Inverting the Paradox of Excellence: How Companies Use Variations for Business Excellence and How Enterprise Variations Are Enabled by SAP, 1st Edition (Hardback) book cover

Inverting the Paradox of Excellence

How Companies Use Variations for Business Excellence and How Enterprise Variations Are Enabled by SAP, 1st Edition

By Vivek Kale

Productivity Press

442 pages | 90 B/W Illus.

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Description

Over time, overemphasis and adherence to the same proven routines that helped your organization achieve success can also lead to its decline resulting from organizational inertia, complacency, and inflexibility. Drawing lessons from one of the best models of success, the evolutionary model, Inverting the Paradox of Excellence explains why your organization must proactively seek out changes or variations on a continuous basis for ensuring excellence by testing out a continuum of opportunities and advantages. In other words, to maintain excellence, the company must be in a constant state of flux!

The book introduces the patterns and anti-patterns of excellence and includes detailed case studies based on different dimensions of variations, including shared values variations, structure variations, and staff variations. It presents these case studies through the prism of the "variations" idea to help you visualize the difference of the "case history" approach presented here. The case studies illustrate the different dimensions of business variations available to help your organization in its quest towards achieving and sustaining excellence.

The book extends a set of variations inspired by the pioneering McKinsey 7S model, namely shared values, strategy, structure, stuff, style, staff, skills, systems, and sequence. It includes case history segments for Toyota, Acer, eBay, ABB, Cisco, Blackberry, Tata, Samsung, Volvo, Charles Schwab, McDonald's, Scania, Starbucks, Google, Disney, and NUMMI. It also includes detailed case histories of GE, IBM, and UPS.

Reviews

Inverting the Paradox of Excellence is a very comprehensive analysis of why good companies fail; and to maintain excellence, the company must be in a constant state of flux! Very convincingly, Vivek Kale demonstrates that competitiveness is not a state of being but a process of becoming excellent by monitoring and continuously adapting to the changing market realities.

—Jagdish N. Sheth, Charles H. Kellstadt Professor of Marketing, Goizueta Business School, Emory University, U.S.A

Vivek Kale offers many invaluable insights in his book, Inverting the Paradox of Excellence. Rather than proposing intuitively appealing prescriptions that can easily lead many firms astray, he advances a much more insightful perspective. That is, leaders must embrace the inherent tensions between stability and change; managing for the short-term and creating the future; as well as leveraging (or exploiting) an existing resource base and exploring for new opportunities. Failure is not to be avoided—it can lead to future success! He combines a sound conceptual rationale with many exciting examples of how to engage and benefit from the ‘paradox’ that he expertly communicates to the reader.

—Gregory Dess, Professor of Management, University of Texas at Dallas

Vivek Kale has written a ‘must-read’ book that tackles a challenging subject – what contributes to excellence in an organization and is sustaining. Vivek is very well qualified as an author and cognizant of the difficulty of the formidable task to write this book. He recognizes that previous books on this topic have showcased organizations that have subsequently failed, including bankruptcies. His approach to understand the contributors to business excellence includes a rarely written blend of executive leadership, business architecture, human nature, and technology.

—Gary Cokins, President, Analytics-Based Performance Management LLC; and author of Performance Management – Integrating Strategy Execution, Methodologies, Risk, and Analytics

The book Inverting the Paradox of Excellence offers a compelling look into why even the best companies fail, how the very reasons for their success can also lead to their eventual downfall. This well-researched and enlightening book cites example after example of how companies that maintain excellence have embraced variations as they adapt to a changing market.

—Greg Niemann, author of Big Brown: The Untold Story of UPS

Vivek Kale goes to the heart of the paradoxes of management and business. He draws together many theories and concepts from different disciplines to show how businesses are constantly evolving and changing. Success, as Darwin said, goes to those who can adapt best to their environment. This excellent book shows why adaptation is necessary, and how to do it. Further, taking SAP as a specific example, he shows how enterprise systems enable variations essential for business excellence.

—Morgen Witzel, Fellow, Centre for Leadership Studies, University of Exeter; and author of A History of Management Thought

Table of Contents

PARADOX OF EXCELLENCE

Introduction

Paradox of Excellence

Darwin’s Theory of Evolution

Evolution of Companies

Applications

Enterprises and Paradoxes of Excellence

Paradox of Excellence at Motorola

Excesses of Successes

Rewiring for Wireless

Inverting the Paradox of Excellence at Toyota

Summary

Patterns of Excellence

In Search of Excellence

Bias for Action

Close to the Customer

Autonomy and Entrepreneurship

Productivity through People

Hands-On, Value-Driven

Stick to the Knitting

Simple Form, Lean Staff

Simultaneous Loose-Tight Properties

Built to Last

Clock Building, Not Time Telling

No "Tyranny of the OR"

