Fall 1997, Vol. 39, No. 1

 

Warning. Change coming soon to this space. In a series of focus groups and readers' evenings with subscribers, we've been hearing that SMR could do with a new look. "We're glad it looks authoritative," they've said, "and dignified and all that -- but could you make it a little more accessible? Easier to read, even?" Fair enough, we thought. We undertook an exhaustive search for the right design firm last spring and have worked hard all summer on the redesign. You'll see the results in the winter issue. It's not a radical change: we've added a second color, spiffed up the tables and figures, added some graphical elements, and generally updated the look. It's still very much a journal. We will look forward to hearing your opinion. (One designer told us that, until recently, when editors undertook a redesign, they could expect howls of outrage from their readers. "Nowadays people are so used to change, they barely notice," he said. He sounded wistful. We hope you'll notice, even if it means we have to listen to the occasional outraged howl.) We hope to introduce other, more content-oriented changes in the coming months as well, so stay tuned.

Michael Cusumano and Richard Selby's 1995 book Microsoft Secrets remains one of the richest studies of a single company ever done (and what a company it is). In this issue's lead article, Cusumano extends that study. He examines the structural elements Microsoft uses to ensure that large product-development teams function with the best qualities of small teams. A key element is to combine continuous synchronizations with periodic pauses used to stabilize a project.

Vikas Kapoor and Arnab Gupta challenge the notion — made popular during our national infatuation with Japanese management methods — that the ideal purchasing relationship is a "partnership." Their provocative article suggests that most firms should use a free-market approach instead. They also note that indirect purchases (of, say, consulting services as opposed to manufacturing materials) are scandalously underexamined by senior management.

In a stylistic and substantive contrast, Toshihiro Nishiguchi and Jonathan Brookfield contribute a careful study of how Japanese subcontracting really does work; I was especially interested in the historical background the authors provided. Readers must decide which elements of the Japanese system can cross national boundaries and which cannot.

George Oldfield and Anthony Santomero tackle risk management in financial services. They propose three strategies for mitigating risk: Avoid it by eliminating inessential risks; transfer risks to other institutions; and aggressively manage unavoidable, untransferable risks. They discuss which types of risk can be avoided or transferred, and devote the rest of their paper to describing a systematic approach to the inherent, and thus most difficult, risks.

First-rate professional service firms link knowledge and relationships masterfully — because, at the end of the day, that's all they have. Jeanne Liedtka, Mark Haskins, John Rosenblum, and Jack Weber studied how three leading PSFs create a generative cycle that looks something like this: select best-of-class employees; develop broad individual competencies; leverage individual expertise to solve complex problems; provide superior value to clients; attract and retain the best clients.

Savvy environmentalists know that a knee-jerk antibusiness stance isn't politic, just as savvy business people know that blatant destruction of natural resources will have to be paid for, often sooner rather than later. Constructing individual win/win scenarios isn't easy, though. Andrew Hoffman, Max Bazerman, and Steven Yaffee describe the complexities of one such construction in their study of the Endangered Species Act.

Nancy Drozdow and Vincent Carroll quickly establish the particular difficulties family-owned businesses face (to wit: strategic events and family life cycles are usually out of synch; ties to the founder can hinder change; trust and leadership often erode in the second generation). Then they proceed to the use of scenarios, or simulations, to help family members plan for the future. The two examples serve as small case studies; I found them both entertaining and enlightening.

— Sarah Cliffe

 

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