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Reinventing the Enterprise
A method for meeting the challenge of the future
Contribution of Abdelkebir Mezouar, President of LMS Conseil, at the International
Colloquium on Internal Auditing: "What kind of auditing in the 21st
century?". (Casablanca, 5 to 6 June 1997)
The ten or fifteen minutes allotted to
my intervention made me think of the international management consultants meeting held in
San Francisco where I was given 7 minutes to describe the experience of consultants in
Morocco and the implications thereof in an African and Arab perspective. I suggested the
following to my Californian colleagues, ever careful about holding to the time slots
imparted: "I will begin" I said, " and If after 7 minutes you think it
would be a good idea for me to continue, that's how we might proceed. If not, all you have
to do is stop me". The whole matter wound up in an impassioned discussion lasting 70
minutes!
I mention this simply to point out the
completely relative nature of the concept of time. Furthermore, in pondering about the
subject of our meeting today, it suffices to go back only 3 or 4 years when the evocation
of the year 2000 in the press or by decision-makers was wrapped in an almost mystic aura
of a distant future studded with uncertainties. Today, speaking about K2 no longer has the
same aura, it's going to be here in less than a thousand days. Suddenly, to make an
impression, some people prefer to speak about the 21st century or even the 3rd
millenium! This, because we are going through something akin to a dream and a reality
that, as the days pass by, is becoming an increasing source of anguish - one where no one
really knows where he or she stands. A common reaction is to look further and further
ahead in hopes that the real life situation of today will simply move smoothly into the
future.
Here, I would like to take time to thank my
friends at AMACI for their invitation, and especially for having taken the initiative of
initiating a reflection on the crucial issue of the future of the role of the consultant,
whether internal or external. This is essential to our profession, as well as to many
others, due to the high degree of complexity of today's world which requires a total
rethinking of our beliefs and questioning of our deepest convictions.
"Yesterday's certainties are almost
always seen as the absurdities of today"" said Peter Drucker. Today, no one
denies the fact that the earth spins around its axis. But this now irrefutable concept
didn't stop its instigator from being excommunicated. Why? Because he was contradicting
the beliefs and biases prevalent in his day.
So, speaking about the 21st
century and the profession of consultant necessarily implies questioning the beliefs and
thinking governing our thought patterns and manner of acting.
Therefore, I suggest we begin by putting
into perspective the far-reaching changes being so widly felt at twilight of this century.
Further, I would like to share with you some of the lessons to be learnt from the modest
experience of change undergone by men, women and systems in Morocco.
1-80% of the companies ruling the world
twenty years ago no longer exist. We don't even know the names of 80% of the companies
that will be world leaders in five years' time.
2-By the year 2000 to 2005, one active
person out of two will no longer be working in a company, but for a company.
This represents a complete change compared to conventional concepts of life employment,
job security and only one profession or trade until retirement.
3-In the year 2000/2005, 70% of world
production will be intellectual in nature, in other words, instead of industrial products,
most will emanate from information technology and creative intelligence rather than from
material resources.
We are experiencing a genuinely new
revolution on a planetary scale. Unfortunately, it is conducive to mobilizing our
propensity to resistance, more than the capacity to overcome obstacles and keep pace with
the inevitable changes so characteristic of the present day environment.
Among the fundamental changes taking place,
two in particular will weigh heavily on the workings of organizations in forthcoming
years, namely the information revolution and the acceleration of technical innovation.
Firstly, the days of information as a rare
commodity and instrument of power are now past. Information is fast becoming a strategic
resource available to everyone. It causes human beings a problem of pace, and consequently
of behavior and role perception in the corporate entity.
For example, when you turn on your computer
and access the Internet, the floods of information rushing in, no matter what the area
searched, are such that one feels completely overwhelmed. And this is just where the
problem lies. It is much less a problem of volume than manner of navigation. In other
words, it's a question of the reasoning, the way in which you will access the information
looked for.
Once the desired information is obtained,
in order to keep up, one has to be able to react immediately. The speed of reactivity
becomes the leading parameter governing the acquisition of a competitive edge in a world
of ruthless competition. For instance, think of a firm in Texas that issues a call for
tenders on the world market over the Net for the purchase of 10,000 tons of tomatoes
specifying the price, weight, texture or color. All this with a deadline of three weeks.