More than Profits

Preserve the Core/Stimulate Progress

Big Hairy Audacious Goals

Cult-Like Cultures

Try a Lot of Stuff and Keep What Works

Home-Grown Management

Good Enough Never Is

Summary

Antipatterns of Excellence

Seven Strategic Traps

Self-Destructive Habits of Good Companies

Self-Destructive Habit #1: Denial—The Cocoon of Myth, Ritual, and Orthodoxy

Self-Destructive Habit #2: Arrogance—Pride before the Fall

Self-Destructive Habit #3: Complacency—Success Breeds Failure

Self-Destructive Habit #4: Competency Dependence—The Curse of Incumbency

Self-Destructive Habit #5: Competitive Myopia—A Short-Sighted View of Competition

Self-Destructive Habit #6: Volume Obsession—Rising Costs and Falling Margins

Self-Destructive Habit #7: The Territorial Impulse—Culture Conflicts and Turf Wars

Seduced by Success

Success-Induced Trap #1: Neglect—Sticking with Yesterday’s Business Model

Success-Induced Trap #2: Pride—Allowing Your Products to Become Outdated

Success-Induced Trap #3: Boredom—Clinging to Your Once-Successful Branding after It Has Become Stale and Dull

Success-Induced Trap #4: Complexity—Ignoring Your Business Processes as They Become Cumbersome and Complicated

Success-Induced Trap #5: Bloat—Rationalizing Your Loss of Speed and Agility

Success-Induced Trap #6: Mediocrity—Condoning Poor Performance and Letting Your Star Employees Languishing

Success-Induced Trap #7: Lethargy—Getting Lulled into a Culture of Comfort, Casualness, and Confidence

Success-Induced Trap #8: Timidity—Not Confronting Turf Wars, Infighting, and Obstructionists

Success-Induced Trap #9: Confusion—Unwittingly Providing Schizophrenic Communications

Summary

EVOLUTION OF EXCELLENCE

Variations and Theories of Excellence

Voyage of Charles Darwin

Origin of Species

What Is Evolution through Natural Selection

Publication of On the Origin of Species

Darwin’s Theory of Evolution through Natural Selection

Evolution through Selection in Business

Theories of Excellence

Popper’s Theory of Falsification

Thesis of Falsification

Progress in Science

Kuhn’s Theory of Paradigms

Normal and Revolutionary Science

Progress in Science

Drucker’s Theory of Business

Theories of Enterprise

Birth of Enterprises

Enterprise Perspectives

Mechanistic Perspective

Organismic Perspective

Cocombination of Mechanistic and Organismic Perspectives

Enterprise Core and Context

Summary

DIMENSIONS OF EXCELLENCE

Variations and Enterprise Excellence

Built-for-Variations Enterprises

Strategizing: Shared Values, Strategy, Structure, and Stuff

Shared Values @NUMMI

Strategic Transition @Kodak

Transition from DRAMs to Microprocessors @Intel

Unfettered Exuberance @HP

Coffee as an Experience @Starbucks

Organizing: Style, Staff, Skills, and Systems

Style

Staff

Skills

Systems

Generating Value: Sequence

Approaches to Planning

Toyota Production System

Toyota

Core and Context

Trends and Trajectories

Turning Points, Stimuli, and Limits

Cycles and Recurring Turning Points

Basic Pattern in Cyclical Phenomenon

Industry Level

Business Cycle

Network Effects

Enterprise Level

Vantage Time

Microsoft IE versus Netscape Navigator

Bandwagon Effect

Product Level

Product Life Cycle

Polaroid at the Terminus of its Product Cycle

Platform Effect

Intel’s Microprocessor Platform

Microsoft’s Platforms Strategy

Aspects of Variations

Variable Construction Toys

Architecting for Variation

Principles of Built-for-Variation (or Variation-Able or Variable) Systems

Variation-Enabling Enterprise Architecture and Culture

Framework for Variation Proficiency

Framework for Assessing Variations

Generation of Variations

Rational Drug Design

Combinatorial Chemistry for Generation of Variations

Co-Creation

McKinsey 7S Model

Using the McKinsey 7S Model to Analyze a Company

Extended 9S Model

Shared Values

Strategy

Structure

Stuff

Style

Staff

Skills

Systems

Sequence

Summary

Sources of Variations

Enigma of Xerox

Invention or Pioneering Variations

Lenoir Internal Combustion Engine

Bell Labs Germanium Transistor

Ford Production System

Principles of Flow

Implementation and Execution

Sony Pocket Transistor Radio

3M Thermofax

Psion PDAs

Xerox Alto and MITS Altair

Altair 8800

World Wide Web

Battle of Browsers

Imitation Variations

Otto Four-Stroke-Cycle Internal Combustion Engine

Texas Instruments Silicon Transistors

Toyota Production System

Sony Walkman

Xerox 914 and Cannon Copiers

Digital Copying

Cannon Copiers

Apple Newton and Palm PDAs

IBM Personal Computer

Yahoo!

