We were saddened to hear Michael Hammer died this week at age 60.

The best way we can think of to acknowledge his impact is by announcing the inclusion of Reengineering The Corporation in our upcoming book. Here are the opening paragraphs to our review of Reengineering the Corporation, which give perspective to the work that Hammer and Champy started fifteen years ago:

"Reengineering became the magic managerial term of the 1990s. Cover stories in business magazines touted Michael Hammer and Jim Champy as the strategic gurus of the moment. Companies like Deere, Ford, and Duke Power all found huge success using the concepts. Even Lou Gerstner in his autobiography, Who Says Elephants Can't Dance?, calls out reengineering as having played a role in his turnaround of IBM. The trouble with every fad is the ridicule that follows.

In the 1990s, the term "reengineering" became an easy substitute for the prior decade's "reorganizing,""restructuring," "delayering," "downsizing." The popularity of the term gave embattled executives needed cover when faced with media scrutiny and stock market pressure. The mere mention of a new reengineering initiative acknowledged the severity of a problem and indicated to shareholders that proper steps were being taken. But the actual results varied widely, and business leaders and journalists were quickly off to find and report on the next silver bullet. What's left is general ambivalence for one of the most important business concepts in the second half of the 20th century."

This excerpt is a bit more technical than our typical post, but we're running it because the book does an excellent job of working through the Theory of Constraints to reach and apply solutions. Jack has often said that Eli Goldratt's The Goal was extremely influential in how he grew his business. Reaching the Goal now offers strategies for applying TOC to operations issues today.

Here's a brief excerpt:

The benefits of DBR [Drum-Buffer-Rope, the TOC application for operations] are substantial. One literature review found the following average improvements across 82 companies:(11)

• 70 percent reduction in lead time
• 65 percent decrease in cycle time
• 44 percent improvement in due-date performance
• 49 percent reduction in inventory
• 63 percent increase in revenue

A central benefit of DBR is to change the production process from push to pull: Nothing gets produced unless there's a market for it. Market pull through the internal constraint then optimizes production while minimizing inventory.

Because the market is the key driver of DBR, how demand ripples back through the distribution chain from customers to factory affects DBR. This connection leads to the next TOC application.

Here's a direct link to the excerpt: http://800ceoread.com/excerpts/archives/007581.html

Shortly after his arrival, Mr. Mulally and his new troops bought books to better understand one another. The new CEO read the 1926 classic Today and Tomorrow by Henry Ford. He also met with the Ford family at the Henry Ford Museum complex early on. Ford managers began passing around The Machine That Changed the World, often cited by Mr. Mulally for its in-depth story of Toyota's manufacturing operation.

"The container came at a time when everyone in America was concerned about automation, not just on the docks. The thing that was unusual about the longshoremen was that they got compensation for the loss of their jobs, which most people in the economy did not."

Marc Levinson, author of The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger quoted in How Longshoremen Keep Global Wind At Their Backs: As Trade Soars, Union Workers Prosper by Staying Up With Technological Change; Threat of a Day Without Ports (WSJ, 7/26/04).

For the past year and a half, I’ve been learning about lean manufacturing, or TPS (Toyota Production System.) There are several excellent books on the topic, including Jeff Liker’s The Toyota Way and The Toyota Way Fieldbook. My favorite books in this area are by Jim Womack and Dan Jones (who I’ve done some work for as a consulting editor of late). Earlier this week Jim published an e-letter of his titled A Tale of Two Business Systems (registration required) offering a provocative explanation of how Toyota prevailed. I recommend that you read it.

This prompted me to ask Jim to explain how his books relate to the current crisis. I posed the following questions to him: "Jim, your recent post cast the current crisis in Detroit in an entirely new light. How did your earlier
book The Machine That Changed the World come to identify today's situation? And what are the applicable lessons that automakers, manufacturers, and any other businesses facing harsh market conditions draw from the latest Womack/Jones book Lean Solutions?"

The first segment was Richard Florida. He wrote the very popular Rise of the Creative Class and the follow-up Flight of the Creative Class. He talked about both of the books and his most recent research with the Gallup Organization. Two tidbits:

• In his first book, it talked about the sorts of things that a city needed to support a creative class. The most important is the attitude of openness in the community itself. In his polling research, he has found the largest prejudice to be against age. People often don't want young people in their community. This ranked ahead of race, religion, political view, and sexual orientation.
• Right before Katrina hit, Florida was doing spot polling around the country to find out how happy they are with their lives. He believes location is central to happiness. New Orleans ranked the highest out of the 22 cities polled. The two most important stated reasons were strong religious ties and nightlife.

The second segment was one with Yossi Sheffi, author of The Resilient Enterprise. He wrote most of the book while he was on sabbatical form MIT. He was doing some research for the UK government. Their concern was that the next terrorist attack isn't going to be against Big Ben or the London Bridge, but against Tesco and disrupt the food supply in to the general public. The book is about the operations side of business and how plan for vulnerabilities in the lean supply chains of today.

I only caught the first 15 minutes of this one, but I found it interesting that the CDC and NY Department of Health track OTC drug sales in the city. They believe that people will first look for something at drugstore to fix what ails them before going to the doctor. If they see a spike in Benadryl sales, they know the next place to look is admissions for something potential more serious.

I posted a new excerpt today from the book Let Go to Grow--a book about the commodity market and how to grow by instilling new practices and letting go of the old ones.

You can check out the excerpt here.

How do you get far more output with far fewer workers?

The most believable forecast for 2020 suggests that manufacturing output in the developed countries will at least double, while manufacturing employment will shrink to 10 to 12 percent of the total workforce. What has changed manufacturing, and sharply pushed up productivity, are new concepts, such as "lean manufacturing." Information and automation are less important than new theories of manufacturing, which are an advance comparable to the arrival of mass production eighty years ago.

