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October 9, 2009

US Business model: Lesson in parallel

A very large American manufacturer and its equally large Japanese competitor decided to hold a canoe race down the Detroit River, with the winner securing bragging rights for the following year. Both teams were given 30 days to develop their strategy and prepare their teams to reach peak performance before the race. On the big day, Team Japan won by a mile.

Team America, very discouraged and disappointed, decided to investigate the reason for the crushing defeat. A canoe steering committee of senior managers was formed to investigate the root cause and recommend appropriate action. Their conclusion was that Team Japan had eight people rowing and one person steering, while Team America had eight people steering and one person rowing.

Unsatisfied with the internal conclusions and feeling that a deeper study was in order, Team America's management hired a consulting company and paid them a large amount of money for a second opinion. After considerable time and great expense, they advised, of course, that too many people were steering the canoe, while not enough people were rowing.

Not sure of how to utilize that information, but wanting to prevent another loss to Team Japan, the rowing team's management structure was totally reorganized to four steering supervisors, three area steering supervisors and one steering manager. They also implemented a new pay-for-performance program that would give the one person rowing the canoe greater incentive to work harder. The program was launched with much fanfare and named "Team High Incentive Canoe Kickoff" (THICK), with meetings, dinners and free pens for the rower. There was discussion of getting new-technology paddles, canoes and other
equipment, extra vacation days for practices, and bonuses.

The next year, Team Japan won by two miles.

Humiliated, Team America's management laid off the rower for poor performance, halted development of a new canoe, sold the equipment, and cancelled all capital expenditures for new technology. The money saved was distributed to the senior executives as bonuses, and the following year the racing team was outsourced to India.

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