Page 58 - (DK) The Business Book

56 REINVENTING AND ADAPTING

know if the House of Cards internal systems allowed the
experiment would work. It did know, company to exploit global sales
however, that in order to maintain opportunities. In 1994, due to the
the momentum of early growth, it brand’s growing popularity, demand
needed to adapt and reinvent—in far exceeded manufacturing
this case reinvention as television capability. Poor planning and Those who initiate change
producers as well as distributors. coordination led to delayed will have a better opportunity
production and lost sales. The to manage the change
Internal changes solution was a reinvention of internal that is inevitable.
Reinvention and adaptation can also systems based around an integrated William (“Bill”) Pollard
be internally focused on systems, IT system. The product itself—the US businessman (1938–)
recurrent tasks, or operational classic “1460” eight-laced leather
activities. Whether improvement of boot—changed very little, although
this type is based on data from more designs were later added to
formal process improvement the product range. The key change
frameworks (such as Total Quality was the adaptation of internal
Management) or simply on the processes, which ensured supply
experience and intuition of could match demand. industry. The company began with
managers, internal process black-and-white televisions and
adaptation allows companies to Adapting in a recession moved into home appliances during
maximize revenue while also Internal process adaptation is even the 1970s. In the 1980s, production
reducing costs. more important in markets where grew to PCs and semiconductors.
The McDonalds McSnack Wrap, demand is static or falling. In 1986, Samsung released its
for example, takes staff only 21 Operational efficiencies, rather first car phone, the SC-100. The
seconds to make—the shorter the than revenue growth, are the key product was a disaster—the quality
preparation time, the greater the to profit. For insurance companies, was so poor that many customers
number of customers that can be for example, scope for new product complained. This reputation for poor
served by the fewest staff. At R adaptation is limited, so competition quality blighted Samsung for much
Griggs Group Ltd, manufacturer of is price-based—especially in a of its early life, since consumers
Dr. Martens shoes, a reinvention of recession, when customers are regarded its goods as inferior to
particularly price sensitive. The key premium Japanese products.
to maintaining profitability while On June 7, 1993, chairman Lee
remaining price competitive is Kun-Hee gathered senior Samsung
continual process improvement— executives and declared that the
the reinvention of internal systems company needed to reinvent itself.
that deliver the same product to His famous instruction “Change
customers, but at a lower cost and, everything except your wife and
therefore, increased profitability. children” shows how seriously he
The days of the door-to-door took the situation. Lee also
insurance salesperson have long recognized shifting market
since been replaced by telesales dynamics, telling colleagues that
and an e-commerce approach. the company needed to “produce
cell phones comparable to Motorola’s
Reinventing the company by 1994 ... or Samsung will
A notable company that has disengage itself from the cell-phone
successfully reinvented itself is business.” The “new management”
Samsung Electronics. Established initiative that followed, supported
Dr. Martens footwear grew from a
niche fashion item to an international in 1969, Samsung Electronics is a by product and process innovation,
mainstream hit within a matter of years. subsidiary of the Samsung Group, put the emphasis on the quality
R Griggs, the brand’s producer, had to which aimed to exploit opportunities and innovation that Samsung is
reinvent processes to match demand. in the emerging technology now renowned for, and galvanized