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What is STRATEGIC MANAGEMENT? What does STRATEGIC MANAGEMENT mean?

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Our findings derive from our combined research and consulting experience with more than 20 large multinational corporations and with some 70 organizations within General Electric. Our focus is on internally developed technologies; but as vendors of advanced manufacturing equipment have found in their efforts to help implement the systems they market, new technologies, no matter what their origin, confront managers with a distinctive set of challenges. Those who manage technological change must often serve as both technical developers and implementers. As a rule, one organization develops the technology and then hands it off to users, who are less technically skilled but quite knowledgeable about their own areas of application.

In practice, however, the user organization is often not willing—or able—to take on responsibility for the technology at the point in its evolution at which the development group wants to hand it over. The person responsible for implementation—whether located in the developing organization, the user organization, or in some intermediary position—has to design the hand-off so that it is almost invisible. That is, before the baton changes hands, the runners should have been running in parallel for a long time.

The implementation manager has to integrate the perspectives and the needs of both developers and users. Perhaps the easiest way to accomplish this task is to think of implementation as an internal marketing, not selling, job. This distinction is important because selling starts with a finished product; marketing, with research on user needs and preferences. Marketing executives worry about how to position their product in relation to all competitive products and are concerned with distribution channels and the infrastructure needed to support product use.

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We discuss the first two of these issues in this section of the article; the third we cover later. For example, software developers in an electronic office equipment company established a user design group to work with developers on a strategically important piece of applications software when the program was still in the prototype stage.

The extremely tight communication loop that resulted allowed daily feedback from users to designers on their preferences and problems.

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This degree of immediacy may be unusual, but managers can almost always get some information from potential users that will improve product design. A marketing perspective also helps prepare an organization to receive new technology. Many implementation efforts fail because someone underestimated the scope or importance of such preparation. Therefore, they pour abundant resources into the purchase or development of the technology but very little into its implementation.

Experience suggests, however, that successful implementation requires not only heavy investment by developers early in the project but also a sustained level of investment in the resources of user organizations. A very promising implementation effort in a large communications and computer company went off the rails for many months because of inadequate infrastructure in the user organization.

New computerized processing control equipment was ready for shipment to prospective users enthusiastically awaiting its arrival, but a piece of linking software was not in place.


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Arguments erupted over who should pay for this small but critical piece of the system. Equally troubling, there were no resources for training because the developers did not see providing these resources as part of their normal responsibilities. No one in the user organization had prepared the way for the innovation, so there was no one to whom developers could hand it off. Just as marketing managers carefully plan the research through which they will gather critical product information, so implementation managers must develop an iterative, almost accordion-like framework to guide decisions about when and how to collect needed information from all groups affected by an innovation.

What information is important—and who has it—may vary at different stages of the implementation process, but someone must coordinate the iterative work of gathering it—and that someone is the implementation manager. When, for example, a turbine manufacturer designed a CNC system for shop-floor control in one of its small parts operations, project managers were careful to:. From their discussions with operators, the system designers could understand the important variables as the operators saw them and, therefore, could design a system that solved problems the operators really faced without creating new ones.

These discussions also facilitated a transmission of information back to the users through education and hands-on practice sessions with the users and their supervisors. The higher the organizational level at which managers define a problem or a need, the greater the probability of successful implementation.

At the same time, however, the closer the definition and solution of problems or needs are to end-users, the greater the probability of success.


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Implementation managers must draw up their internal marketing plans in light of this apparent paradox. Top management and ultimate users have to buy into the innovation to make it succeed, but marketing an idea to these two groups requires very different approaches. How, then, can an implementation manager foster general acceptance of an innovation from such a range of constituencies?

We believe this executive must view the new technology from the perspective of each group and plan an approach to each accordingly. Amid growing calls for the accounting profession to provide better means to assess the value of robots, CAD, and computer-integrated manufacturing, some companies are beginning to realize the limitations of traditional capital budgeting models.

When GE set up its state-of-the-art automated dishwasher plant, it originally justified the costs on the basis of savings over time, but the plant has experienced payoffs from the investment in unanticipated ways. The quality of the product improved, lower manufacturing costs led to an expansion of market share, and the plant proved able to serve as a manufacturing site for other products. Each time managers document such nontraditional benefits, they make it easier to justify similar investments later.

Top executives may also be swayed by strategic considerations. The new systems also helped drive the continual quality improvements needed to keep operations competitive when the currently sluggish market revived. Selling top management on the case for new technology—without simultaneous involvement of user organizations in the decision-making process—is not enough.

The meaning of this term depends largely on the scope of the project. Perhaps even more important is to plan for the transfer of knowledge from the old operation, in which people knew the materials and the product very well, to the new process, which outsiders may initially design and run.

The developers of the new process especially when it is computer software often know their tools very well, but rarely do they understand the materials and processes to which their software is applied as well as the people on the plant floor who have been working with both for years.

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At the very least, managers should provide some mechanism and time for such knowledge to flow from experienced worker to developer. An example of well-developed ownership is the case of a marketing organization about to switch from manual files to an electronic filing, messaging, and data retrieval system used by both account officers and secretaries. Managers decided to take the time to do it right the first time instead of doing it over. The project manager set up a committee of elected representatives from all groups affected.

This committee met regularly, first to select the right software package and then, when it became apparent that they would have to build their own system to get all the features they wanted, to give advice on its structure and content. The result was an inventive, well-accepted, and widely used system. Moreover, users regarded the minor problems that did arise as bugs to be worked out of our system. Critical to the success of this project was the choice of opinion leaders among users for involvement.

The basis for leadership differs from organization to organization, but these leaders are not usually hard to identify. Frequently, they occupy their place of influence as a result of technical proficiency, not formal position. Opinion leaders, however, are not necessarily the most skilled operators. Someone whose technical skills are so superior that followers can have no hope of emulation may fall too far outside the norms of a group to be a real opinion leader.

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In the marketing organization just described, one senior account manager refused to use the new electronic system. The system implementers were at first alarmed but then realized that this individual was not an opinion leader. Their efforts flowed around him, unimpeded by his opposition. Six months after everyone else went on the system, he capitulated, convinced at last of its utility. Many a technology developer will confess bewilderment that innovations do not win automatic acceptance. It may be overly optimistic to believe that an innovation will sell itself, but it is equally dangerous to oversell the new system.

Novel and exotic technologies are especially vulnerable to hype. Articles in the media about robots and artificial intelligence, for example, have raised expectations far higher than the actual performance of current technologies warrants. Potential users quickly grow disillusioned when much touted innovations perform below expectations. Months before they had their hands on the software, intended users faced questions from their customers about how they liked it.

The gap between perception and reality was traceable to the energetic efforts of one project manager early on. Knowing the importance of selling the concept to management, this enthusiast had extended his campaign to virtually anyone who would listen. Since it was a sexy topic, the new artificial intelligence system received wide attention in the media as well as in organizational newsletters. This oversell presented a problem to implementation managers, who had to fight the perception that their project was way behind schedule and that their product delivered less than promised.

There are two reasons for conducting a pilot operation before introducing an innovation across the board in a large organization: first, to serve as an experiment and prove technical feasibility to top management and, second, to serve as a credible demonstration model for other units in the organization. These two purposes are not always compatible.