Customer Reviews

SCORE!: A Better Way to Do Busine$$: Moving from Conflict to Collaboration

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It makes sense to approach business relationships as a partnership to make sure that both sides come away from the experience in a positive light, but how many times have you been involved in something the gets competitive and turns into a game of who can get the most out of the other guy. That is what this book is about. The authors premises is that in today's competitive and global environment with all the price pressures that there are, it is going to be relationships that are more important then squeezing that last 1 % out of your vendors.

Sure this sounds like some sort of play nice book written by a non business professional that really does not know what it is like. That perception is incorrect. The author was the Vice Chairman of the Chrysler Corporation and practiced what he is laying out in the book. Overall he gives any number of examples of how win - win relationships help you out in the long run. He is a very persuasive author and his premises is helped out by the fact that deep down most if us know that he is correct. We all like working with people that make things easy and are treating us fairly and we all dislike the pain associated with dealing with a firm that you know will stick it to you unless you are on top of them.

Overall I enjoyed the book. The author writes in a very easy to read and positive manner. The book reads at a fast pace and is full of insightful points. It is the kind of book that you wish all business professionals could read and put in practice. Not only does the book spell out a better way to do business, but it is the way to stay in business.

SCORE is an acronym for Supplier COst Reduction Effort and is used to describe the policy of cooperating with suppliers, labor unions and other associated companies rather than being confrontational. Stallkamp is the former vice chairman of DaimlerChrysler and the former president of Chrysler Corporation. Therefore, his experience is in the auto industry, where the amounts are enormous and relationships can be complicated.
His arguments, and they are persuasive, are that companies should establish partnerships with their suppliers and strong-arm tactics are self-destructive. He describes cases where executives of auto companies made threats to suppliers and dealers in an attempt to cut the costs to the Auto Company. This was predicated on the misguided belief that since the Auto Company had the financial clout, the other entities would be forced to acquiesce. While it worked for a short time, those being bullied were resistant and eventually the policy had to be rescinded. There was a complete loss of trust between the companies and it took some time before there was a restoration of the good faith needed to conduct business.
I very much enjoyed this book, it is truly an example of how cooperation, even with rivals, can lead to improved conditions for all. Many of the points made in this book reminded me of the book, "The Evolution of Cooperation" by Robert Axelrod. Axelrod cites many examples in human history where cooperation between rival groups spontaneously arose, to the benefit of all.

The car is the second most valuable investment next only to a house for most consumers during their life time. The global automobile industry rolls out 40 million vehicles every year. Of these 15 million are from USA where at about 20000 dollars a piece, this is a $ 300 billion industry. The industry is dominated by a few players who have consolidated over the years. This structure and size gives them enormous power and leverage in dealing with their suppliers. Traditionally the big three companies have followed strong command and control structure in dealing with their suppliers, employees and dealers. It is not uncommon to see unilateral cost reduction mandates, threat of switching over to new suppliers or similar tough measures to reduce the per unit price of the components they procure. The automobile supply chain is highly complex involving thousands of suppliers in different tiers. Under the current system each layer is isolated from the next. This traditional way of doing business or "adversarial commerce" is harmful to all stakeholders according to the author. The book is about a closer examination of the malady and to recommend a new way of doing business that is beneficial in the long run for entire value chain, right from the producer of raw materials to the end consumer.

The Japanese manufactures on the other hand practice a different approach defined as collaborative commerce. Here the OEMs involve the suppliers in all stages manufacturing including joint goal setting, treating them as partners and an extension of their organization. This is a model that operates in an atmosphere of trust and cooperation and the suppliers are deeply involved in and share the costs and profits of a win-win approach. Several advantages including supplier investments in development costs leading to superior products with shorter time to market is a key factor for the global success of these firms. Chrysler's success in implementing this approach under the banner "SCORE" is the main theme of the book.

The book is based on the author's rich experience in the automobile industry. It also contains recommendations for implementation and the challenges to overcome in companies not used to collaborative practices. Written in first person narrative style, it is worth reading once. However, sharp criticism of some executives could have better been avoided.

The title is an acronym which refers to a proprietary goal and measurement system: Supplier Cost Reduction Effort. Stallkamp asserts (and I wholeheartedly agree) that "adversarial commerce" eventually creates a lose-lose situation. As he explains, "The behaviors Ford and General Motors exhibited...are examples of adversarial commerce. This term describes the negative and domineering manner many companies use to control their relationships in normal business dealings. Adversarial commerce is becoming increasingly common in the business world because it is based on using short-term leverage [e.g. cost slashing at the expense of suppliers] from the value of the business to produce equally quick results."

