THE AGENDA
What Business Must Do to Dominate the Decade
Nine powerful and practical business ideas for today’s
world of fierce competitors and even fiercer customers.
Copyright 2001 by Michael Hammer
These are tough times for business. Pressures from all sides are greater than ever. The old solutions don't work anymore, and the silver bullets of the late 1990s have proven to be hollow. Serious businesspeople know there is no simple solution, no single answer. They need a whole tool kit of new ideas and new techniques. That's what The Agenda delivers.
Michael Hammer, author of Reengineering the Corporation, the defining business book of the 1990s, has uncovered the secrets of today's best companies. He has worked long and hard to identify how these companies consistently out-execute their competitors, and he reveals what he has learned in The Agenda. This breakthrough book spells out an action plan for the twenty-first century.
MAKE IT EASY FOR YOUR CUSTOMERS TO DO BUSINESS WITH YOU
Present a single face to your customers.
Work in different ways for different classes of customers
Know what your customers will ask for before they do.
Make your customers’ experience a seamless one.
Let customers do more for themselves.
Measure the things that customers really care about.
Make yourself easy to do business with. Your customers’ biggest gripes aren’t about your products or services per se; they center on what a royal pain your products are to order, receive, and pay for. Take a long hard look at yourself from your customer’s point of view, and then redesign how you work to save them time, money, and frustration.
Agenda Item 2 (page 49)
Think of yourself as a provider of solutions, rather than of products or services.
Distinguish between what you are selling and what your customer is buying.
Take a broad view of your customers’ underlying problems that go beyond you and your products.
See what your customers do with what you give them, and either do it for them or help them with it.
Price in terms of value rather than cost.
Add more value to your customers. To avoid the trap of commodization, in which you fight for a minuscule margin against a horde of look-alike competitors, you need to do more for your customers. Don’t drop your product or service at the customer’s door. Go through the door, see what the customer does next, and do it for him.
Agenda Item 3 (page 78)
Obsess about the end-to-end processes that create all value for your customers.
Ensure that every person understands processes and his or her role in them.
Appoint senior process owners to measure, manage, and improve the processes.
Create a process-friendly company by aligning facilities, compensation, and structure around processes.
Develop a culture of teamwork and shared responsibility.
Set up a process council so that you don’t replace functional silos with process sewers.
Manage in process terms everything you do to make your company better.
Make process into a way of life.
Obsess about your processes. Customers care only about results, and results come only from end-to-end processes. Manage them, improve them, appoint owners for them, and make everyone aware of them. It’s the only way to achieve the performance that customers demand. Become a process fanatic. Process is the Clark Kent of business ideas. Seemingly mild and unassuming, process is a revolutionary way of thinking about work in customer terms. It blows away overhead and cost, confusion and delay. It is the discipline that makes outstanding performance a matter of design rather than luck. Process is the way to make both customers and shareholders happy and to keep them that way on a sustained basis.
Agenda Item 4 (page 100)
Recognize champions and heroics for what they are: signs of dysfunction.
Leverage your people’s creativity with the power of process.
Make innovation repeatable through detailed process design.
Don’t let people tell you that creativity conflicts with process.
Be resolutely committed to discipline and teamwork.
Accept the fact that not everyone will get it.
Turn creative work into process work. Innovation doesn’t have to be chaotic. Bring the power of discipline and structure to sales, product development, and other creative work. Make success in these areas the result of design and management, not luck; luck has a nasty habit of giving out when you need it most.
Agenda Item 5 (page 124)
Take measurement out of accounting and make it part of every manager’s job.
Abandon the measures you have inherited from the past.
Develop a model of your business that links your overall goals to specific things you control.
Put in place measures and targets for the key items in this model.
Design measures that are objective, timely, easy to calculate, and easy to understand.
Make ongoing performance improvement inevitable by incorporating it into a disciplined measurement-based process.
Let facts and measurement triumph over intuition and opinion.
Use measurement for improving, not accounting. Most of your measurements are worthless; they tell you what has happened (sort of) but give you no clue as to what to do for the future. Crate a model of your business that ties overall goals to things you control; measure the items that really make a difference; and embed measurement in a serious program of managed improvement.
Agenda Item 6 (page 146)
Get over the idea of sharply defined business units with autonomous managers.
Redefine manages as representing markets, products, or processes, rather than as having total control over them.
Make managerial teamwork and cooperation the rule rather than the exception.
Teach managers to put the needs of the enterprise as a whole first.
Employ rewards that emphasize the group over the individual.
Substitute inspirational leadership for formal structure.
Loosen up your organizational structure. The days of the proudly independent manager running a sharply defined unit are over. Collaboration and teamwork are now a necessary in the executive suite as on the front lines. Teach your managers how to wok together for the good of the enterprise rather than stab each other in the back for narrow gain.
Agenda Item 7 (page 164)
Make maximizing value and minimizing cost for the final customer your number-one priority.
