Dec. 21, 2004
Are you really Y2K ready? Think strategy, not computers.

If you're an executive in the U.S., in Canada, in much of Europe, or in parts of Asia, chances are that you confidently believe that you and your company will make the transition from the year 1999 to the year 2000 with only the smallest of business problems. Indeed, there's reason to be comfortable. More than 90% are very, very confident -- some to the point of absolute certainty -- that U.S.-based manufacturers will make it into the new millennium with nary a problem, indicates a survey of senior financial executives done by the Manufacturers Alliance, Arlington, Va. Some 97% of those who responded consider their customers, suppliers, and subsidiaries in Canada well prepared to deal with computer-related and other Y2K happenings. An impressive 93% express similar high levels of confidence in those with whom they do business in Japan. And 92% of the executives look at the 15-nation European Union with Y2K confidence. But there's another Y2K issue that's not gotten a lot of attention. This issue is not the lead story on the nightly news, not the stuff of NewsHour features on PBS, not even the focus of local-newspaper business features. It's the matter of being strategically ready for the new millennium. Please don't stop reading right now, although you may be tempted to do just that. You might rightly ask how bold, or presumptuous, or naive I am to bring up the notion of a strategy for the new millennium. Or, for that matter, for the next century or even for the century's first five years. It boggles the mind to think that a single business strategy will stand the test of 1,000 years, 100 years, or even five years. And, of course, you're correct. First, the notion of a single winning strategy, like the notion of a single model for company success, is ludicrous in a world of myriad economic, political, technological, and cultural differences. No single strategy, for example, can accommodate the reality of the new manufacturing, the wealth-creating segment of the global economy that not only makes things, but develops, markets, distributes, and manages them as well. Nor can a single strategic model successfully embrace the Internet revolution, the telecommunication's explosion, or the world's continuing economic integration. Second, predicting even the near-term strategic future with comforting certainty in a world of economic and political uncertainty -- a world in which unexpected developments accelerate the pace of change unpredictably -- is virtually impossible, In fact, complexity theorists would argue that executives ought not to impose strategies on their companies, but rather allow strategies to emerge from teams of people who are closest to the complexities of change. Third, although many of the strategic priorities that companies have established for the new millennium -- such as "Striving to make people's lives better" -- are well-phrased and noble-sounding, they won't matter much if companies don't follow through with effective implementation tactics. Executives cannot ignore tactics -- any more than they can ignore company visions or company strategies that form the context in which tactics are designed to work. They are a part of coming to terms with change, with imposing some measure of discipline on the uncertain and the unpredictable. But particularly in the world's largest manufacturing firms (those that appear on the IW 1000) CEOs need to balance their concerns with specific changes -- a currency crisis in Thailand, an interest rate rise in the U.S., a banana-flavored trade crisis with the European Union, or presidential succession in Russia -- with the longer-term interests of the companies they lead. And CEOs and other senior executives must be ready to provide the leadership that allows -- indeed, encourages and sustains -- action on any number of issues with occurrences that are likely to be more uncertain than certain. I like the counsel that John F. Welch Jr., the highly regarded and often-quoted chairman and CEO of General Electric Co., offers about dealing with specific business-related global hows and whens. Focusing on them, he contends, is less important than "growing a culture that is both challenged by the unexpected and confident in, as well as capable of, dealing with whatever comes along." And so the strategic question about Y2K readiness is not so much about the priorities that you've established for your company or for the specific near-term tactics that you've had a part in creating. It's about creating a culture in which challenges can be successfully met when and where they occur in your business world. Now, again ask yourself: Is my company really Y2K ready?

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