Preface
Many organizations encounter ferocious competition in the marketplace. Try as they might to set themselves apart, any static, snapshot differences are fleeting and temporary. Identify and meet some unfilled customer need in an untapped market in a novel fashion and challengers will soon flood in. Find a preferred supplier and others will quickly clamor to gain access. Employ a new scientific insight or technological approach and everyone else will quickly adopt it. The result of such market fluidity is often intense, cutthroat rivalry. Yet here and there, we see companies and organizations, in and out of the private sector, that manage to stay ahead of the pack for years or even decades at a time. Displaying combinations of speed, agility, responsiveness, and endurance, they see and seize opportunities and, by the time rivals have responded, the leaders have raced on to further opportunities, leaving competitors in their wake.
Examples of these pack-leading rabbits, high-velocity organizations, whom everyone else chases but never catches, abound. Toyota generates remarkable profits year in and year out, decade after decade, based on its capacity to race past and stay ahead. While competitors sought to emulate the company’s early success, launching their own affordable, reliable small cars, Toyota kept improving in that niche while adding trucks,
SUVs, and minivans to its portfolio, building new brands like the Lexus and Scion, introducing new technology like the Prius’s hybrid drive system, and “globally localizing”—transforming itself from an exporter to a company with design and production operations worldwide.
Southwest Airlines has recorded profits for more than 30 years while its competitors struggle to hang on, with other storied airlines going out of business. It has pioneered new routes while pressing ahead with service improvements, speed in basic operations, and continued increases in efficiency. Alcoa has had great economic success while making itself the safest large manufacturer in the country—cutting the risk of on-the-job injury by more than 95 percent while other manufacturers managed only a fraction of that improvement.
There are other examples, perhaps less well known but also extremely impressive. In the high-tech world of integrated circuit manufacturing, “fabs” supply similar products to the same electronics companies and purchase equipment from the same vendors. They level their own playing field by participating in standards-setting industry consortia. Yet some fabs support far greater product variety, generate less scrap, and require less time from start to finish, so they are better able to respond to changing market needs quickly and economically. As for noncommercial examples, the U.S. Navy’s Nuclear Power Propulsion Program has recorded one milestone after another since its inception in 1948. Yet despite all that was required to launch the first nuclear-powered submarine, the USS Nautilus, in 1954, and despite the countless hours of nuclear reactor operation and the countless miles logged by nuclear-powered warships since then, there hasn’t been a single injury due to reactor failure. The program’s chief rival, the Soviet Navy, has a far less enviable record, littered with accidents, loss of crews and ships, and environmental damage, while NASA, also responsible for manned missions in a hostile environment, has lost the crews of Apollo 1, Challenger, and Columbia. In the much different world of medical care, there are hospitals that deliver far better care to many more people at far less cost than is typical, even though they are treating the same ailments, using the same medical science, employing people trained at the same institutions, and are subject to the same regulations and payment systems.
Since the examples I have mentioned so far (and the examples I will mention later in the book) are so very dissimilar in their missions and circumstances, you might think it’s enough to say that there are some organizations that are just plain better than others at doing what they do. But in fact, the organizations that I will discuss in Chasing the Rabbit have something more in common. They face a common problem and have identified a common solution, which keeps them performing way ahead of the pack and always getting better (the two go together). The problem is common to more than the front-running rabbits. That the solution has been used successfully by such a wide variety of organizations for such a variety of purposes indicates that the general theory I am presenting is independent of any particular industry or activity, and that there is a world of excellence waiting to be achieved in any number of endeavors. I hope Chasing the Rabbit contributes to that.
The common problem these organizations face is that they produce complex products or provide complex services, requiring many varied forms of skill and expertise. Their operations, the “systems of work” that involve many people of many disciplines using equipment of various types, are correspondingly complex, requiring that the efforts and contributions of many specialists be integrated and coordinated in a harmonious fashion. The difficulty is that the more numerous and varied the people, machines, and materials involved, the more ways they can interact with each other, often with unanticipated results. Eventually, so much is connected to so much else that the system becomes “unknowable.” No matter how much effort and brain power go into designing a complex operation, it is impossible to design it perfectly and to predict how it will behave under every circumstance. It is in designing and operating their complex work—how they deal with the problem of unknowable, unpredictable systems—that the front-running, high-velocity rabbits set themselves apart. Their approach and its results are the subjects of this book.
Many of the organizations that I have studied, and many more with which you are familiar, believe that they manage systems of work in a purposeful fashion. But in fact, they don’t. Rather, they manage individual functions and specialties, with these pieces coming together through hard work, goodwill, and improvisation. Your typical hospital, for instance, will have defined hierarchies, career paths, and professional standards within departments—internal medicine, pharmacy, and nursing, for example—but will have no one trained in or responsible for the start-to-finish process of prescribing, dispensing, and administering medication, which cuts across all three of those departments. They’ll have great orthopedists, anesthesiologists, and therapists, but no one will be responsible for the start-to-finish process of hip replacement or knee repair. I’ve worked in an auto supplier’s plant in which stamping, welding, and shipping operated as individual silos with no one responsible for converting customer orders and raw materials into successful shipments. It was left to the daily production-control meetings and a fair amount of expediting to achieve the appearance of synchronization. I’ve been in design settings in which engineering, quality assurance, installation, and customer service are each managed as if they operated largely independently; in fact, they are quite interdependent.
This is not the way in the high-velocity organizations we will meet. As much as they strive to advance their competence within disciplines, they understand that all the work they do has to be in service to the boundary-spanning processes by which they create value for their customers.
There is also a dynamic difference beyond the structural one just discussed. Any complex system will be riddled with a stream of unavoidable nuisances and inconveniences, the inevitable consequence of imperfect people trying to design perfectly something very complex. Most of the time these nuisances and inconveniences are just coped with or worked around. Most organizations assume that even the best operations they can devise will have a certain amount of unavoidable noise or chatter and that a certain amount of effort will always be siphoned off into firefighting; that’s just the way life is.
High-velocity organizations adopt the opposite attitude, and it makes all the difference. They treat each problem, each instance of something not working out the way they expected it to, as the voice of the operation itself, saying, “You may have created me, but you still don’t know me as well as you should. Look harder, learn more, and we’ll get along better.” Operations in these organizations are designed not only to do the job that needs to be done but to continually let the organization know that it still doesn’t know all there is to know. When the operations speak, these organizations listen, learn, improve, and keep a sharp eye out for the next lesson.
What’s more, they make sure that the lesson learned here and now is spread throughout the organization. And they make sure that their managers know how to work this way and how to train others to work this way.
All of this will be discussed in detail in Chasing the Rabbit, with plenty of examples of things going right and things going wrong, lessons being learned and lessons being ignored. The failures can be heartbreaking and infuriating, but I believe you will find the successes inspiring. They are within your reach, although not without effort. The successes of high-velocity, high-performance organizations do not depend on mustering a workforce all possessed of some extraordinary talent. With hundreds, thousands, and even tens of thousands of employees, that would be quite impossible. What makes these organizations high-velocity is the way they deliberately and consistently make the best use of the ordinary distribution of human talent, while their competitors let so much of it be ground between the wheels of repetitive frustration, firefighting, and failure.