Tribal Knowledge Paradigm: Background

This is the first part of the first chapter of our next book, “The Tribal Knowledge Paradigm.”  We aren’t going to put the whole book here, just enough.

We believe that the ever-increasing speed of change and complexity are driving beyond effective limits of current corporate infrastructure and management methods.  As Bill Gates put it, “business is performing at the speed of light.”

Is this sufficient reason to change?  This may not be the root cause or it may not be the final straw, but it is an indicator that today’s markets require a different look at what a successful management paradigm might be.  How do you manage in such conditions?  How do you get the bang for the buck that investors are demanding?  And how do you do so with minimal disruption of your organization?

Are we crazy to even ask such a question?  Perhaps, but we think that there is a very subtle but powerful way to accomplish this goal with a minor change in how we manage companies.  And it is not based upon a feeling or a gut-check but hard evidence from over 150 engagements where all of these suggestions were tested.

And further, when we look at the success of energy infusion programs at GE and Southwest Airlines, we are able to ask ourselves how do our experiences relate with the initiatives of Jack Welch and Herb Kelleher.  Although our pragmatic learnings had their beginnings in business  operations turnaround [1],  we came to understand the value of company wide action with a sense of focused urgency.

The paradigm evolved into a hybrid of the Work Out Program of Jack Welch and the Wing Ding of Herb Kelleher.  We engage “Corporate Know How” by having employees identify and solve problems in a process and a structure that incubate innovation and best business practice, while creating great employee morale.

This initial phase, the War on Waste, worked like this.  In a six week program, employees were asked to find $100,000 of Waste as measured by its effect on the company’s productivity (efficiency) or sales.  It either affected top line revenues or costs.  And we made it challenging in that they couldn’t spend more than $2,000 to fix the problem.  As a business goal, a 50 to 1 return is a pretty good deal.  In fact, in an audit of our program, the actual results of 23 small businesses that participated, we were able to document a 38 to 1 return or 3800% ROI for these projects.  That isn’t the targeted 50 to 1 ratio of $100,000 of waste to its solution of $2,000 but it works for most investors.

The by-products of this phase, after high ROI, are a better understanding and an amplification of the tangible asset, “Know How” as well as ferreting out roadblocks and bottlenecks to internal growth.

Those results were both typical and spectacular.  We were able to see these types of results in all of our projects across a spectrum of businesses:  machine shops, hospitals, doctor’s offices, distribution businesses, continuous flow manufacturers, discrete manufacturers and service businesses, it didn’t make a difference what kind of business that we worked.  The results were always the same: Spectacular.

But then you have to ask, why?  Why did we get these results?  Why did Jack Welch or Herb Kelleher get their results?  We have struggled with this question for over 25 years.  And then it hit us.  (We’ll tell you more about the Tribal Knowledge Paradigm tomorrow on this blog.)