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The Huntmaster's Solution

Jim Swartz, physicist-turned-novelist, issues a call for transformation- with help from a guy named "Lou"

By John H. Sheridan, Senior Editor

FOR CENTURIES, PHYSICISTS HAVE PURSUED A COMMON MISSION: UNRAVELING THE MYSTERIES-AND THE LAWS-OF THE PHYSICAL UNIVERSE. Almost instinctively, when their research reveals a glimpse of an immutable truth, they create a mathematical model to capture if for posterity. Jim Swartz started out as a physicist-which may explain his penchant for using models and schematic diagrams to illustrate the discoveries he's made in his quest to understand the principles of manufacturing competitiveness and business process design.

But it doesn't explain why he chose to share his findings by writing a novel. Perhaps he saw it as a way to breathe life into what otherwise might have been another mind numbing treatise on business systems and strategy. Or maybe he just thought it was time to introduce America to a guy named "Lou."

Lou is the hero of Mr. Swartz' new book, The Hunters and The Hunted: A Non-Linear Solution for American Business (Productivity Press). It's a novel that takes readers on an excursion through history to discover and understand the great lessons of competitiveness-lessons that apply not only to manufacturing, but other businesses as well. Lou is a skeptic, a hardhead who's not inclined to quickly accept new concepts, especially when they challenge long held "mental models" of the way things are-or should be. In that sense, he's a lot like many business executives who have been slow to grasp the new realities of a fast-changing, increasingly competitive world.

But you can't help liking Lou. Despite a gruff exterior shell, deep down he's a softie. On the job, as manager of a steel mill, he's conscientious and hardworking. He puts up with long, stressful workdays because he takes pride in his work.

And he dies on Page 4.

That's right. Just as you're getting to know him, the hero drops dead of a heart attack.

BUT THAT'S NOT THE END OF LOU. JIM SWARTZ ISN'T THE kind of guy who'd create a hero and then do him in permanently with a few finger taps on a keyboard. He brings Lou back-sort of reincarnated- as a trainee in a program that develops "Guardians" whose mission is to help American companies transform themselves to meet the global challenge... to become "the hunters" rather than "the hunted."

The premise may seem a bit far-fetched. But it creates a framework that allows Lou (and the reader) to quickly traverse time and geography in pursuit of great principles.

What may be surprising is that very little of the stuff is really new. Most of the concepts have been around for decades-even centuries, in some cases. But somewhere along the way, many were dismissed or ignored by business leaders.

"I think we forgot that there are fundamental principles for the design of systems to produce products and services. I call them value delivery systems," says Mr. Swartz, who operates Competitive Action Inc., a one-man consulting firm based in Kokomo, Ind. "It is important to understand that a delivery system is not the same as the organization. The organization is a reporting and decision-making hierarchy. And on of the problems in this country is that, over the years, we haven't recognized the importance of the delivery system as much as we have the hierarchy."

In researching his book, Mr. Swartz traced the origins of many of the precepts he'd encountered during a career in manufacturing. If you thought Henry Ford invented the large-scale assembly line, you're wrong. Back in the 1500's, the Venice shipbuilding arsenal used standardized components and an assembly-line approach to quickly increase the size of the Venetian Navy in times of war, Mr. Swartz points out. And if you thought Dr. W. Edwards Deming and Dr. Joseph Juran gave birth to statistical process control, you're wrong again. It originated with Walter Shewart, who pioneered the concept at Western Electric Co.'s Hawthorne plant in 1924.

The Hunters and The Hunted is full of history lessons, many of them taken from more recent times-and from Jim Swartz' extensive experience in helping companies stage turnarounds. His methods, not surprisingly, are similar to those used by the corps of Guardians that Lou is training for-under the tutelage of a Master Guardian named Marcus.

"Lou is a little bit like me in some ways," Mr. Swartz admits. "But I'm not Lou. he is a fictional character." One thing the author and his chief protagonist have in common is steel-making. "I started working in a steel mill at age 16-at Republic Steel in Canton, Ohio, " he notes. "I knew lots of Lous."

