Ohmae's Key Success Factors LO11793

Fri, 10 Jan 1997 11:29:37 -0500 (EST)

Replying to LO11682 --

Kent Meyers made a good point in LO11682 about the concept of critical
success factors being in some ways the opposite of systems thinking, but
I'm not sure we should give up on trying to communicate with people who
work from this paradigm.

This discussion started through a question about Kenichi Ohmae's work. He
was a long time McKinsey consultant, and the McKinsey consulting firm, for
better or worse, gets much of the credit for spreading the use of the
critical success factor framework throughout global businesses in the
1970s and 80s.

As a consultant I work with a number of McKinsey clients. I've found it
more useful to try to expand how they use the idea of critical success
factors, rather than expect them to write off all they've invested in this

For example, Southwest Airlines, as Kent Meyers suggested, is a great
example of how the whole system of factors that make up Southwest's
organization work together to produce a result. A competitor could be
very misled by assuming Southwest's success was primarily a result of a
few free-standing critical factors, such as fast aircraft turnaround time,
careful employee selection, or the brand of whiskey its CEO favors.

But this is the kind of analysis that frequently appears in consultant's
benchmarking studies and Fortune Magazine articles.

When I inquired of clients, and business journalists, why they made use of
such non-systematic interpretations, the most common answer that came back
was that frameworks such as lists of success factors have a great
communications value. They are easy to understand and spread around.

Eventually the names of systems archetypes (Limits to Growth, Tragedy of
the Commons, etc) may become sufficiently well known, and they'll be used
in place of the kind of reductionist thinking that characterizes critical
success factors.

In the meantime I've had some luck using other generic labels, or
archtypes, to characterize the different types of fit that must occur
between people, organization structure and systems to identify a certain
strategic path.

For example, Southwest Airlines in this framework is organized along the
lines of what I call a Rule Breaker. It thrives by destabalizing
established ways to compete. The fit among the elements of its people,
organization and strategy has a lot in common with other Rule Breakers,
Car Max, amazon.com, Apple Computer in the early-1980s, Federal Express in
the 70s.

Companies like Microsoft, Intel, McKinsey and McDonalds face a different
strategic challenge. They have very strong positions in the markets they
serve. They want to stay that way. I call them Rule Makers because they
typically do this through external strategies and internal practices that
control the behaviors of those who work for and buy from them, a very
different pattern of fit than is common among Rule Breakers.

I've used names such as Game Players, Specialists and Improvisers for
other such archtypes. Each describes a particular bundle of interrelated,
reinforcing characteristics. The trick is to keep the characteristics
internally consistent, and in sync with the dynamics of the market. As
the outside environment changes, the internal must also, but in a way that
recognizes the systematic nature of an organization - you can never change
just one thing.

Bob Tomasko



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