Wednesday, March 23, 2011

Strategic Development using decentralization - US Air Force

While trying to learn the importance for strategy development I read the article reinventing your business model. The article discusses the importance of change to maintain a thriving business. It discusses the attributes of a successful business model and how to identify if a new model is needed.

This article reminded me of the case “four star management” by Jay Finegan which highlights the most dramatic change of its time which happened in US Air Force.

The case starts with discussing the problems that existed within the Tactical Air Command like lack of proper equipment, lack of proper training or flight hours and a sense of dissatisfaction within the organization. In 1978 general Creech was appointed as the new commander in hopes of bringing upon a change who reinvented the existing model to overcome these problems. General Creech first identified the current model and the problems associated with it. The current model worked on a structure in which the senior sergeants sat in comfortable offices whereas inexperienced lowest rank people were sent for routine calls for maintenance. Due to this very few planes were repaired and pilots were lacking flight time. The model was centric where specialists only loosely worked for the person in charge of getting the job done. Creech’s strategy was to divide the centralized structure into smaller manageable units. This change was met with a lot of opposition by senior sargeants. But this strategy created a sense of belonging and a competitive feeling among different units to perform better and better. Instead of keeping a big goal in front of the people smaller goals were asked to achieve with incentives attached to it. This being Air Force, incentives were in the form of leaves which thrilled the sargeants. Creech also broke up the warehouse system and moved the aircrapt parts from the storage areas to flight line. He ordered the best quality supplies for his people applying the theory “ quality begets quality”. By applying the decentralization and few other changes in the model Creech was able to achieve great success for the Tactical Air Command.

The major factors that led to the grand succes of TAC was change in the basic business model by applying decentralization and creating leaders at every level.

Questions to the readers:

Can we apply such strategies to improve the performance of other government corporations today?

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