After earning his degree in physics, Mr. Swartz spent 25 years with General Motors' Delco Electronics Div. as a product designer, engineering manager, and plant manager. He left GM in 1986 to devote full time to Cygnus Systems, a company he'd formed 12 years earlier. And in 1988 he established Competitive Action Inc. "I don't call myself a consultant," he says. "I'm a teacher and facilitator, I teach people how to go about redesigning their businesses."

To executives familiar with Eli Goldratt's popular manufacturing novel, The Goal, Lou and Marcus will stir recollections of plant manager Alex Rogo and his mysterious mentor, Jonah. But while The Goal was fiction, The Hunters is an unusual blend of fiction and nonfiction. Many of the characters, companies, and situations in the book are real. And much of the dialogue is drawn from conversations that actually took place.

During his indoctrination program, Lou and his training partner Laura are introduced to such people as: Taiichi Ohno at Toyota; Den Stork, Keki Bhote, and Lee Craft of Motorola; Dr. Robert W. Hall of the Assn. for Manufacturing Excellence; Richard Teerlink and Vaughn Beals at Harley-Davidson; and Harold Faig at Cincinnati Milacron. They and many others play a role in the education of Lou and Laura to prepare them for their rite of passage. To become full-fledged Guardians, they must help another real-life executive, Wil Danesi, rescue a troubled foundry owned by Allied-Signal Aerospace Co.'s Garrett Processing Div.

What he's talking about is redesigning-or reengineering, if you will-the "value delivery system," which is the essence of any business. A business makes money and creates jobs by delivering value to customers. And companies that want to stay in business and capture markets must learn how to continuously redesign their delivery systems, he argues. Otherwise they will fall prey to competitors who do learn-the hunters.

Mr. Swartz emphasizes that most continuous-improvement efforts produce modest linear, or incremental, changes. But they don't transform the business in truly significant ways. "What we need in this country," he tells IW, "is a systematic approach to producing not only continuous improvement, but dramatic nonlinear jumps... as much as 100-to-1 improvements in quality and cycle time. And we're not talking about doing it over two years. We're talking about doing it in two months."

One significant difference is that linear change is more likely to experience what physicists call "entropy"-a tendency to revert to the former state. "But nonlinear change is basically irreversible," Mr. Swartz says. "The reason is that something happens in the mind; there is a new mindset, a new mental model, a new set of measures. And once those are etched into the brain, it is difficult to go back.

"The more nonlinear the change, the more irreversible it is. And that is why it is such a concern to top management. They recognize that there is no way back, that they are burning their bridges. But they have to understand that their bridges are probably burning anyway."

In The Hunters, Mr. Swartz points out that a systematic approach to business transformation-or redesign of delivery systems-requires five things:

1. Recognition of the interdependent relationship of strategic capability and delivery-system design.

2. The flexibility to develop new mindsets, mental models, and measures.

3. A thorough understanding of the "process intent"-the strategic objectives of the delivery system.

4. Ability to deploy a "process model" that matches the intent.

5. Installation of systems that maximize the rate and quality of learning and improvement.

Companies that have discovered the "Non-Linear Solution," he notes, continuously compare their performance not only to that of the world's best-but to "the ultimate possible performance." Moreover, they strive for the ultimate. "They continuously revise their mindsets, mental models, and measures. [And they] continuously drive nonlinear redesign for their delivery systems to be the most competitive in the marketplace.

In theory, it sound like a gangbusters formula. But, in practice, it's not so easy to implement. For one thing, it requires a willingness to adopt new ways of thinking. Throughout his training program, Lou is forced to reassess his mental models until he gradually sees the light. Near the end, he admits: "We're our own worst enemies-most of our problems are right above our shoulders."

To which his partner Laura replies: "We must transform ourselves before we can transform anyone or anything else."

That, says Jim Swartz, is the real secret to becoming a hunter.