Monday, February 16, 2009

Why this case study?

You may be wondering why I'm rehashing experiences in, of all things, the car industry, that are 20-years old.

First of all, there's nothing unique about the car industry. I can provide similar successful case studies from insurance, health care, software, education, high-tech, R&D, hospitality, food, energy, and manufacturing settings, on four continents. I like the Romeo example because the structures and processes were very different from those used in traditional models and because the business was extremely successful as a result. Romeo is an example a very flat, adaptable, largely self-managing organization built around managers and employees who were taught to play new and different roles. Romeo is also still successful today as are most of the other examples I noted above. So innovative management models have considerable staying power and have proven themselves to be more than just a flash in the pan.

In Ford's case, upper management never really liked the decentralized model as it took the illusion of control away from executives at division and above. The outstanding results obtained at Romeo also made other engine plant managers look bad so they spent their time bad-mouthing the innovation, trying to find fault with it rather than trying to learn from it (I thought the UAW was also culpable in this regard). However, the plant performed so well that nobody dared mess with it in case they screwed it up. Sadly, Ford didn't choose to spread these ideas through the rest of the company, even though previous successful examples had been demonstrated in other divisions (components, stamping, body assembly). No wonder Ford and the rest of the industry is in such trouble today. G.M., Ford and Chrysler have eliminated a total of 120,000 manufacturing jobs in the last three years. They also laid off over 15,000 white collar employees last year with more to come. Sometimes, you have to wait for a major, major crisis or for a whole generation of managers to die off before new thinking is possible.

So, I suggest you look at the design process that was used and how the innovative organizational arrangements were made to work as the key learning ideas in this example. Let me know if you find this useful and if have any questions or comments.


Jay Sea said...

I'm finding the lessons of great use. Thank you

Jay Sea said...

And I should also add that I find them relevant to software and product development today and similarities to 'Agile Development'.