Search Services

Innovation Variations

Wankel Rotary Engine

Texas Instruments Integrated Circuits

Theory of Constraints

Apple iPod

Xerox Laser Printer

Blackberry PDAs

Smartphones

Apple II

eBay

Summary

Dimension of Variations

Shared Values Variations Ranging from Rules Driven to Values Driven

Acquiring Competitiveness @Cisco

Triggering an Avalanche

Perfecting the Acquisition Strategy

Transformed Priorities @DuPont

Driven by Values @Tata

Whetting the Appetite

Land Rover and Jaguar

Strategy Variations Ranging from Planned to Emergent

Wal-Mart

UPC Codes

Efficiency of Transportation Containers

Variations on Discount Stores

Decentralized Operations

Centralized Information Systems

Human Resources Development through Ownership

Search Economics @Google

Developing the Business Model

Avenues for Growth

Household Innovations @P&G

Ivory

Portfolio of Products

Origin of Brand Management

Profusion of Product Innovations

Structure Variations Ranging from Control to Autonomy

Controlling for Growth @AccelorMittal

Coalescing Steel Ball Gathers Mass

Becoming an Industry Leader

Organizing for Innovation @IBM

Defining a New Approach to Innovation at IBM

Organizing for Growth

EBO Progress

Crossing Boundaries @LEGO

Banishing Boundaries

Supply Chain Optimization

Cocreation of Product with Customers

Digitization of the LEGO Experience

Stuff Variations Ranging from Products to Experiences

Harley Experience @Harley-Davidson

Owning the Harley Experience

Realizing the Harley Experience

Southwest Airlines: Transportation Service rather than a Travel Experience?

Making of a Black Swan

Rejoicing Life @Disney

Style Variations Ranging from Administrational to Transformational Leadership

Being Responsive @Samsung

Fast Innovations

Faster to the Market

Transforming Time @ABB

Cycle by Half

Empowering Ownership @Acer

Networking to the Future

Staff Variations Ranging from Challenging People to Nurturing People

Microsoft

Performance by Challenges @GE

Grooming Performance

Work-Out

Six Sigma

Enriching Work Life @Volvo

Kalmar

Torslanda

Uddevalla

Gent and Born

Skills Variations Ranging from Focus to Breadth of Skills

Driving for Perfection @UPS

Satisfaction from Standardization @McDonald

Fruits of Empowerment @NUMMI

Systems Variations Ranging from Mandatory to Discretionary

Operating Systems @McDonald

Why Less Is More @Dell

Happy Auctioning @eBay

eBay’s Evolving Business Model

Sequence Variations Ranging from Mass Production to Mass Customization

Ford’s Mass Production (which Eventually Inspired Lean Production)

Evolution to Virtual Assembly Lines

Furnishing Self-Assemblies @IKEA

Modular Architecture and Design @Scania

Module- and Component-Based Design and Engineering

Growing Modular

Modularizing for Competitiveness

Summary

BUSINESS EXCELLENCE THROUGH VARIATIONS

General Electric (GE)

Coffin (1913–1922)/Swope (1922–1939) Era

Cordiner Era (1950–1963)

Borch Era (1964–1972)

Jones Era (1973–1981)

Welch Era (1981–2001)

Immelt Era (2001–)

8.6.1 Ecomagination

Summary

IBM

Punch Card Machines

Vacuum-Tube-Based Computers

Transistor-Based Computers

Minicomputers

Personal Computers

Workstation Computers

Corporate Reorganization

Corporate Renewal

Systems Integrator

Renewed Computer Hardware

Renewed Computer Software

Renewed Consulting Services

E-Business

E-Business on Demand

Global Technology Services

Global Business Services

Computer Software

Software Integration

Systems and Technology

Cloud Computing

Summary

UPS

Retail Services

Common Carrier Services

International Services

Air Carrier Services

e-Commerce Services

Logistic Services

SCM Services

Summary

INDUSTRY EXCELLENCE THROUGH VARIATIONS

Automobile Industry

Evolution of the Automobile

Evolution of Auto Species

Evolution of New Product Development

Evolution of Manufacturing Operations

Manufacturing Systems

Relationships with Suppliers

Cost-Reduction Efforts

Patterns of Variations

Evolution of Production Operations

Globalization

Production Locations

Excess Capacity

Evolution of Market Operations

Recession 2008

Current Patterns of Variations

Summary

BUSINESS EXCELLENCE AND SAP

Business Excellence at SAP

SAP R/1

SAP R/2

SAP R/3

Decentralized Operations

Centralization

Internet’s IT Industry Reconfiguration

mySAP.com

Reorganization: Verticalization

Trifurcation of Development Group

Reconsolidation

Global Operations

R/3 Enterprise

SAP NetWeaver

Outsourcing

mySAP Business Suite

Small and Medium Business Enterprise

SAP All-in-One

Business One

ERP Market Saturation

Restrategizing

SAP HANA

Summary

Understanding SAP ERP

Introduction to SAP ERP

History of ERP

What Is ERP?

