I'm fascinated by these capacities. I'd probably have directed a feature film by now if I had this kind of indefatigable energy and certain conviction.
DONALD POVEJSIL
62, vice-president, corporate planning, Westinghouse Electric Corp., through December 1987
My whole concept of what strategic management is all about has changed. Ten years ago I believed the key to strategy was tightly reasoned analysis of markets and competitors. My thinking has really been turned on its head. I have come to believe that the entrepreneurial vision, the visionary part of the process, is what's most important.
It's a painful realization. My father spent about 45 years with General Electric, and I was at Westinghouse for 38 years. But my daughter works for Apple Computer. I've been there a couple of times, and I talk with her a great deal. Clearly there was -- and still is -- a strong animating vision at Apple Computer; the people at Apple are trying to change the way people work. You can feel that when you walk through there.
In 1979 we [Westinghouse] became quite active in running a venture capital fund. I also became very heavily involved with a program of beginning new businesses within the corporation, intrapreneuring. I rubbed shoulders with some entrepreneurs, and it dawned on me that what had been missing at Westinghouse was a coherent and workable vision. At a small company, you very seldom saw anything like a comprehensive market analysis -- or any of the things that big companies like to do -- but there was a feeling that this ought to work. People moved on that gut feel. The founder just believed that this was the way the world worked, and he couldn't really understand why the rest of the world didn't see things his way. You could see the way that type of vision, particularly if it was used as the rallying point, affected the decisions, performance, and motivation of the entire organization. You saw people making day-to-day decisions guided by that vision.
I could detect a distinct correlation between this notion of vision and the performance of the 20 or so Westinghouse business units. The good ones had a vision. As for the bad ones, it was hard to tell why the people had come to work in the morning.
This is a radical change in thought, and it's not easy to sell. Just looking at these small companies, there's a fair amount of evidence in front of our eyes. But people don't necessarily believe data. Thirty-five percent of the population believes in astrology, after all. But vision is the linchpin of strategic management; there's no other conclusion you can reach after a while.
I think the benefits of size have been proven overrated, nonexistent, or in many cases, even counterproductive. One of the big challenges for the 1990s will be either to find a rationale for the very large, diversified corporation or abandon it entirely. If my father were alive, I think he would agree with me completely. And if I had it to do all over again, knowing what I know now, I would have gone into business for myself.
"When 17 of us walked out of Intel in 1983 to start Sequent, it was a much different world for entrepreneurs. We made a big splash in the press, which is testimony to how unusual it was then for a company to get started with such a broad and deep team of managers. A smart-team approach isn't so unusual today. The days of the entrepreneur doing it all alone are gone. The business of being an entrepreneur has become very sophisticated."
-- CASEY POWELL, 45, chairman/CEO, Sequent Computer Systems Inc.
FRED DELUCA
41, president, Subway Sandwiches & Salads, a franchised sandwich-shop chain with more than 2,900 units in the United States and Canada; founded company in 1965
I've watched the upstart companies, all very slick and simple, and that has led me to try and decentralize as much as possible. When you manage a lot of retail outlets, the tendency is to go in and tell people what to do. I used that style, and it didn't work very well. There was a lot of tension in the organization. I was giving the franchisees a lot of instructions; "Do these 15 things," I'd say. I would be lucky if 2 of them got done. We couldn't really move the organization.
About six years ago I was in Scotland on a trip with my family, staying at bed-and-breakfasts. At one of them, the people who ran the bed-and-breakfast also ran a farm. One night the husband -- we had hit it off pretty well -- asked if he could show me around the farm. The next morning we went out there and he started explaining all this stuff -- "I grow the grain here and the sheep are there" -- and I'm looking around and I don't see anybody working. So I said, "Who does all this?" He answered, "My brother and I." I thought about it. This guy has a lot of decisions to make: how do you know when you are supposed to take the wheat in? How do you know when it's time to shear the sheep?
So I asked him some questions. Basically, he reads, gets some information from government agents, and makes his own decisions. I realized that if this farmer were part of my franchise system, and he saw a storm coming and wanted to cut the wheat, he'd have to call headquarters and ask permission. We'd probably say, "Listen, we'll have to bring that up at the committee meeting Wednesday. We'll put it on the agenda and let you know." By then, the whole crop would be ruined.
Although I still find a lot to appreciate in focus, I no longer believe that every single Subway outlet has to be absolutely identical. There are differences in markets, and it's perfectly OK for franchisees to reflect those differences. They have to be able to make decisions. Every store has the same core menu, but the franchisees can offer local sandwiches of their own choosing, like pastrami or a peanut-butter-and-jelly sub.
It was a real internal struggle for me to give people this kind of flexibility. A franchisee would call up and say he wanted to offer turkey sandwiches. That led to a lot of discussion in committee meetings, over and over again. Finally, I sat down and said, "What the hell is so sacred about every single store having the same menu? Is it going to ruin the system because a guy slips a turkey sandwich onto the menu in Pittsburgh?"
