Adaptive Enterprise: Creating and Leading Sense-And-Respond Organizations [Hardcover]

Stephan H. Haeckel (Author)

Book Description

Publication Date: July 1, 1999 | ISBN-10: 0875848745 | ISBN-13: 978-0875848747

Unpredictable, discontinuous change is an unavoidable consequence of doing business in the Information Age. Because this intense turbulence demands fast - even instantaneous - response, many large companies are fragmenting themselves into smaller, quick-response units. But in doing so, they relinquish important advantages of scale and scope. Is it possible to have it both ways? Can large, complex firms adapt successfully and systematically to unexpected change? Yes, says Stephan Haeckel, but only if leaders learn how to manage their organizations as adaptive systems. In "Adaptive Enterprise", Haeckel updates the concept of the corporation for the Information Age with a radical and comprehensive rethinking of organizational strategy, structure, and leadership. He outlines the new sense-and-respond business model that is helping companies systematically cope with the unexpected. Haeckel argues that when unpredictability is a given, the only strategy that makes sense is a strategy to become adaptive - to sense early and respond quickly to abrupt changes in individual customer needs. As a result, a firm's operations must be driven by current customer requests - implicit as well as articulated - rather than by plans to make and sell what customers are forecasted to want in the future. Here, for the first time, is a clear and comprehensive strategy for transforming firms into adaptive systems. "Adaptive Enterprise" is both a new way of thinking about business and a handbook for leadership of postindustrial organizations. It maps out, with examples and illustrations, a step-by-step plan that companies can use to transform themselves into a new type of organization - one in which change is not a problem to be solved, but rather an indispensable source of energy, growth, and value.

Editorial Reviews

Amazon.com Review

In today's fast-changing marketplace, a business can't expect to thrive by just making products and selling them, argues Stephan H. Haeckel in Adaptive Enterprise. "It does not matter how good you are at making widgets if the market for widgets disappears or if your competitors offer dramatically new and improved widgets faster than you can," writes Haeckel, director of strategic studies at IBM's Advanced Business Institute. Instead, for a company to succeed nowadays, says Haeckel, it needs to know how to adapt to customers--even before they themselves know what they want. Haeckel lays out a strategy to create such a "sense-and-respond" approach that will allow companies to move quickly amid change. Among the key steps: companies must use innovative ways to gather information about customer needs. For instance, car manufacturers used video cameras in airport parking lots to discover that people often struggle to lift heavy suitcases over the high lower edges of trunks. In mall parking areas, the cameras revealed that shoppers had nowhere to put soft drinks they just bought. Now, low trunk edges and cupholders are standard features in almost every car. Because "sense-and-respond" is a relatively new business model formulated by Haeckel, the book is heavy on theory and slim on concrete examples. Nevertheless, Adaptive Enterprise has some good ideas for business leaders looking for an edge in a world where rapid change is the norm. --Dan Ring

From the Back Cover

"Adaptive Enterprise provides the clearest and simplest set of tools necessary for a long company life." -Peter Schwartz, Chairman, Global Business Network "Drawing equally on adaptive systems theory and his own corporate experience, Haeckel has created the first practical road map to guide us toward the adaptive enterprise. He has gone beyond the mantra of 'embracing change' to describe the operational and organizational processes needed to create and lead an adaptive business." --Christopher Meyer, Director, Center for Business Innovation, Ernst & Young LLP "The future belongs to firms that can have a rich dialogue with customers and provide personalized responses to their unpredictable requirements. Stephan Haeckel has written the definitive guidebook on how to design and guide organizations toward this goal." -George S. Day, Professor, The Wharton School, University of Pennsylvania "Stephan Haeckel's sense-and-respond business model for the information age is revolutionary. Adaptive Enterprise presents an utterly persuasive case for doing business in new ways." -Ann M. Drake, Chief Executive Officer, DSC Logistics "Many books on how to cope with information-age discontinuity read like they are written for entrepreneurs and small businesses-they offer great prescriptions and say 'just do it.' Stephan Haeckel has written a provocative handbook that recognizes the enormity of the challenge faced by large, complex organizations whose leaders, no matter how progressive their thinking, need more help making the sense-and-respond idea work for them." -Thomas M. Hout, Senior Advisor, The Boston Consulting Group

