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Tuesday, May 11, 2004

Plan Schman
From a Stephan Haeckel interview on adaptive enterprises, sense and respond, etc. (as usual, I'm identifying the trendy thing several years after the fact):

A good example of the difference between a "sense-and-respond" organization and what most of us are used to is the difference between the way a bus company is organized and managed and the way a taxi company is organized and managed....

There was a story in The London Times two or three years ago about a productivity imperative and initiative of The London Bus Authority. They set the bar so high that only one bus driver was able to meet all of the parameters set forth in this new process. He got the bus out of the barn on time. He stopped every place he was supposed to stop at the time he was supposed to stop there. He got back to the barn on time. He ran over no more pedestrians than the plan called for and used no more fuel than the plan called for. The only thing he did not have time to do was open the doors of the bus to let passengers on and off.

The moral of this story is that you can be an "A" performer in what we call a make-and-sell organization without a customer. As a matter of fact, customers can become absolutely a nuisance. People get sick in the middle of a bus ride and therefore you have to stop the bus and let them off. And that screws up all of the measurements.

The idea of being a "plan your work, work your plan" organization is the idea behind what we call a make-and-sell organization. It requires that you predict ahead of time what your customers are going to want - forecast. The opposite side is a firm like a taxi company where a taxi driver cannot begin work without a customer. A bus driver can begin. All they need is a schedule. That is the plan. A taxi driver cannot begin without a customer. Why? Because the customer is the only one who knows where we are going.

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