Adaptive Enterprise: Creating and Leading Sense-And-Respond Organizations

by Stephan H. Haeckel

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...

• Format: Hardcover
• Language: English
• ISBN: 0875848745
• ISBN13: 9780875848747
• Release Date: July 1999
• Publisher: Harvard Business Review Press
• Length: 295 Pages
• Weight: 1.45 lbs.
• Dimensions: 1.2" x 6.4" x 9.5"

Customer Reviews

The Future of Service Industries

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

A book full of really wonderful gems

As I am quoted as saying elsewhere "I wish I had had this book years ago!" In 1994 when Steve first introduced me to these principles, now so clearly set out in the book, I intuitively recognised their brilliance, and usefulness. The problem came in trying to implement a process that was itself in the throes of development. There is many a slip between "grasping the concept" and "making money from it."In one sense, there is little that is completely new in this book. But, what a gem, where else have all the essential pieces been put together in such a logical and user friendly fashion?I note that reviewers have not yet reached the Annexures. Using the "Adaptive Decision Process" resulted in the most exciting and valuable discussion of high level business strategy that I have ever been involved with. Debating with my management team the many strategic choices that were available to us in about 35 areas was a time consuming exercise. It took all of a day! As we progressed we found that we had developed about five possible strategies for the future. We were rather confused as to how we would make the many choices. Then came the enlightenment from modeling the financial impacts of each. We discovered that there were only a few choices that had significant financial impacts. And for once the entire management team was agreed on what these few vital choices involved. Talk about a powerful management process! This very powerful approach is hidden in an Annexure. Readers be warned, there is gold in the pages of this book, but there is so much that it is easy to miss much of it.Another gem is the Commitment Management Protocol. My dream is to computerise this in such a manner that my email in box becomes my "promise" list showing what I owe to whom when, and what who owes to me when. Performance management becomes quite simple. This is despite the fact that we are now in an era when jobs can no longer be planned, scheduled and delivered according to schedule because those troublesome folk, our customers, do not want the standard services or products our assembly lines are designed to deliver. They want something almost unique to them.The idea of "negotiating" conditions of satisfaction makes so much sense that I cannot believe it has taken so long for someone to write about it.My congratulations to Steve Haeckel on a great addition to "wisdom literature".

An Important New Way of Thinking About Organizations

Many business books focus on the best practices of 1995 or earlier, which dooms the reader to being constantly behind the curve in developing and implementing best practices. This book is one of the rare exceptions that attempts to push the organization beyond today's best practices. I applaud the effort and found that the metaphors were powerful, and the thinking about how to implement the new concepts to be solid. I was pleased to see the references to newer ways of understanding customers (such as behavioral observation). Most companies are using outmoded ways of tracking and responding to customers, and this book has many good things to say in that direction. A potential weakness of the book is that it does not say much about how to anticipate customer responses so that you can start preparing well in advance for significant adjustments. Not everything can be done instantaneously as the customer changes. I liked that the book focused more on customers than on competitors (the overemphasis on outdoing competitors is a flaw of many academic business books, especially from Harvard Business School Publishing). The greatest strength of the book is a thoughtful discussion of the organizational consequences of creating more flexible and successfully adaptive enterprises. I was not convinced that anticipating change is as impossible as the book suggests, but this ability to sense and respond is very helpful when you miss (which will certainly occur in many cases). If you want to usefully stretch your mind about the rapid changes in your market, this book is a valuable resource for you. It will help you overcome your stalled thinking about how organizations should focus and operate. Enjoy!

A practical prescription for radical change.

Haeckel has written one of the most thoughtful and useful books on the enterprise available today. By use of simple metaphor, Haeckel makes the distinction between the existing build-and-sell model and his proposed sense-and-respond model. Build-and-sell firms are like bus companies with fixed routes and schedules designed to meet predicted customer demand. Sense-and-respond firms are like taxi companies that dispatch cabs in response to customer demand. Although the concepts are well presented and readily understood, Haeckel offers the reader no easy answers!Hackel avoids using the usual metaphors of complexity science but instead adopts and explains the term "adaptive enterprise". This choice enables him to focus upon three essential elements of business - governance, leadership, and commitment.Beware! Adopting his customer focus concepts will produce radical organizational change. For instance, "Sense-and-Respond firms do not forecast demand for products and services. But they do place selective bets upon the stability of fundamental customer needs and on what capabilities should be in their modular response repertoire." The need to create modular organizations that support modular products - a point often misunderstood in practice by even progressive build-and-sell firms - is well made in Appendix A.Haeckel frequently returns to the theme of a phased transition to a sense-and-respond model and demonstrates a profound understanding of the risk and reward of change in an existing organization.

A practical methodology based on three key ingredients

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