Jim Champy first achieved international acclaim for co-authoring Reengineering the Corporation, a mid-1990s study that anticipated the arrival of the Information Age and advised companies on how to adjust their business processes to accommodate it. Now, Champy, the Boston-based chairman of Perot Systems’ consulting practice, returns with Outsmart! How to Do What Your Competitors Can’t.
It’s the first of four planned books focusing on the search for new business models. The other three are Engage! (due out in early 2009), which will look at how to attract and maintain customers; Inspire! which will examine how companies manage people; and Deliver! which will offer advice on business execution issues.
Champy sat down with Baseline to discuss how companies can benefit from the principles and ideas covered in the first two books.
Baseline: How did you find the companies you write about in your books?
Jim Champy: I looked at high-growth companies, ones growing at double- or triple-digit rates over a two-to-three-year period. I found about a thousand of them; most are medium-scale companies. I was trying to look at new companies that haven’t been written about as much as Google, Oracle and Microsoft, etc. I’ve found that there’s not much new in management, but there’s a lot new in business.
How can companies apply the principles in your books?
Champy: Information technology is the great enabler of business change. The companies profiled in my books offer real products and services, but they could not operate without IT—particularly the Internet.
Peter Drucker had a great expression: “Go walk in the marketplace.” Companies today can walk electronically in the marketplace. A young executive told me that he could compete with 50-year-olds who in theory knew more than he did because the Internet is such a great equalizer. It wasn’t just his technology skills; it was his ability to get to market fast, learn what customers liked and didn’t like, and adapt quickly in changing his products, services and business model.
I’d advise companies to do the same thing: Look at the Internet as a source of learning and quick adaptability.
How well do companies do that?
Champy: Not nearly as well as they could. The best new businesses are a combination of high tech and high touch. They have very sophisticated business processes, but they don’t leave it to technology alone to solve all their problems. Too often, companies and people in IT make naïve assumptions about how customers can provide their own services, but in a world where IT is changing pretty quickly, that doesn’t always work. In fact, it doesn’t work most of the time.
One of the companies I wrote about, Partsearch Technologies, built its business around cataloging 8 million replacement parts for electronics. The company’s managers learned early on that most people looking for replacement parts get it wrong the first time, so they had to build a very sophisticated customer service function.
Another firm, SmartPak Equine, provides supplements and vitamins for horses. Its call center is staffed by people who understand veterinary medicine, and they’ve become a source of knowledge behind a very intricate technology infrastructure. So IT people must recognize that the answers to a lot of business problems don’t necessarily lie in technology.