To maximize long term profits, companies and their managers must focus more on win/win collaboration with business partners rather than using coercion and adversarial tactics to force compliance. Stallkamp pioneered new strategies for collaboration as President of Chrysler Corporation. His breakthrough strategy (SCORE--Supplier Cost Reduction Effort)turned Chrysler around and into the world's most profitable automaker. Organizations ranging from Dell Computer to the U.S. Air Force are now profiting from the lessons they learned from Chrysler. Stallkamp offers a complete blueprint for deploying strategic collaboration with suppliers, customers, and employees. Learn how Stallkamp overcame the pitfalls and cultural obstacles. Stallkamp reveals detailed metrics that demonstrate the remarkable cost and quality improvements strategic collaboration makes possible. Stallkamp's proven techniques address strategy, communication, leadership, measurement, information sharing, responsibility sharing, and more. Simply put, this is everything needed to establish collaborative relationships that drive unprecedented business value.
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THOMAS T. STALLKAMP is Founder/Principal of Collaboration Management, a private consultancy specializing in helping businesses implement collaboration; and Industrial Partner at Ripplewood Holdings, LLC, a NY-based private equity firm.
Formerly CEO/Chairman of MSX International, he is best known as former Vice Chairman of DaimlerChrysler. During almost 20 years at Chrysler Corporation, Stallkamp helped lead the company to new stability and growth in the uncommonly competitive automotive industry. As President there, his supplier partnership strategies drove major improvements in both quality and cost, helping make Chrysler the world's most-profitable automaker.
Stallkamp serves on several corporate boards and on the advisory board of Georgetown University's McDonough School of Business, and on the faculty at Babson College's Graduate Entrepreneurship Center.
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BREAKING THE MOLD – A Way to End Adversarial Commerce
The first three years into the twenty-first century have not been a high-water mark for American business management. Both businessmen and the general public have suffered through accounting scandals, management malfeasance, and blatant greed that make the actions of the old robber barons look tame. Governmental legislation and regulation have been enacted to restore the public confidence in business managers and to protect private investors. This turmoil and the resultant backlash of reform can be viewed as a cycle that will correct itself and permit business to resume as normal. But what if it doesn't?
In the summer of 2001, I gave a speech to a gathering of automotive executives, entitled "Fixing a Broken Economic Model—A Case for Supplier Alliances." In it, I suggested that the way the automotive industry dealt with it suppliers, dealers, and employees at that time had become too adversarial and that changes should be adopted before we ran out of time to react. The reaction was predictable: lots of agreement from the supply base and rejection from the automakers. I even got called into one of them and asked to explain why I was fermenting such heresy. That told me I had struck a nerve.
This book contends that the basic business model that has developed over the last century might be broken and that, instead of reverting to "normal" practices and methods, we should consider a new model. The present model is based on the strong independence and separation of firms from other companies, which makes collaboration or alliances hard to propose and even harder to implement. This model forces companies to take adversarial positions when dealing with other firms and drives the merger activity that is prevalent even in today's economy.
This book is built on the premise that companies—and, more important, their managers—can adopt more collaborative and strategic partnerships with related firms, to help the economy maximize its growth into the future. Situations have changed in the last few years beyond the accounting and management scandals, requiring modern managers to adopt a new model based on relationships, measurement of goals, and common strategies. Capital continues to be limited even in periods of low interest rates, as banking institutions try to limit their exposure to risky industries. Global competition threatens our existing American business model by opening our own markets to new, more entrepreneurial firms from cultures that operate much differently than ours. As these firms enter our own market and establish a new presence, we cannot be sure that they will operate completely under the American form that has been so strong in the last century.
Although people have been talking and preaching about ways to increase collaborations for years, only a few successful examples have arisen. During my 20 years at the Chrysler Corporation, and through the merger of DaimlerChrysler, we developed a different management approach to dealing with our external suppliers and our own employees. Using the principles under Chrysler's Extended Enterprise concept, we were able to put collaboration into practice in the 1990s and prove that it could be more than a soft philosophical idea. During that period, we proved that closer and more strategic approaches to suppliers, employees, and other constituents could raise the level of corporate performance and financial results. Many other advanced companies, including Dell Computer and Intel, are now using the principles that we helped create. Even such old-line managements as the US Air Force are exploring them. These principles are more difficult to use than the old-line command and control approach that is still the prevalent style, but strategic and planned collaboration is spreading rapidly.
If American business is to continue to thrive in the twenty-first century, as it did in the twentieth, we must make radical changes in how we run and manage our institutions. The current approach forces a separation of companies and legally insists on dealing at arm's length. This might be good for ensuring competition, but with its negative slant against close cooperation, it could be the reason we have seen some of the bizarre and massive moves to acquire or merge with other firms for growth. The well-intentioned changes that Congress and regulators are forcing onto business and management might be only Band-Aids that mask deeper issues. As we all try to rebuild confidence in American business, we should try to move forward instead of just patching up our wounds and regrouping to fight the same old fight.
I started this work to describe how companies can improve their financial performance by changing the way they approach their supply chain. But after more than 30 years in management positions at extremely large corporations, I now realize that we have to change our whole approach to management, with both our employees and our suppliers. That change must start at the very top of the organization and be thought through in detail to see how it impacts the existing corporate culture. Many of the examples and stories used in this book come from manufacturing or industrial settings, but the problems that adversarial management practices create impact all businesses, including those in the service and financial sectors. Little is unique across our management practices in America, and the idea of forming closer alliances affects any firm.
A word of caution is required to those of us who graduated with traditional MBA degrees: Our training and the way we have been practicing business over the years has instilled in us a great deal of cynicism and doubt toward any change in the way we practice management. The following chapters outline what is wrong with the current system that has served so well in the past, and present a new approach that, on the surface, violates some of the principles under which we now operate. Reflecting on the way it works now, on the difficulty communicating across people and firms, and on the long-standing after-effects of adversarial management will help you understand that the changes being recommended are possible, practical, and necessary. The chapters include ways to monitor, measure, and track how the new system is working, to hold bean counters and financial analysts at bay. When the macro results come in, the whole organization will become believers and realize that change is necessary.
I believe that, with its vastly increased global competition and the baggage of historical organizational thinking, the next few decades of the twenty-first century will be a laboratory for change that we must explore. The old ways of the past that centered on a command and control style of management are about to be blown away by a younger, more international, less loyal, and less tolerant workforce. This book is about finding a way to end the current adversarial tone of management. I hope that it can create change, not just discussion. Reactions to speeches that I have given to major industry audiences on this subject have encouraged me to go beyond the obvious scope of supply chain management and offer up a wholesale change in general management. Applied correctly, with significant planning, it can improve the culture of a firm and stimulate growth so that the next generation thinks it is rewarding to go into a business career.
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