The only valid reaction is to send an offer immediately. If not someone else will; and you
are the one who will wind up being the loser. Nine times out of ten this is what occurs
when one is first obliged to comply to series of rules or regulations dating from another
era. All this without counting the tedious chore of plodding through all the useless
administrative red tape that generally follows a go ahead from the bosses.
The speed and rapidity in handling
information has to be tackled, in addition to the sheer volume. This underscores the
principle of reactivity which lies at the heart of management today. Our
relationship to information is steadily changing and therewith the very vision of
organization as a whole. Traditional type organizations can no longer be effective.
Differences in hierarchy and excessive reliance on procedures constitute major stumbling
blocks that risk producing disastrous consequences in the future. From passive
consumption, we are fast evolving toward a system of exchange and co-production of
information. The well-guarded secret is no longer a key to power and success. It's just
the opposite that is becoming the rule of the day.
Secondly, the image of a slowly and
mechanically evolving world is now giving way to sudden acceleration and the spread of
progress generalized. This also harks back to the question of perception and attitude, as
opposed to trends presently changing the way we understand the world and transform set
beliefs inherited over ages past. One aspect particularly affected is the belief in the
permanence and permanence of acquired positions.
Traditionally, technical progress has been
understood as ever increasing sophistication in the processes and products available on
the market. Miniaturization is becoming greater and greater, packaging is being customized
more and more to comply to consumer tastes. But these are not the real stakes that concern
us here. By way of example, in Japan it seems that a washing machine running on a system
of ionization has been developed. In other words, without detergent! If this is true, one
can imagine the consequences this could have on detergent manufacturers. It would signify
a whole branch of a worldwide being phased out. In today's world the real challenge is not
only to boost sophistication of what we already know how to do, but to anticipate the
evolution of the future.
So it is obvious that nothing is really
definitive. Microsoft almost went bust four years ago because Bill Gates failed to
recognize the importance of the beginnings of the Internet. He had to double his efforts
to make up for lost time in hopes of taming a phenomenon that in such a short space of
time has become worldwide, with considerable financial impact.
As a result, something fundamental has
occurred for countries such as ours. It's not enough to be big and powerful to consider
oneself completely protected against any kind of threat. Some famous instances could be
cited by way of example. Take the case at the beginning of the '90s when IBM was basking
in 40 years of unrivaled success. Subsequently, in the space of four to five years it saw
its huge profits crumble. Big size often leads to reduced and faltering reflexes. The
alarm system becomes rusty and one starts to lose ground with regard to the "small
fry" showing enough acumen to break into fields previously considered by big boys as
risk-free. The lesson to be learnt is that wealth no longer resides in force, but in
intelligence. And intelligence knows no boundaries between North and South or big and
small. This offers us an historic opportunity to bypass a certain mechanical patterns of
history. It is up to us to know how to exploit it. To do so, one must keep in mind a
certain number of trends that will soon be clear to all.
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Activities
connected to the production of knowledge (innovation, research and development) are going
to occupy an increasingly large place in the production of wealth. They already represent
nearly 15 % of the gross domestic product of industrialized nations. The figure will reach
30 to 40% in 2005. Some small countries devoid of natural resources are already exporting
software representing the value of Algeria's gas exports, i.e., 3 to 4 billion $U.S. The
ability to mobilize individual and collective intelligence at the national or company
level, constitutes the real stakes for the future.
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Competitiveness
is governed by a yardstick of proximity to the customer and degree of reactivity in face
of competition. Heavy weight and highly sophisticated structures are breaking up and
giving way to micro entities. These micro entities are often linked by network systems.
They operate with dynamic interaction between themselves and the immediate environment
which, in turn, participate in internationalization. As soon as an enterprise's force no
longer resides in its ability to produce, its capacity to coordinate becomes primordial,
in other words, its ability to manage simultaneously the information flooding in to any
one point of the company or the world at large.
