A Better Way To Do Business
The accounting scandals, management malfeasance and outright greed of the first years of the 21st century "make the actions of the robber barons look tame," writes business collaboration expert Thomas Stallkamp. In SCORE!, Stallkamp writes that the old business model that has encouraged companies to remain strongly independent and separate from other firms seems to be broken, and organizations need a new business model to replace it. His solution is to replace this adversarial business model with a model that emphasizes more strategic partnerships and collaboration with related firms.
While he was president at Chrysler and vice chairman of DaimlerChrysler, Stallkamp helped to lead the organization to new stability and growth with his breakthrough strategy SCORE — the Supplier Cost Reduction Effort. He explains that for modern managers to succeed, they need to adopt a similar model based on relationships, measurements of goals, and common strategies.
As more global competition enters the market arena, Stallkamp points out that new approaches are needed to make established firms successful. The answer that he describes in SCORE! is the collaborative management approach to dealing with employees and external suppliers that Chrysler and DaimlerChrysler used during his more than 20 years with them. He explains that Chrysler's Extended Enterprise concept, which used strategic partnership principles in the 1990s, demonstrated that more strategic approaches to suppliers, employees and others can raise corporate performance levels and financial results. He also points out that Dell Computer and Intel both use the same principles Chrysler helped to create, and describes how strategic and planned collaboration is being used by more firms every day.
Start at the Top
Stallkamp writes that the change from the old-line, command-and-control approach that forces a separation of companies to a more collaborative approach with suppliers and employees takes much hard work, and it will have to start at the top. How this change will affect the entire corporate culture must also be carefully explored in detail, he explains, but such introspection can benefit any firm. If it is applied correctly, with significant planning, Stallkamp writes that "it can improve the culture of a firm and stimulate growth so that the next generation thinks it is rewarding to go into a business career."
When Stallkamp started running Chrysler's procurement and supply activity in 1990, he was ready for a change from the previously harsh world of automotive procurement. By 1992, he writes, Chrysler was already utilizing suppliers as partners in both production and development. With its SCORE system, it was getting more with less money "by soliciting and approving supplier ideas to change the old operating system." Instead of demanding price decreases, Chrysler was offering to work with the supply base to implement supplier ideas that streamlined interactions or eliminated redundancies in the system.
The concept of the Extended Enterprise was to treat suppliers and dealers as autonomous extensions of the company. By getting everyone focused on reducing the cost of developing and producing vehicles, and encouraging its suppliers to contribute most of the savings in the way of price reductions, Chrysler saved more than $500 million in cumulative costs by mid-1992.
Stallkamp starts SCORE! by describing the problems that command-and-control management styles with the constituents of a firm — suppliers, dealers, employees or managers — and adversarial commerce create for companies, including distrust, suspicion, poor communication, lack of joint planning, and even bad customer relations. Next, he describes better ways to share information and implement collaboration. These include making information more transparent, building a measurement system, removing internal resistance, creating an atmosphere of trust, mutually defining goals and clearly defining responsibilities.
Stallkamp explains that, with the proper commitment, "collaboration can yield better results in the short and long term and can provide a way to tap into the greater resources of the extended enterprise that traditional short-sighted methods miss."
Why We Like This Book
Stallkamp's effort to revitalize the economy through the use of more collaborative business methods offers a valuable look at a management approach that has been effective in many industries. SCORE! not only presents the reasoning behind adopting a business model that emphasizes strategic partnerships, but it also demonstrates how the model can be implemented within any organization ready to get more from its suppliers, customers and employees.