Challenges in Replicating Business Successes
ANNOUNCER: Section 4. You will hear a lecture about success in business systems. First, you have some time to look at questions 31 to 40. Now listen carefully and answer questions 31 to 40.
SPEAKER: Good morning everyone. In the last few lectures, I've been discussing business finance, but now I'm moving on to business systems.
SPEAKER: Today I will explain what can go wrong when businesses try to copy their own successful practices.
SPEAKER: When a company successfully introduces a new process, such as managing a branch bank or selling a new product, the parent organization naturally wants to repeat that success on a larger scale.
SPEAKER: The aim is to use existing knowledge rather than creating new knowledge.
SPEAKER: This activity is less glamorous than innovation, but it actually happens much more often.
SPEAKER: However, surprisingly, getting things right the second time is not necessarily easier than the first.
SPEAKER: Many studies have examined how companies try to repeat previous successes.
SPEAKER: This research has been conducted across many industries including banks, retail stores, real estate agencies, factories, and call centres.
SPEAKER: Yet the majority of attempts to replicate success actually fail.
SPEAKER: One reason for failure is placing too much trust in experts who run the successful operation.
SPEAKER: Managers often begin by consulting an expert, such as the manager of a successful department store, and asking for advice.
SPEAKER: This can help provide a basic understanding of the system.
SPEAKER: However, even experts do not fully understand complex systems.
SPEAKER: The different parts of the system are interconnected, making it difficult to identify every detail.
SPEAKER: Experts often lack access to all the necessary information.
SPEAKER: In addition, experts may not even realize what they do not know.
SPEAKER: Some aspects of the system are invisible to managers.
SPEAKER: Other elements are learned through practical experience and are difficult to describe clearly.
SPEAKER: Some actions are performed automatically by workers without them even being aware of it.
SPEAKER: Managers also make mistakes when trying to duplicate a system.
SPEAKER: One mistake is trying to improve the system rather than simply copying it.
SPEAKER: Another mistake is combining the best elements from several systems to create a supposedly perfect model.
SPEAKER: Unfortunately, these attempts often cause serious problems.
SPEAKER: Sometimes the information used to make improvements is simply inaccurate.
SPEAKER: In other cases the business environments are not comparable.
SPEAKER: Often the advantages of changes are visible, but the disadvantages are overlooked.
SPEAKER: For example, a modification might even reduce safety.
SPEAKER: So what is the solution?
SPEAKER: The main issue is not the difficulty of the task but the attitude of managers.
SPEAKER: Managers must become more realistic and cautious.
SPEAKER: They must also apply strict controls to organizational and operational systems.
SPEAKER: This means copying the original system as closely as possible.
SPEAKER: Not only the physical structure of the organization should be duplicated.
SPEAKER: The skills and expertise of the original employees must also be reproduced.
SPEAKER: Following a clear template provides an important advantage — consistent results.
ANNOUNCER: That is the end of Section 4. You now have half a minute to check your answers.