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As a result, corporate entities are obliged to
refocus their activities on their basic trade or on new ones, and to rid themselves of the
auxiliary functions occupied by hoards of redundant employees. The case of banks and
public administration is significant in this respect. A recent study on the Bank of France
revealed that of the 18 000 employees accounting for 8 billion francs worth of salaries
alone, only 500 to 800 were really required to satisfy the needs of the bank whose job it
is to define the monetary policy of France! Needless to say, with such a huge handicap
very few businesses would be able to survive.
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The consequence is that conventional types of employment will tend to disappear. This
trend will continue to gather momentum in addition to the painful issue of unemployment.
This situation will persist until the time comes when we will be able, through new means
of action, to find a solution to unemployment by reducing the ill effects of our
old-fashioned and outdated systems. Original and courageous initiatives have already shown
their effectiveness in this direction. For instance, take the example of "branching
out". But this implies another vision of action and effort than the one so much in
vogue so commonly designated by the term "level achieving" (mise à niveau)
applied to almost any area of activity. The problem does not consist of simply making up
for lost time; it means moving even further ahead to generate one's own dynamic for the
creation of wealth. This cannot be attained by limiting one's self to ingurgitating the
achievements of one's neighbor; rather, it requires searching for personal and individual
solutions. |
It is essential to understand that we are
in the midst of undergoing fundamental changes in civilization. We are entering an era
governed by different manners of thinking diametrically opposed to our old ways. Therefore
we are obligated to change by ourselves the methods of reasoning, if not we will be left
behind. The real difficulty is our fear of seeking alternatives we do not yet completely
comprehend due to a perception of the threat of losing what we already have, even if we
are not totally satisfied. This constitutes a major mistake. Of course, changing the way
people think is not all that easy. Often, true awareness comes only after experiencing a
serious crisis. But by then, it may already be too late. In any case the cost of repairing
harm done is way out of proportion compared to the cost of reacting on time. Such a
situation also results from the weight of tradition and the tendency to favor the easiest
solutions. Of this, consultants are well aware as they are so often asked to furnish
complex solutions to options that have already been taken.
Nothing is harder to change than inset
dogmas. Often one thinks of an organization in a way that is more akin to
"akida" than common sense and the relevancy of systems already in place. In the
collective imagination, organization is represented as a stable structure in the form of
spaces and functions symbolizing well-defined territories. Rational logic has taught us
that to understand the complexity of the modern world, we have to chop it up into small
parts. Therefore, to be effective in the workplace one must be specialized. The result of
the ensuing race to adapt is that instead of devoting all our energy to production and
creativity, we find ourselves fighting to conserve our vital space and acquired privileges
under the cover of respect for rules, hierarchy and authority.
In this way we remain far removed from
organizations playing a leading role in world competition. Not everyone has gone this far,
but trends show that a move is being made toward the mobilization of creative resources as
opposed to the protection of acquired privileges. To be competitive, a sense of turn
around is essential. In an unstable and unpredictable world, it is crucial to know how to
adapt quickly to the new constraints imposed by technical progress and new ways of
conducting business. The most crucial point is the result achieved and the way in which it
has been obtained (which in turns leads to many burning issues on ethics).
It is obvious that such a tremendous
transition implies a genuine cultural revolution that few individuals are ready to join.
However, in Morocco certain individuals have ventured to do just that, in some instances
for over more than 20 years. This actually occurred in the pubic works sector where we
were direct witnesses and participants in our capacity of consultants. More recently,
others have moved in the same direction under the pressure of competition (SGS Thomson,
Lesieur Cristal, etc.).
With regard to these major stakes and
changes, in Morocco and elsewhere, we can cite three different categories of individuals:
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Those who have
got the message and are proceeding accordingly. |
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Those who for a
long time considered themselves immune and who from one day to the next found themselves
up against a wall, having to confront a crisis situation. |
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Those who,
unfortunately, have still not understood and who risk sooner or later a painful awakening. |
The great majority of individuals fall into
the last category. Strangely enough, it is in the category where one finds the greatest
number of seminar and colloquia participants. Maybe it's because they spend more time in
conferences than doing "real" work out in the field.
Obviously, this is not the case of any of
you here at this conference who have had the kindness to listen to what I have had to say.
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