In this context, I am reminded of an article written for The Wall Street Journal (October 21, 1993) in which Peter Drucker identifies and then discusses what he characterizes as "Five Deadly Sins":

1. "Worship of high profit margins and premium pricing"

2. "Mispricing a new product by charging what the market will bear"

3. "Cost-driven pricing"

4. "Slaughtering tomorrow's opportunity on the alter of yesterday"

5. "feeding problems and starving opportunities"

Presumably Stallkamp is familiar with that article and agrees with Drucker that too many companies are committed to "adversarial commerce" to achieve short-term financial objectives at the substantial cost of their and their suppliers' long-term best interests.

Hence the importance of SCORE. In 1990, Stallkamp was responsible for Chrysler's procurement and supply activities. "Although it took some time to get started, by 1992, the SCORE approach had been incorporated into a supply-management philosophy called the Extended Enterprise of the firm. Because their destiny and fortunes were directly linked to Chrysler's,, the idea was to build a virtual team atmosphere in which all parties focused on reducing the cost of developing and producing vehicles. The construction supply-side suggestions worked to reduce both the supplier's costs and those of Chrysler." In this book, Stallkamp traces with meticulous the process by which SCORE was formulated and then implemented as a proprietary goal and measurement system.

He presents his material within 11 chapters, followed by an Appendix in which he provides supporting figures and attachments. By then, I was already convinced of the value of SCORE but this material may well be essential to those who must overcome the objectives of senior management in their respective organizations. The chapter subjects range from "Breaking the Mold" (e.g. the clash of opposite approaches discussed in Chapter 1) to "Breaking the Mold" (e.g. why managed collaboration is "the answer" discussed in Chapter 11). Obviously, as former Chrysler Corporation president and later vice chairman of DaimlerChrysler, Stallkamp speaks from his own extensive real-world experience. He has credibility when, for example, he identifies probable obstacles to "breaking the mold" and then suggests how to overcome them.

I especially appreciate the fact that Stallkamp immediately establishes and then sustains a direct and personal rapport with his reader. The tone is conversational rather than pontifical. Although he carefully identifies each What and (yes) What Not), he focuses most of his attention on explaining Why (and Wy Not) as well as on How (and How Not To). Stallkamp is a pragmatist who possesses exceptionally sharp analytical skills but also, to his credit and to his reader's benefit, he sees the entire "forest" of collaborative business alliances but also each "tree" (and "stump") within that "forest." The direct and personal rapport between Stallkamp and his reader is especially appropriate because, in both spirit and execution, it demonstrates what the nature and tone of business relationships should be when those involved are engaged in collaborative alliance.

In the Introduction, after contending that the basic business model that has developed over the last century might be broken, Stallkamp asserts a premise that companies and their managers can adopt more collaborative and strategic partnerships with related firms in order to help the economy maximize its growth in the future. When concluding his book, Stallkamp reiterates this theme when observing that collaborative management requires planning and effort "but it represents a way to capture the power of working as a true team instead of the waste involved in independent isolation of companies on different agendas." Stallkamp goes on to say, "Instead of letting nature run its course, managers who embrace collaborative management can help save their firm, their job, and, in likelihood, their economy. There seems to be some risk, but there's much more to gain if we can just break the mold of tradition that drives conformity in our world."

Although this book will be of substantial value to decision-makers in global organizations which have a supply management system which is immensely complicated, I think this book will also be of great value to those in almost any other organization which has only a few business relationships but whose success also depends on effective communication, cooperation, and most important of all, mutually beneficial collaboration.

If there is a corporation intimately familiar with the consequences of communications breakdowns, it's DaimlerChrysler, the high profile merger that rocked the automotive industry in 1998. Former vice chairman and president Thomas Stallkamp - who is given much of the credit for stabilizing the unwieldy result of the consolidated company - lucidly explains his proven collaborative management principles in a crisply written book. His timing seems especially appropriate given the encroaching dominance of China as a global economic power and the increasingly irrelevant ways in which companies traditionally manage their output and people, in particular, the manufacturing and industrial sectors.

Collaboration is the key, according to Stallkamp, and the methodology he espouses is called the Score system. Although his open-communication model is based wholly within his automotive industry experience, he is quick to point out how applicable it is to any company. His model at Chrysler was an incentive program which encouraged suppliers to submit suggestions voluntarily with the goal of realizing cost reductions in doing business with Chrysler. The author goes into how-to mode with ease in describing how to monitor, measure, and track the results of a Score system. For such an idealistically conceived structure, he lends a welcome, credible realism to his perspective by not demanding that all the savings generated by supplier ideas be passed on to the company, that some should be kept by the suppliers to retain their own profit margins.