Turn your distribution channels into communities that work together for common goals.
Use the Internet to share information and streamline transactions.
Ensure hat each community participant is doing what it does best.
Drive out redundant work, especially the repetitive buying and reselling of product.
Be prepared to redefine traditional roles in unconventional ways.
Sell through, not to, your distributor channels. Don’t let your distribution channels blind you to your final customer, the one who pays everyone’s salaries. Change distribution from a series of resellers into a community that works together to serve that final customer. Be ready to redefine the roles of everyone involved in order to achieve that end..
Agenda Item 8 (page 197)
Root out the remaining sources of overhead, cost, and inventory by redesigning inter-enterprise processes.
Streamline the connections between your processes and those of your customers and suppliers.
Relocate work between companies so that it is done by whoever can do it best.
Coordinate through open sharing of data between companies.
Exploit the opportunities of collaborating with co-customers and co-suppliers.
Face head-on the deep cultural challenges of inter-company cooperation and information sharing.
Push past your boundaries in pursuit of efficiency. The last vestiges of overhead lurk, not deep in your company, but at its edges. Exploit the real power of the Internet to streamline the processes that connect with customer sand suppliers. Collaborate with everyone you can to drive out cost and overhead.
Agenda Item 9 (page 221)
See your business not as a self-contained company but as part of an extended enterprise of companies that work together to create customer value.
Define your company in terms of the processes you perform, not the products or services you create.
Identify and strengthen the key processes at which you excel.
Outsource everything else to someone better equipped to do it.
Learn to work closely with others, not just on your own.
Be prepared to rethink your company’s identity and strategy in fundamental ways.
Lose your identity in an extended enterprise. Get past the idea of being a self-contained company that delivers a complete product. Get used to the notion that you can achieve something only when you virtually integrate with others. Focus on what you do best, get rid of the rest, and encourage others to do the same.
1. Integrate and focus your efforts. All nine agenda items are not to be treated as independent and unrelated project – they are unified and must be incorporated as such. Successfully managing this unified initiative will require very strong skills in program management, the art of coordinating a vast number of projects. Project management must be one of every company’s core competencies. Wthout it, implementing the Agenda will degenerate into random chaos.
2. Give more attention than you think is needed to people issues. The technical problems are the easiest to solve. The hardest part is getting people to let go of the methods they have become accustomed to, and teaching them how to base decision making on quantitative measures, and crating a culture that values hard measurement data over opinions and instinct. Too often only the “hard” issues are addressed. Recommend to spend one third of the budget on each of the following: design and implementation of the change; supporting technology; people issues. Grow people through training, education, communications, and change management. Don’t lowball this area!
3. Manage different constituencies differently. People in a company do react the same way to change. Consider the 20/60/20 rule: when a major corporate initiative is announced, 20% receive it enthusiastically; 60% are in the middle (and here the game is won or lost); 20% are negative and are adamantly against the change – any change. The first 20% pose a risk in that if the initiative is backed away from, they will feel betrayed. Concentrate on the middle 60% - they are the reason you need effective program management. The top 20% does not need to be convinced; and the bottom 20% will never be convinced.
4. Display committed executive leadership. Step one is for the leader to stake his credibility on the success of the change. They should commit to specific goals up front and in public (including financial or operational results). Step two is to commit the required recourse and hold the line throughout the budgeting process. Also, dedicate some of the organization’s “best and brightest” to the effort. Step three is the executive becoming and staying personally engaged in the project – be involved and stay informed. Step four is the leader must display a passion for the change. Finally, committed leaders demand – not request – widespread participation and engagement in making the change happen, and they hold line managers accountable for achieving the results. Move quickly to remove any members of the senior management team who do not embrace change and whose lack of support is recognized in the company. This will make believers of even the most cynical and skeptical.
5. Communicate effectively. To create a customer-centered company, everyone in the company will have to work extra hard, learn new skills, cope with unfamiliar problems, and in general rise to the occasion. If people do not understand, don’t believe in, or don’t care about what is going on, they won’t do any of these things. The way to make them understand, believe, and care is by communicating with them. Note the following five key principles regarding effective internal communication in support of major change:
There is no such thing as over-communication.
Make communications stand out.
Never lie.
Enlist top management in communications.
Make communications two-way.
6. Deploy in a series of steps. Traditional implementation strategies do not work for implementing the Agenda. The reason is that it requires people to think differently and do things differently than they have before. Thus unexpected problems can occur, problems will inevitably arise, and time frames will prove impossible to estimate. You do not want to botch the implementation. So, implementation must proceed in a series of smaller steps, each of which represents progress toward the ultimate destination. Each of these steps must be done quickly, and it must deliver some concrete payoff. Build on successes. Eventually, when the full set of capabilities has been deployed, the overall relationship between manufacturer and intermediary will have been transformed. Getting to that point has been organized as a number of smaller, more manageable steps, rather than one massive, organization-paralyzing one.