Finally, a company must hire "outside the box" thinkers as well as those who can do the present work better. The goal, again, is a dynamic balance. We do not know of a simple paper-and-pencil test for absolutely determining these candidates. But some companies attract more than their share of iconoclasts, and others hire only those who think as their managers do. Competent interviewers apparently distinguish between those who advocate the company way and those who might constructively challenge it.
As value migrates, energizing the organization requires reallocating human resources from traditionally powerful functions to those that will be critical to future success. For example, in the pharmaceutical industry during the 1960's and 70's, the value of breakthrough products (often serendipitous) and me-too offerings was maximized through astute pricing, intensive sales efforts and aggressive marketing campaigns. More than half of industry profitability was driven by these functions. In the 90's, however, pricing flexibility is collapsing, and the degrees of freedom for sales and marketing are becoming severely circumscribed. Relative importance will shift to discovery, development and account management for key customers (managed care organizations, other large purchasers and the Food and Drug Administration).
The value migration process determines not only which functions will rise in importance, but which new skills and technologies are necessary to meet future customer needs. Professionals with future-relevant skills must become a part of the organizational fabric. Without integrating new skills into the company's business design, that design will become increasingly irrelevant to customers.
The above actions help create a work force, including a management team, capable of dealing with the discontinuous change that value migration implies. The team must identify the drivers of value migration as it approaches, and must understand the mechanisms by which the drivers interact with one another. The team must also form the company's response early. Leaders can help in three additional ways:
Get the organization to face outside. It is vital to hire people with different experience and the capability to think outside conventional confines. External goals related to the marketplace such as share of market, quality of market share, customer satisfaction and customer retention provide the right type of compass setting. Constant scrutiny of performance against such goals is critical.
Insist on "out of the box" market research/exploration that includes asking tough questions directly to your toughest customers. What are they telling you that you don't want to hear? What are new emerging competitors in different industries or locales telling you, via these customers, about new approaches?
Concentrate on discontinuous improvement as well as continuous improvement. The quality movement in its many forms has been, and is, fundamental. But too often it focuses on doing the old things (in a strategic sense) better. Value migration puts a premium on doing new things. A major tension in the organization is between doing new things and doing the old things better. Both are important. A strategy focusing only on continuous improvement is dangerously incomplete.
Implicit in the recommended actions for responding to the need and ability to move is the crucial importance of asserting leadership. Effective leaders look beyond their organizations toward their customers and competitors -- the key groups, along with distribution channels and business partners, that will determine the destiny of the company. These leaders, and their top managers, will also look deeply into their organizations, listening to and talking with production workers, who may understand quality problems better than the vice president of manufacturing, and with those in the sales area, who may be more familiar with what customers want than is the marketing vice president. And effective leaders and their top managers will dig into customers' organizations to talk with -- and listen to -- those who actually use their company's offerings, and they will ask the hard questions. Overall, effective leaders and their organizations are poised for the future.