The whole point is that both supplier and manufacturer benefits from the arrangement. Conversely, Stallkamp does not respect the management arrangement of most finance departments, which work on the principle of hoarding information, rather than sharing it. Stallkamp believes that the adversarial way of doing business prevails most in those industries like retail, the airlines and steel manufacturing, sectors that have been flailing for a while in this country because the myopic perspectives taken by the industry leaders have induced a self-cannibalization effect. With so many companies viewing their supply and demand chains exclusive of their competitors, there are opportunities to expand the category and evolve into an industry leader with Stallkamp's model. The author feels strongly that management needs to work against their tendencies to focus on demanding, information-exclusive ways of working even during crisis periods when reaching out is more important than ever, especially to customers.

Much of the long-term success of the Score model depends on word-of-mouth around a specific company being a better place to do business. Only when that level of awareness occurs does Stallkamp see such a program being self-sustaining. Applying his thinking in the real world, his old company DaimlerChrysler just announced a new management model in late January 2006 which discussed process streamlining and a greater consolidation of corporate functions. A key example cited is the concept of a "project house", where engineers from different divisions work together for the benefit of the whole company and thus reducing administrative costs and escalating benchmark levels. It appears Stallkamp's legacy is assured there.

When we see books written by top executives who have paid their dues with vast experience, we pay attention. OK, some of them are put together by ghost writers, but the message is still credible and worth listening to. Stallkamp is a former president of Chrysler Corporation and former Vice Chairman of DaimlerChrysler. It's worth paying attention to this one.

The premise presented by Stallkamp is simple: you attract more bees with honey than vinegar. It's a message we learned from our mothers as we were growing up. Now it's presented to us in a business context, with examples that bring the proverb to life. Stallkamp tells the story of how he developed a process at Chrysler that generated a strong sense of collaboration with suppliers, a partnership to continuously improve wherever possible.

While this collaborative approach sounds like a no-brainer, many companies don't operate this way. Stallkamp tells the story of his counterpart at General Motors when he was head of procurement, who applied a very strong conflict model to manage supplier relationships. The adversarial commerce model didn't work, and Stallkamp's posture in this book is that it won't work-ever.

Readers will learn about Stallkamp's model at Chrysler: SCORE. This name is an acronym for Supplier Cost and Reduction Effort. The experience demonstrated that cooperation produces substantially more long-term savings, as well as short-term gains. The collaborative relationship can be sustained; the adversarial cannot.

You'll gain helpful insights into the collaborative process, read about examples in a number of industries, and be inspired to build positive relationships in your work. The relationship message is recurrent in business today, so this book reinforces prevalent thinking in the leadership field.

Valuable read for senior leaders and company owners, as well as procurement specialists. The book includes messages that senior leaders need to convey throughout their organizations.

Thomas Stallkamp does a great job in this book of documenting the deteriorating state of manufacturing relations within the domestic American auto industry. He recounts many painful but apt anecdotes that show how General Motors, Ford, and the now German DaimlerChrysler have used unilateral pressure, patent violation, waived contractual obligations, and general hostility to alienate and destroy even longtime vendors in the pursuit of survival through lower costs.

He contrasts that with the method Chrysler used during and after their near death experience when they had to rely on their suppliers to help them survive. The author advocates a cooperative approach that depends on trust and sharing even proprietary information to develop a process of continual improvement in all areas including cost. The chart on page 12 showing the supplier trust of Toyota and how Chrysler held close to that before the German takeover and how it has dropped severely since then. Of course, DaimlerChrysler might counter with actual comparisons of underlying financial performance and say that the drop in trust, while unfortunate, had to be accepted to survive.

I have worked as an assembler in a pickup truck plant, as a supplier of computer equipment and software to the automotive companies, and as a supplier of temporary staff and technical expertise as well. My own view is that Mr. Stallkamp has a great deal of insight in the recommendations he makes. I think, in many ways, the automotives are still prisoners of their unprecedented success in the their early decades and have found the culture change required surprisingly difficult to attain. So, year after year they continue to lose market share and customer loyalty is almost gone.

However, this book merely presents the idea of treating the supply chain as an extended enterprise that uses collaboration based on trust as a way of lowering costs while also improving quality. There is no real case for implementation. Nor does it try to tackle the problem the supplier has in working in multiple extended collaborative environments with multiple OEMs and the cost and waste that supporting multiple programs would entail. I think this is because the author also has a consulting firm and this book is meant to draw people to the idea, while they have to pay to get the expertise to help in implementing the process.

