Repeatability by Allen James & Zook Chris

Author:Allen, James & Zook, Chris [Zook, Chris]
Language: eng
Format: epub, pdf
ISBN: 9781422143308
Publisher: Perseus Books Group
Published: 2012-02-13T14:00:00+00:00

The Elusiveness of Adaptability

In principle, a business built around a well-defined differentiation and an organization predicated on clear, well-internalized values should be able to perform much better than the average (more complex, less transparent) business on all four stages of the learning cycle: recognition, interpretation, decision, and mobilization. Recognition should be easier for an organization that shares from top to bottom a consistent vocabulary and can gather comparable information across the business versus the “pattern of no pattern.” Interpretation, in the absence of hubris (a big and sometimes not easy requirement), should be easier given a common worldview, a set of core principles, and appropriate metrics on which to focus. Decision should be faster in a business that has simplified around a model with agreement on what really matters and the principles to drive some of the key trade-offs. Finally, mobilization should be more effective in an aligned organization with a shorter effective distance from the CEO to the front line.

It's not as simple as that, of course, especially in a period of sustained success, when the least risky path in the long term may be the most risky path in the short term (because reaction can be distracting and consume energy in the absence of a “burning platform” or crisis). The data shows that although adaptive systems were important for high performers, there was a less marked difference between the best and the worst performers—essentially because no one is fantastic at adaptability. In our two hundred–company database, well-defined processes to adapt (the four phases listed above) were felt to exist (a 4 or 5 rating on a scale of 1 to 5) in 48 percent of the best quintile of performers and in only 9 percent of the other four quintiles (see figure 4-1). But when we probed with questions on the relative superiority of the adaptive systems, we found agreement with the statement that the company had superior learning systems in only 36 percent of the top quintile in performance, 10 percent for the average performers and 6 percent for the bottom performers. When we constrained this further to “strongly agree,” the percentages all dropped markedly, from 18 percent for the top performers to 0 percent for the bottom group. Clearly, learning is the least developed of the three Great Repeatable Model design principles across all companies. It's a new and increasingly important source of competitive advantage in many industries, waiting for superiority to emerge.

FIGURE 4-1

Adherence to design principle 3: closed-loop learning

Source: Bain 200 Company Database of Repeatable Models.

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