinction. The discounters have overwhelmed the full service airlines. In retailing, Kmart is bankrupt and many of the past retail leaders such as Home Depot and the Gap are really struggling. In book-selling, Amazon has shaken the industry to the core. In PC’s there is only HP left to confront Dell. In food, McDonalds seems mortally wounded and cannot appear to help itself.

We are also seeing the public sector struggle. Our K/12 education system is not delivering. Drop out rates are close to 30%. Boys are seriously underachieving. Our healthcare system is becoming too expensive and risks being overwhelmed by the advent of the seniors’ demographic bulge. Those that try and improve things by applying the old model harder and faster seem to get even further behind. So what is going on? This course will help shed light on this turning point.

A new model for organizing for work both in business and in the public sector has arrived.

When applied well, it destroys those that still use the traditional model. It has enough practitioners now that we can see how it works and we can extract the lessons so that we can apply it ourselves. Understanding both the old and the new model will become a survival issue. This course will look below the surface of the Ford Model and reveal how it really works. Why? Because we have taken it for granted and we no longer question it or even see its rules and how they work. We will put the traditional organization into the MRI and see why using the Ford model is a fatal condition. .

We will look at eBay, at Amazon, at Dell, at the Discount Airlines, at Wal*Mart and we will discern from their activities, a new model emerging that has a radical approach to costs and a radical approach to value. We will see that at its heart the new model has a radically different set of assumptions about power and about relationships. We will see what it means to make the shift from a transaction economy to a relationship economy. We will see how these firms have revolutionized costs. We will see how they have found value in emphasizing community. We will see why in most cases it is much more personally rewarding to work in this type of organization.

We will look at the demographic and cultural forces that underpin this new model and we will look at some of the new Social Software that is transforming the customer and workplace interface.

We will speculate what this new model means for business and all institutions in Atlantic Canada. We will explore the “Hick” effect – many of the new leading organizations have been born in small town cultures. We will also explore what this model means for education and healthcare delivery. Finally we will explore what this means for your personal choices and for your work life.

Course Objectives
• To use a series of case studies on eBay, Amazon, Dell, Wal*Mart and Southwest & Ryan Air to develop an explicit understanding of the key features of the new model
• To understand the origin and the application of the Ford model in all sectors of organization
• To explore the new Darwinian process of how the small and the nimble destroy the large and the powerful
• To understand the cultural aspects of this shift and how they connect to a major cultural shift in society
• To speculate on how this model can be applied to business in Atlantic Canada
• To understand how the new model may be applied to parts of the public sector such as education and health
• To explore what this model means for each of us as individuals

This link will take you to the course outline

Meaningful Differences - A review

The quantity and the quality of how we talk with our very young children has a major impact on their development. This work was published in 1995 by Hart and Risley. Here is a link to the summary

.

Snip

Hart and Risley delved deeper into the richness of the parent-child interactions. They developed a set of five quality indicators, including vocabulary, sentence structure, number of choices given to the children, responsiveness to the children's speech, and the emotional quality of the interactions. These features accounted for a significant amount of variance in the children's vocabulary growth, vocabulary use and IQ scores at age 3, and were better predictors than race, gender or birth order. These differences held up at age nine, when the children were again tested for vocabulary and language skills.

Why would parental speech have such an impact on children's development? The authors discuss some of the developmental functions of language. Vocabulary defines and labels a child's experience in terms of the family culture. Language reflects the parent's view of what the child should notice and think about the world, family and self. In addition, the affect associated with language makes human sounds distinctive and, hopefully, pleasant.

This latter point was another striking research finding. Of the three socioeconomic levels studied, only the children in welfare families heard feedback that was overwhelmingly (80 to 90%) negative. This negative tone surely affects the children's self-concept, motivation level and expectations.

Here is a link to their book

My New Web Course at UPEI

Download file

This is the course on business and the Natural Step that I am teaching this fall at UPEI.

Question for you - when I teach using the UPEI platform I teach those of you that need a university credit. The costs are commensurate at about $400. I have a portfolio of courses liike this on business and the natural world. Would there be an interest in joining a course like this without a credit for say $150 the purpose being to learn rather than to get a credential? What a concept!