We have shifted to this Age of Mass Customization, a term coined by Stan Davis in his 1987 book Future Perfect. The most challenging reality of this shift is that it comes right on the heels of a 100-year long era that is almost in every way its complete opposite…the Age of Mass Production.
In the Mass Production days, scientific management was applied to minimize movement (through time and motion studies) as man did the work that machines could not. The management class was born, with its job being to ensure that workers complied with the proven ways to get work done. Decisions were centralized and innovation was the job of the functional experts. This management method made sense in an era of Mass Production.
However, like a spark to gasoline, the change ignited by the Internet accelerated everything. Customization was becoming more commonplace and technology helped make it possible—in today’s wired world, everything you want is only a click away. And as consumers we have nearly infinite options. Thirty years ago, if I wanted a logo design I would call my sister’s girlfriend who was a graphic designer. Today, I search Google for “logo design” and I get 211 million links to sources. And businesses like www.99designs.com offer crowd-sourced logo designs from competing designers from around the world in a couple of days for an amazing price. It’s all about instant gratification.
But there’s trouble in River City. The shift in the economy demands a shift in how we manage our businesses. We are moving from centralized innovation and decision making to decentralized innovation and decision making. Could any shift be more radical? Could any shift call more loudly to leaders today that doing business as usual is no longer viable?
As stated by Jeffrey Immelt, the CEO of General Electric, “This economic crisis doesn’t represent a cycle. It represents a reset. It’s an emotional, raw social, economic reset. People who understand that will prosper. Those who don’t will be left behind.”
The slow recovery may not be a slow recovery at all, but instead may well be the grinding of gears as we shift from one system to another. In my book Business at the Speed of Now: Fire Up Your People, Thrill Your Customers, and Crush Your Competitors, I make the point that the shift is both challenging to see and even more challenging to address.
These challenges are complicated because one of the downsides of Mass Production management is its debilitating track record of employee engagement, which is an essential element of real-time customer service. The Gallup Organization reports that only 30 percent of employees find their workplace engaging (meaning, they willingly take action without being told to help the business succeed). The remaining 70 percent show up and do what they are required and often less. Shockingly, these numbers have not changed in 25 years.
With so many disengaged workers, the chances of succeeding in a Mass Customization world borders on impossible. So what’s a leader to do?
Making the shift to Mass Customization begins with seeing it; then, as a leader, you must face the reality that you must re-engineer your management system. Lean, Six Sigma, Kaizen, Team Building, Change Management and all the other tools will not transform your underlying logic for how you manage the enterprise.
It begins by recognizing management’s new job is to enable its people to say “Yes” before that real-time, value-creating moment arrives with a customer. That demands clear direction, a line-of-sight for every employee to that direction, healthy accountability, a common business language everyone understands, complete issue transparency, and it demands that employees have the appropriate resources, tools and skills to engage. That’s what a modern management system must do.
Our modern economy operates under a new set of rules. You need to understand that to understand its implications to how you run your business.