There is a bit of a mislabeling on page 208. GM, Mazda, Ford, and Saturn are used twice as labels without DaimlerChrysler, Honda, Nissan, and Toyota (or whatever the other labels were supposed to be). The graph doesn't really make sense the way it is presented.

All in all, a good book with important ideas that can help improve the manufacturing environment in the United States. This isn't the only true approach and, of course, when your house is on fire it isn't good to "just do something - anything" to try to deal with it. However, the current approaches have not yet stanched the bleeding. So, this approach deserves serious discussion and consideration.

Thomas T. Stallkamp is best known as former Vice Chairman of DaimlerChrysler. He is the Founder/Principal of private consultancy Collaboration Management, Industrial Partner at private equity firm Ripplewood Holdings, and serves on several corporate boards and advisory board of Georgetown University's McDonough School of Business, and on the faculty at Babson College's Graduate Entrepreneurship Center.

This book was first published in March 2005 and consists of 11 chapters. The author explains in the Introduction that "this book is built on the premise that companies - and, more important, their managers - can adopt more collaborative and strategic partnerships with related firms, to help the economy maximize its growth into the future."

The first 5 chapters define the problems with the current, prevalent adversarial systems in our economy. The author explains that under adversarial commerce, the dominant party applies economic leverage in a dictatorial, arbitrary manner. However, "adversarial commerce forces the two parties into a defensive posture that is counterproductive to building longer-term goals." He discusses in detail the four major business attributes that drive the trend toward adversarial commerce: distrust, poor communication, limited planning, and a constant quest for complete control. So what is needed? "The answer is in expanded use of collaboration to break out of the cycle we find ourselves in presently."

The remainder of the book introduces the optimistic alternative. "The alternative approach to the adversarial tactics common in today's economy is for firms to encourage closer collaboration between them... For our purposes, collaboration is any management practice that features close and organized or managed cooperation between independent firms." The primary unique elements which feature in successful collaboration projects are discussed: sense of partnership and shared interests, shared goals and rewards, open and unfiltered lines of communication, clear definition of the roles and responsibilities, and freedom to make necessary decisions within the scope of responsibility. Stallkamp discusses his experience with Chrysler's supply base, whereby he used a detailed proprietary goal and measurement system labeled SCORE (Supplier Cost Reduction Effort) to streamline the business or eliminate redundant efforts and costs. "The [Extended Enterprise] concept was to treat suppliers and dealers as independent extensions of the firm." However, it is important to highlight that collaboration is a soft tactic or result. "It actually requires more planning, forethought, and monitoring than the adversarial system..." The author introduces 6 implementation steps, which are quite similar to those used in change management programs. The key is planning and constant monitoring.

Yes, I do like the latter part of this book. The first 5 chapters form a very long introduction to the problem of adversarial commerce; the remaining 6 chapters provide the solution to the problem. There is a good framework for the solution and the fundamental elements are highlighted in detail. The examples focus primarily on the author's extensive experience within the automotive industry (Chrysler, Ford and General Motors). However, the principles should be the same for all industries and this book can be used to provide a checklist to monitor, measure, and track progress in the new collaboration approach.

As we see it, this book is nothing short of a clarion call to action in the face of what will otherwise be the inevitable decline of the U.S. economy. Here's the story. In the course of running Chrysler's procurement and supply activity the author discovered a highly successful cost-containment system, SCORE (Supplier Cost Reduction Effort) that evolved into a concept called Extended Enterprise. The approach was based on collaboration with suppliers. Today, as the U.S. faces a hyper-competitive global economy which is threatening our industrial production, Stallkamp believes that the key to regaining our competitive advantage lies in a commercial system that embraces collaboration rather than continuing to cling to an adversarial approach marked by a negative and domineering relationship with suppliers that yields distrust, tension, and instability. The book explores the collaborative approach and how Chrysler employed this counter-conventional thinking. True collaboration, a genuine collaborative management philosophy, must embrace the entire firm, top to bottom. It enables companies to join together to streamline operations, reduce costs, and accelerate product development. The tools of collaboration offer the power to revitalize our mature and declining industries.

"Score!" succeeds in being exceptional at so many levels that it could receive ten stars. This book gave me more insight into operations than half a dozen management courses I took in college. Stallkapm develops powerful frameworks for win-win supply chain relationships and innovation through collaboration. Every manager and engineer should be required to read this book. Collaboration is a hot subject now in the supply chain management. All executives are trying to optimize the supply chain, but get lead astray by conflicting theories, metrics, and company policies. Score! cuts through the conflicts to present an integrated and powerful frameworks that should change the study of operations management in a future. This is the place to start if you want to learn cutting-edge frameworks for operations management.