The decline in manufacturing as a creator of wealth and jobs will inevitably bring about a new protectionism, once again echoing what happened earlier in agriculture. The fewer farm votes there are, the more important the "farm vote" has become. As numbers have shrunk, farmers have become a unified special-interest group that carries disaproportionate clout in all rich countries.

ACTION POINT: Determine the rate of growth in output per person in your manufacturing or operations functions. Is your organization experiencing the manufacturing paradox? Recommend programs for retraining excess manufacturing workers.

This from The Daily Drucker: 366 Days of Insight and Motivation for Getting the Right Things Done by Peter F. Drucker

When June Cleaver wore pearls while serving dinner to Beaver and the family, "positioning" could work. Consumers had limited access to information and companies could generally control how offerings were portrayed within limited media..."Positioning" ignores a basic principle of communications theory. Communication does not occur just because the speaker (or company) speaks. It occurs only when the message is heard, and ideally, accepted....["P]ositioning is out of step with the requirements of the customer and demand economies. The interlinked imperatives of these eras are relationships, execution and the ability to do business on customer terms. It definitely is not, in Ries and Trout's words, "what you do to the mind of the prospect." A more powerful perspective is to enable prospects - and customers - to shape your thinking. The problems with "positioning" does not mean that offerings should not be differentiated. Differentiation means creating or adding values that meet the specialized requirements of target markets. - FusionBranding: How to Forge Your Brand For the Future by Nick Wreden

FusionBranding: How to Forge Your Brand by Nick Wreden is a tough book to classify. At first glance, it appears to look like one of those 'written by committee' consulting firm exercises. It's not. It's a comprehensive book clearly written by one author that attempts to look at branding and marketing from a holistic organizational point of view. Most marketing books are focused on one specific aspect and rarely encompass the breadth of operations, technology, partners/channels and measurement and accountablity systems that are crucial to successful marketing efforts.

The more I read FusionBranding the more I felt that it really should be the textbook that college students read today (and maybe get that mass market unilateral message thinking out of their head). In fact, this would be the perfect book to hand an intern, a new college hire, or an engineer transitioning to the marketing department in order to give them a full perspective on all the touchpoints of marketing within a B2C or B2B mid- to larger-sized company.

[T]he environment that facilitated past branding successes is dead. Unfortunately, old habits die hard. Companies are still attempting to brand with past strategies, even though the world where those strategies worked no longer exists...."Positioning" and the "4 Ps" got imprinted on the genes of an entire generation of marketers, but it's time to bury the concept and come to terms with the reality of a new branding era.

And it's not just new marketers that could do with a conversational-marketing, systems-based, results-oriented approach to marketing.

Most readers here are well aware that the world has shifted from a mass market towards a customer-centric economy. In 'pushing the edges' style author Wreden boldly predicts that in the future we'll move further into a demand economy where pricing is fluid (think eBay) and offerings are entirely personalized and customized. While I'm not so sure of his future prediction, he is right on target with marketing today.

What does branding on customer terms mean? Companies no longer sell. Customers buy. It's a critical distinction....The loss of power and control in the buyer-seller relationship is difficult for some companies to accept...Habits formed by years of sending unidirectional, one-size-fits-all messages to faceless, powerless customers must end. Ultimately, customer economy branding is all about viewing consumers as candidates for relationships, not markets for products.

Wrenden also quotes ex-IBM CEO Louis Gerstner on the IBM turnaround: "We're going to build this company from the customer back, not from the company out." And that right there sums up the entire philosophy that drives this book. Even the chapter on advertising is titled: Marketing in an Opt-In World.

Although released in 2002, the book still feels freshly appropriate for today as Wrenden wrote it with the Internet firmly in mind. Albeit a small mention, that it mentions blogs at all is a testament to its forward-thinking author.

Just the chapter on PR alone justified my time investment - it crisply describes what I do but have struggled to explain to clients. Now with Wrenden's book I know that it's called "constituency management" and it naturally includes a market and competitive intelligence component.

Impatient marketers (I sighed when I realized that the book was nearly twice my 200-page limit) may use the book more like a reference after you've read the first few overview chapters.

I tend to be attracted to a quite different sort of business book (i.e. Re-Imagine is more my style) but FusionBranding has a definite place in the marketers' arsenal.

First, if you are interested in Six Sigma, I recommend The Six Sigma Way by by Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh. I spent two years in the thick of Six Sigma at GE and I think this book is a good combination of strategy and tactics. Most of the titles on the subject are fluff stories about what companies did, not how to do it.

Second, there is a new book out called The Toyota Way by Jeffery Liker. This is another example of there being lots of books the subject. This one seems to tell you a lot about how Toyota has been successful. Liker has organized the content around 14 principles. Here is the introduction to Principle 13: Make Decisions Slowly by Consensus, Thoroughly Considering All Options; Implement Rapidly.:

If you've got a project that is supposed to be fully implemented in a year, it seems to me that the typical American company will spend about three months on planning, then they'll begin to implement. But they'll encounter all sorts of problems after implementation, and they'll spend the rest of the year correcting them. However, given the same year-long project, Toyota will spend nine to 10 months planning, then implement in a small way- such as with pilot production- and be fully implemented at the end of the year, with virtually no remaining problems.

-Alex Warren, former senior vice president, Toyota Motor Manufacturing, Kentucky

1. Grab the nearest (business) book.
2. Open the book to page 23.
3. Find the fifth sentence.
4. Post the text of the sentence in your journal along with these instructions.

"In any well-run supermarket, individual items are replenished as each item begins to run low on the shelf." - The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer by Jeffery Liker