Symbiotic Organization: Key to Customer Relations

THE JOURNAL RECORD, June 4, 1992 | Go to article overview
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Symbiotic Organization: Key to Customer Relations

I've devoted 25 percent of my columns over the years to a hundred ways to get close to the customer _ passionate leadership, exhaustive measurement, meaningful incentives. Here's my scary conclusion: Apply them all and there's a good chance that five years from now you'll be no closer to the customer than today.

So what's the answer? In short, it's the "gotta" factor: Those who want to transform their enterprises must create autonomous, modestze, close-toerket units that serve their small markets _ or else.

Ben Lytle, chief executive of the $2 billion (revenue) Associated Group of Indianapolis, was proud of his effort to decentralize the financial services company, until he got in the elevator one day: "I was really excited about having gone from a functional organization into five major business units. A claims processor was in the elevator too and I asked her, `How do you like working in the new structure?' And she said, `Oh, real well.' And I asked, `Where do you work?' I expected her to say something like, `I work in the commercial division, we support small businesses.' But she said, `Fourteen.' All that had changed for her was the floor of the building where she worked. Nothing else!

"That experience really made me look at how to change culture. You have to change what people see, where they live, how they're paid, everything."

So he changed everything he did, creating a series of small, tightly focused companies (collectively called Acordia). Each has a CEO, about 100 employees, its own facilities, total profit and loss responsibility, a local board of directors (mostly outsiders), even the right to make acquisitions.

Acordia Business Benefits of Evansville, for example, has a potential market of just 11 counties.

"We either make it or break it on 11 counties in Indiana," CEO Russ Sherlock said. "So we have to be the best darn insurance company for these counties that anyone could ever want."

The early going suggests that Sherlock and his colleagues are doing just that _ tailoring products to small and middlezed business customers' needs in ways they would never have dreamed of doing before.

Why does Sherlock bend over backward? He's gotta!

Pat McGovern, CEO of International Data Group (IDG) which publishes 150 magazines including Computerworld, understands: About 4,000 International Data Group employees are broken into 80 autonomous business units with about 50 people in each. Every unit turns in an annual business plan, with goals that are normally aimed at "growing revenues at twice the rate of market growth," according to President Walter Boyd.

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