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Product Details

• Hardcover: 295 pages
• Publisher: Harvard Business Review Press (July 1, 1999)
• Language: English
• ISBN-10: 0875848745
• ISBN-13: 978-0875848747
• Product Dimensions: 9.5 x 6.4 x 1.2 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (13 customer reviews)
• Amazon Best Sellers Rank: #745,082 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

31 of 32 people found the following review helpful:

3.0 out of 5 stars Command and control in complex adaptive systems, December 6, 1999

By 

Bill Godfrey (Mt Stuart, TAS Australia) - See all my reviews
(REAL NAME)   

This review is from: Adaptive Enterprise: Creating and Leading Sense-And-Respond Organizations (Hardcover)

If you are ready to accept the notion that complexity governs your external markets, but are not yet ready to accept that the same rules may apply inside your organisation, you may find comfort in this prescription. It purports to be about the distinction between a 'make-and-sell' organisation and a 'sense-and-respond' organisation. The first is production efficiency focused and second is focused on customer satisfaction. (What the author calls 'sense-and-respond' is in fact an unacknowledged version of the Kolb cycle or cycle of organisational learning cycle, so well examined by Nancy Dixon. It is essential to all forms of learning, whether that is applied to providing customer satisfaction or to playing a musical instrument)

Overtly he argues that the shift from a make-and-sell orientation to a sense-and-respond orientation is a major piece of unfinished business for organisations. The reason that he can argue this is that he 'bundles' the issue of customer responsiveness with the much wider issue of complexity and unpredictability in the environment - in other words, he argues that it is not possible to be truly customer responsive if you do not also recognise complexity in markets.

Beneath this surface argument that the new complexity requires new approaches and its characterisation as a move to 'sense-and-respond', lies the real issue, which is the defence of command-and-control from devolution of control, which the author characterises dismissively as 'communicate-and-hope'. The author develops a framework which is designed to retain the essential features of command-and -control, while building flexibility and responsiveness. He argues that forms of governance that challenge command-and-control have only been effective in smaller and simpler organisations than the giants with which he is primarily concerned. By extension, he argues that they can not work in such organisations.

The core of his prescription is the ability of central management to provide central direction to the organisation by the use of an analogy to 'fly by wire' technology. In other words, he advocates the use of modern technology to keep central management informed of unpredictable change so fast that they can respond appropriately within tight time deadlines. When a 'modular' approach to structuring organisations is added, he argues that they can respond effectively not only to the generality of customers but to particular customers. However, the question of relationships with internal stakeholders - employees - does not figure in his schematic, nor does the issue of external alliances and partnerships. Both (separately and together) challenge the capacity of command and control: it is not just customers and markets.

12 of 12 people found the following review helpful:

5.0 out of 5 stars A practical methodology based on three key ingredients, July 23, 1999

By 

Alan N Hohne ([e-mail]) (Sydney, Australia) - See all my reviews

This review is from: Adaptive Enterprise: Creating and Leading Sense-And-Respond Organizations (Hardcover)

How different it is to be a reader in 1999 of Sense and Respond by Stephan Haeckel compared to what it was as one of the subjects in the eighties of which he writes. Then, no formal Sense and Respond model. Just "make-it-up-as-you-go" - euphemastically called "being flexible".

Now at last, something more than rhetoric to rely on. For over two decades we have been promised competitive edge through technology investment, magic formulae for change management, super profits through continuous process improvement, market dominance through customer focus and a whole lot of other so-called "silver bullets". A whole generation of management by best-seller has meant that the more things change the more they stay the same. And why? Because they have all missed the truly unique elements of Steve Haeckel's formula.