ERP Transforms the Enterprise into an Information-Driven Enterprise

ERP Fundamentally Perceives an Enterprise as a Global Enterprise

ERP Reflects and Mimics the Integrated Nature of an Enterprise

ERP Fundamentally Models a Process-Oriented Enterprise

ERP Enables the Real-Time Enterprise

ERP Elevates IT Strategy as a Part of the Business Strategy

ERP Represents a Major Advance on the Earlier Manufacturing Performance Improvement Approaches

ERP Represents the Departmental Store Model of Implementing Computerized Systems

ERP Is a Mass-User-Oriented Application Environment

Why Use ERP?

Management by Collaboration

Information-Driven Enterprise

Process-Oriented Enterprise

Value-Add-Driven Enterprise

Virtual Enterprise

Enterprise Knowledge as the New Capital

Information as the New Resource

ERP as the New Enterprise Architecture

Enterprise Business Processes

SAP Business Suite

mySAP Applications

mySAP ERP

mySAP CRM

mySAP SRM

mySAP SCM

SAP Components

SAP ECC

SAP SCM

SAP PLM

SAP NetWeaver

People Integration

Information Integration

Process Integration

Application Platform

SAP Enterprise Performance Management (EPM)

SAP Industry-Specific Applications

SAP Composite Applications

SAP Small- and Midsize Business Applications

mySAP All-in-One

SAP Business ByDesign

SAP Business One

Summary

Business Excellence through Variations Using SAP

Enterprise Change Management with SAP

The Learning Organization

Background of BPR

Value-Added View of Business Processes

Enterprise BPR Methodology

Strategic Planning for Enterprise BPR

Identifying the Business Processes within the Company

Selecting Business Processes for BPR

Creating Process Maps

Analyzing Processes for Breakthrough Improvement

Innovative Breakthrough Improvement in Processes

Implementing Reengineered Processes

Measuring Performance of Reengineered Processes

BPR and SAP Implementation

SAP Reference Model

Relevant Significant Concepts of SAP

Implementation Guide

Features of Project IMG

Using Project IMG for Customizing SAP

Implementation of SAP Standard Functionality

Selecting the Most Critical Processes

Implementing Best-of-Business Processes

Centralized Base Reference Configuration

Changeability of SAP-Driven Enterprises

Real-Time SAP Operations Make Processes Transparent

Integrated SAP Operations Eliminate Handoffs

Converting Changed Business Processes into SAP Functionality

SAP Configuration

SAP Customization

Advanced Business Application Programming

Legacy System Migration Workbench

Java and the SAP NetWeaver Development Studio

SAP NetWeaver Composition Environment

SAP and Change Management Program

Change Champions: Core Team

Change Facilitators: Super Users

Change Agents: End Users

Why Are SAP Implementation Programs So Complex?

Configuration through Implementation Guide

Computer-Aided Software Implementation

SAP as Populated CASE Environment

SAP Implementations and Expert Systems

Why SAP Programs May Sometimes Be Less than Successful

Enterprise Variations Using SAP

Summary

Appendix

References

Index

About the Author

Vivek Kale has more than two decades of professional IT experience during which he has handled and consulted on various aspects of enterprise-wide information modeling, enterprise architectures, business process re-design, and, e-business architectures. He has been Group CIO of Essar Group, the steel/oil & gas major of India, as well as, Raymond Ltd., the textile & apparel major of India. He is a seasoned practitioner in transforming the business of IT, facilitating business agility and enabling the Process Oriented Enterprise. He is the author of Implementing SAP R/3: The Guide for Business and Technology Managers, Sams (2000), A Guide to Implementing the Oracle Siebel CRM 8.x, McGraw-Hill India (2009) and Guide to Cloud Computing for Business and Technology Managers: From Distributed Computing to Cloudware Applications, Chapman and Hall (2014).

Subject Categories

BISAC Subject Codes/Headings:
BUS042000
BUSINESS & ECONOMICS / Management Science
BUS053000
BUSINESS & ECONOMICS / Quality Control