October, 1997 - Vol. 2, No. 1

Enduring Partnerships Instead of Impersonal Contracts

Joint ventures, outsourcing, and other ways of cooperating to compete are on the rise, and the leadership qualities for getting the job are changing as a result. Traditional skills around sending work downward are being replaced by talents for arranging work outward. This is evident in a depth study of the Chrysler Corporation and its supplier management by Wharton professor Jeffrey Dyer. He finds that an essential element is viewing relationships with other companies as enduring partnerships rather than arm-length contracts. His study of the Chrysler experience also reveals that the organization must change on the inside if partnerships are to work on the outside. Dyer reports that

1. Chrysler built internal cross-functional coordination before it
   could establish good working relations with its outside suppliers.
2. The company also altered the way it selected suppliers, looking for partners with which it could work for mutual gain over an extended period rather than from which it could extract lower cost in the near term.
3. With the trust-based supplier partnerships in place, Chrysler has realized significant reductions in both the time required to bring new vehicles to market and the cost of doing so.

Source: Jeffrey H. Dyer (dyer@wharton.upenn.edu), "Improving Performance by Transforming Arms-Length Relationships to Supplier Partnerships: The Chrysler Case," Organizational Science, forthcoming, 1998

Avoiding Decision Trapss

Edward Russo and Paul Schoemaker warn us about ten barriers that prevent and undermine effective decisions. Among the common obstacles are:

• Overconfidence -- being too sure of your own assumptions.
• Frame blindness -- setting out to solve the wrong problem.
• Group failure -- mis-guiding a team?s decision process.

If leadership is in part the exercise of good judgment, Russo and Schoemaker offer advice for bolstering your leadership potential:

• Overconfidence -- ask disconfirming questions.
• Frame blindness -- build a thinking logic that focuses on key issues.
• Group failure -- press for dissenting views before closure.

Source: J. Edward Russo and Paul J. H. Schoemaker, Decisions Traps (New York: Simon & Schuster, 1989).

Companies and Globalization

Wharton Executive Education is offering -- in collaboration with Japan's International Centre for the Study of East Asian Development -- a three-day course that draws on the recent experience of U.S. companies in designing strategy, organization, and leadership for competing in a global environment. Entitled "Corporate Strategy and Management in an Era of Globalization," the open-enrollment course is offered on January 8-10, 1998, in Kitakyushu, Japan. Information on the program is available from Executive Education's representative in Japan, Yumi Wakayama at <wakayama@gol.com>.

Leadership Development Program: Sprint Corporation

With 48,000 employees and $14 billion in yearly revenue, Sprint Corporation is building its leadership for the future through a formalized development effort. The Sprint Staff Associate Program annually selects outstanding MBA graduates with executive potential for three years of intensive management and leadership development through:

1. cross-functional assignments selected by the Staff Associates to meet individual interests and development needs
2. tailored individual development plans
3. mentoring by senior officers
4. development support from full-time Staff Associate Program managers and teams of directors and vice presidents selected by the Staff Associates
5. quarterly performance reviews
6. 360-degree feedback and assessment

Successful Staff Associates are expected to be ready for director-level positions within three years. Information about the program is available from Campus Manager, Dr. Rudy Papenfuhs at <Rudy.Papenfuhs@mail.sprint.com>.

How do you become a leader?

"Be yourself. Figure out what you're good at. Hire only good people who care. Treat them just the way you want to be treated. Switch from macho to maestro. Identify your one or two key objectives and directions. Ask your co-workers how to get there. Listen hard. Get out of their way. Cheer them. Count the gains. Start right now."

Source: Warren Bennis, author, consultant, and former university president, profiled in "Where Leaders Come From," Fortune, September 19, 1994, pp. 241-42.