Executive Memo: No Company Is an Island

Managing business with a different mindset

Thomas T. Stallkamp capped off a nearly 20-year career at Chrysler Corp. with stints as president of Chrysler and vice chairman of the merged DaimlerChrysler, and he is credited with helping to stabilize the company, in part by implementing supplier partnership strategies that drove improvements in both quality and cost. It's natural, then, that when Stallkamp considers cures for what ails American manufacturing, he chooses not to look inside the four walls of the corporation but to the extended enterprise and the relationships that bind a company to its supply chain partners.

Stallkamp has put forward his ideas on the collaboration imperative in a new book, SCORE!: A Better Way To Do Business — Moving From Conflict To Collaboration (Wharton School Publishing, $25.95), due out May 15, and he summed up his thesis for me in a telephone interview recently. "Our manufacturing and industrial sector seems to be weakening," he said, "and I think that's a result of the way that we manage. The book is trying to show that there is an alternative way of managing, not just supply chains but managing a corporation in total, that's based more on collaboration than what I call the 'adversarial way' that is more predominant today."

Observers might be inclined to attribute Stallkamp's views to his experiences in the automotive sector, which is not exactly known for its touchy-feely supplier-relationship practices. But Stallkamp believes that the adversarial way of doing business prevails outside auto, including in those industries that have been on life-support in the United States, like steel and the airlines, and those that dominate the economy, like retail. The problem, he says, is that too many companies see their supply and demand chains as beginning and ending at the edges of their own enterprises. Yet no company today is an island, and therefore it is shortsighted, Stallkamp argues, for an enterprise to view itself in isolation.

The biggest barrier in the way of this type of rapprochement, he says, is culture. "When companies are in crisis or industries are in crisis, people tend to revert to more negative ways, demanding things from their suppliers or their employees or their unions or even, if you will, from their customers. In fact, that's the time they really need to reach out the most. But the traditional playbook we use in management says that you ought to become really hardnosed and ruthless at the time you are in crisis."

Moreover, he continues, collaboration is not a "soft" approach to business. Rather, it's a more analytical, more measured approach, reliant on metrics, goals and targets. "If you tell someone what they're going to be measured on and then measure their performance, they can't object to making a change or doing something in a different way. It's the information that's not shared that makes the adversarial way wrong," Stallkamp says.

The shift toward a more collaborative culture must begin at the top, with companies' top executives first buying into this change, and then ensuring that everyone in their own organizations gets it, too. Stallkamp points to business cultures like those in Asian countries that he says are more deeply steeped in collaboration, and he says that U.S. enterprises must learn from collaborative models that have worked overseas. Concluding our conversation, Stallkamp said that he is "cautiously optimistic" that U.S. executives will see the light. "That's the reason I wrote the book, to show that we did something at Chrysler that was not unique but was successful, and that it takes a lot of hard work."

Do you believe that collaboration is the cure for what ails U.S. manufacturing? Feel free to send me your thoughts at [email protected]. I'll look forward to hearing from you.