Governance principles and reasons for being have been around for generations. Leaders who do more than communicate and hope are well written-up. Organisation theory based on a systems approach is not new and modular organisation structures are not original. Neither is mass-customisation or the steering of a business based on manipulation of data managed as a corporate resource so that business transactions are reflected in decision support systems. Learning organisations based on adaptive loops are common, customer-driven process re-engineering case studies abound and project managers don't survive if they don't keep track of who-owes-what-to-whom.

So what is unique about Steve Haeckel's brew?

First, like Harold Geneen and his "grandma's soup" of the seventies, he's cooked slowly, tasted often and stirred in small amounts of lots of ingredients when the taste was not yet right. But most importantly he has based his brew on good stock. From the start he realised that you can't revive corpses. He has admitted that corporate transformation (the process that changes a caterpillar into a butterfly) and not reformation (work with what you've got) is what's needed to deal with the real world of change (continuous discontinuity).

Second, he's produced a uniquely implementable version of an extraordinarily elegant commitment management protocol. He has thereby shown how to co-ordinate systematically the dynamics of 'who owes what to whom' in a way that enforces consistency with the governance principles and other policies of an enterprise. More importantly, he has demonstrated that the key to transforming a traditional business, so that it can thrive in an environment of continuous discontinuity, lies in equipping leaders to track the interactions of negotiated commitments to produce outcomes within the boundaries of the strategic intent of an enterprise. Not only has he dealt with the human factors of this critical equation, he has translated the sophisticated theory of commitment management protocols into robust practice and exploited hitherto ignored technology. The result is an order of magnitude more powerful than the business process re-engineering with which it is all to easily confused.

Thirdly, he has successfully integrated a carefully selected inventory of proven components to produce a result in which the whole is considerably greater than the sum of the parts. The finished work displays a lustre that only comes from extensive rubbing against the real world. Key to this outcome has been Steve's understanding of the organic nature of the system that is an adaptive enterprise. For him, the system that deals with the problem of responding to the unpredictable is more than a mere academic abstraction. Each ingredient he has introduced has had to stand up before hundreds of discerning critics - his own customers to whom he has been accountable for an 'outcome'. Steve has understood that an adaptive enterprise is a dynamic interaction between real people, innovative technology, sophisticated intellectual concepts, practical leadership skills and sound information management methodologies.

Neither one or all three of these unique elements of the Haeckel formula can magically make any old 'bus driver' a brilliant 'cabbie'. Nor, should they. This is not a book for the addicts of management by best seller. But any leader of a traditional corporation who can't 'sense' that Steve has got the problem right, who can't 'interpret' commitment management as a survival issue and who doesn't 'decide' to embark on an integrated journey of corporate transformation ought to 'act' in the interests of shareholders and make way for the present. The future is here and the early adopters of the Haeckel method of transformation will make change their ally and the unexpected their active business partner.

As a former CIO of Westpac Banking Corporation and after 25 years in electronic banking I offer a word of advice. If you operate a traditional business in today's market place you will ignore this book at your peril.

16 of 18 people found the following review helpful:

5.0 out of 5 stars The Future of Service Industries, December 22, 1999

By 

Paul T. Kidd ([e-mail]) (Macclesfield, UK) - See all my reviews

This review is from: Adaptive Enterprise: Creating and Leading Sense-And-Respond Organizations (Hardcover)

Adaptive Enterprise covers two separate but related topics - mass customisation (customisation at mass production costs) and agility (capability to deal with changes in the business environment and the associated high levels of uncertainty). The book is primarily focused on service industries, where services can often be customised through organisational (re)configuration (hence the agility dimension). Most importantly, the book covers the difficulties of moving from make and sell to sense and respond - difficulties often ignored in cookbook style business books. The book also addresses application of systems thinking to enterprise design - an important topic that is not covered enough in business books. Those interested in agility will also find Appendix B useful. Here one finds a decision process to use when one is faced with significant uncertainty. Overall the book is refreshing in its honesty. After reading this book you might also want to read some follow-ups: Mass Customisation (Joseph Pine); Agile Virtual Enterprise (Ted Goranson) and Agile Manufacturing (Paul T. Kidd).

Paul T. Kidd