In training - case studies of agile companies

Chief Executive, The, Dec, 1996

LISTENING TO CUSTOMERS. LEARNING FROM EMPLOYEES. CONSTANTLY ADAPTING. WORKING WITH THE COMPETITION. JUST POPULAR NOTIONS? SIMPLY EMPTY SENTIMENTS? FOR THESE AGILE COMPANIES, THEY'RE A WAY OF LIFE.

EDS: "New White Space"

Back in the 1960s, EDS was founded on a novel idea: sell the excess computer time from one company's mainframe to another company that had data to crunch. It was a back-office kind of service, invisible and a little arcane to the vast majority of business people.

But before long, computers began to move out of the back office and into the heart of business, and EDS moved right along with them. Over the years, it kept transforming itself to provide increasingly sophisticated services, moving from time-sharing to insurance claims processing, outsourcing, and information technology services. And today, says John R. Harris, the $12 billion, Plano, TX-based company's vice president of corporate marketing and strategy, "we are transforming ourselves again - this time to provide services that help our customers improve their business performance."

The company's ability to adapt stems in part from its well-established entrepreneurial culture. But that's just one factor, says Harris. "That mindset is important. But I think agility has to be an integral part of how you operate. You don't get it by having once-a-year planning sessions. It has to be institutionalized." For example, he explains, EDS's business unit presidents are "tasked with having a continuous-by evolving business plan that is rooted in market intelligence, and always trying to find new opportunities, new white space out there. We don't want them to just do the same thing, year in and year out."

EDS has put in place a number of processes and techniques that let it leverage its two key assets, people and information, to drive innovation. "None of us individually has a monopoly on good ideas," says Harris. "But we have institutionalized a process to surface new ideas from employees at all levels within EDS. A lot of companies can identify market trends and new ideas, but too often they are unable to act on that information. That's because they lack a process for getting ideas to the surface. And I think that is something we have done well."

To tap employees' ideas, EDS set up a Value Creation Team, a group of executives that meets every six weeks to hear presentations on new ideas by people from around the company. "These may be ideas about going into new geographies or new ways to service existing customers better, or suggestions about going into an absolutely new market," says Harris. The group serves as both a filter and a sponsor, making sure that the high-potential concepts get the right attention and are directed to the right areas of the organization.

The company also takes care to ensure that new ideas and best practices are disseminated quickly among its 95,000 employees. "We're increasing our focus on learning and sharing best practices horizontally across the company," says Harris. "We think the ability to share knowledge is key. It makes us more agile because it saves us from having to reinvent the wheel every time we encounter a new situation."

Not surprisingly, EDS has an extensive network that allows employees to communicate freely, and Harris says that the role of technology will only increase as the company focuses more and more on sharing knowledge. "We've already become very aggressive users of intranet technology for sharing information, and we generally find that it is becoming easier and faster to use communications technology to link the various communities within the company."

In addition to technology, the company also relies on regular forums that bring together people from disparate parts of the company to swap ideas and insights. Also, a number of individuals are charged with "owning" certain knowledge areas. These employees learn all they can about a given subject, spread that information though the company, and gather feedback so that their store of knowledge evolves along with the company.

For EDS, the two assets of people and information come together in its relationships with customers. Typically, the company will have employees who work on site at the customer's facility. Indeed, in most outsourcing arrangements, in which EDS may run a client's data center, the EDS employees usually work side-by-side with client employees, sharing information and experience. To the casual observer, the two are indistinguishable. And in its business-performance improvement work, EDS offers what it calls Co-sourcing[SM], an arrangement in which its fees are based in part on the degree of business-performance improvement the client realizes from hiring EDS. "We are actually economically linked with the customer. We depend on their success," says Harris.

"It's very important for us to be as tightly integrated as possible with the customer," he continues. Through these close relationships, EDS essentially becomes part of the customers' process, and therefore better able to understand customers' needs, the issues they face, and the directions in which they - and consequently the marketplace - are headed.