Industrial organizations are prone to dog-eat-dog behavior, but tactics from the "adversarial commerce" school will serve them less well in the future, according to this guide to strategy. Adversarial styles limit growth by creating bad blood and closing off avenues to mutual learning. Innovation suffers.
Stallkamp, former vice chairman and president of DaimlerChrysler, acknowledges that companies have been harping about collaboration for years. Few know how to do it, although Toyota and Nissan are stand-outs. Chrysler took a chance in the 1990s with collaboration, he writes, and the closer, more strategic relationships with suppliers, employees, and other stakeholders paid off by raising the level of corporate performance and financial results. This book describes how other companies could benefit from similar efforts.
The strategy he describes is called Score: Supplier Cost Reduction Effort. As he explains it in the context of Chrysler, "The program was based on encouraging suppliers to voluntarily submit suggestions that would reduce the cost of doing business with Chrysler. ... Chrysler did not demand that all the savings generated by supplier ideas be passed on to them. Suppliers were encouraged to keep some of the cost savings for themselves, to improve their own profit margins and to make the Chrysler business more profitable for themselves. In this way, the program became self-sustaining as word spread throughout the auto industry that Chrysler was indeed a better place to do business." Such open communication, he believes, was essential for more cooperative interactions with suppliers.
Chapters describe how to monitor, measure, and track the results of a Score system. Stallkamp takes a dim view of the management arrangement of most current finance departments, which by their nature tend to hoard information rather than share it as is necessary in the Score model. "We need to throw out the old model of protection and look for ways to collaborate and yet retain the data that is the heart and soul of a company," he writes.
Though Stallkamp relies heavily on examples from the industry he knows best, this book is recommended fodder for anyone who wants to put closer collaboration into practice.
Table of Contents:
- Breaking the mold
- Adversarial commerce and why it's wrong
- Ending adversarial commerce
- Where in the world is adversarial commerce?
- Information is power and sharing doesn't come naturally
- The collaborative approach
- The extended enterprise concept
- Collaboration doesn't mean "soft"
- Implementation steps
- The conversion experience
- Breaking the mold: moving to collaboration