Schwerpunkt: Be Careful What You Wish For

Boyd observed that:

Schwerpunkt acts as a center or axis or harmonizing agent that is used to help shape commitment and convey or carry out intent at all levels from theater to platoon, hence an image around which … initiative of many subordinates is harmonized with superior intent. In this sense Schwerpunkt can be thought of as … a medium to realize superior intent without impeding initiative of many subordinates, hence a medium through which subordinate initiative is implicitly connected to superior intent. Patterns of Conflict, 78.

As you can see, the Schwerpunkt concept is a powerful leadership tool, but be careful that you don’t use it to lead your organization over a cliff.

Honda was on the verge of doing just that, and the culprit was our old friend, numerical targets and specifically, numerical growth targets.  As the Wall St. J., explained in an article a couple of days ago (paywall),  Honda Motor Co. Chief Executive Takanobu Ito, proclaimed to all and wide that his intent was “Delivering attractive products to customers quickly, cheaply and with low carbon emissions.”  But his Schwerpunkt was ” … a target he announced in 2012: He said Honda would nearly double its annual car sales to six million vehicles by the year ending March 2017.”

The focus on growth certainly harmonized commitment and actions.  As with so many companies before, however, the result was a number of shortcuts in quality and design in order to reach sales goals. Honda’s new global flagship model, the Fit, for example, has been recalled several times, leading CEO Ito to take a cut in pay to symbolize his responsibility. As one analyst summarized the situation:

By chasing volume, Honda “started to lose sight of what it means to be Honda,” said Takaki Nakanishi, an auto analyst who runs his own research firm in Tokyo. Its focus on offering inexpensive cars that would sell widely in emerging markets watered down the edgy brand image, he said.

In what is a very good sign for Honda, Mr. Ito seems to recognize this:

“We need to be careful with that number,” he said at the Tokyo event last month. “I have no intention of getting in the way of business development in various regions, but what’s more important is to prioritize making our customers happy.”

I cannot understand how execs making millions of dollars a year can keep committing perhaps the most elementary mistake in business. My guess, and it is just a guess, is that from their standpoint, they’re not making mistakes at all but doing what they believe that their owners / boards want.

As an aside, this is an area where family-controlled businesses* can have a big advantage because they can ensure that management focuses on the health of the business over a multi-generational time span (i.e., minds the store).

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*The Cox Family Enterprise Center at Kennesaw State University is planning to restart their Executive MBA for Families in Business, and the program’s director has assured me that they will still be using Boyd’s strategic framework as the backbone of the program. More information as it becomes available.

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