[The following news item appears in the April 1995 edition of
_Quality_Progress_, page 18.]

      REGENERATION, NOT DOWNSIZING, IS THE KEY TO SUCCESS

     Business executives worldwide have indicated that their top
challenge in this decade is transformation, and they recognize
that this transformation goes well beyond downsizing or
reengineering. According to a study sponsored by Gemini
Consulting, to succeed in an increasingly complex and competitive
marketplace, business leaders are creating regenerative
organizations that address a spectrum of issues simultaneously
and develop people who are transformational leaders.
     "Champions of Change: A Global Report on Leading Business
Transformation," a study that linked leadership capabilities and
organizational effectiveness, analyzed responses from more than
1,450 managers and executives from 12 global corporations.
     The study indicated that in contrast to the 1980s, when
businesses were internally focused and their emphasis was on
downsizing, quality, and customer service, today's companies are
focused on multidimensional growth by being organized around
customer requirements and being flexible enough to meet new
market conditions.

     Major findings from the study include:

     * Transformation is a regenerative process, not a one-time
     event. Nearly 60% of respondents said their  businesses'
     competitive environments are in the midst of transformation.
     Just 10% of the respondents thought their businesses were in
     a stable competitive environment. 
     
     * Operational excellence is no longer a source of
     sustainable competitive advantage. Choosing from a list of
     34 different corporate capabilities, nearly half of the
     managers said organizing their firms around customers'
     requirements was key to success, and 41% cited being
     flexible to meet new competitive conditions. Quality and
     customer service were noted by 30% of the respondents as
     critical to their businesses' success. Douglas A. Ready, who
     conducted the study, said quality and service attributes
     remain important, but they are "assumed capabilities" in
     today's marketplace. "The prominence of customer-oriented
     characteristics marks a shift from the operational issues of
     the 1980s to the outward focus necessary for success today,"
     added Ready, who is executive director of the International
     Consortium for Executive Development.
     
     * Businesses are not prepared for the future. The study
     found that critical gaps in performance, trust, and
     effectiveness exist between top management and the rest of
     the organization. Senior executives' perceptions of
     organizational performance excellence in almost every key
     capability area, including customer focus and flexibility,
     were more positive than mid-level managers' perceptions.
     
     * The new leadership challenge is to engage the entire
     organization in continuous regeneration. When asked what is
     the most important capability an effective leader will need
     over the next three years, visioning was mentioned by 32% of
     the respondents, followed by facilitating empowerment (27%),
     leading change (27%), producing results (25%), and customer
     focus (24%).
     
     * Businesses are less globally minded that what might have
     been expected. While the study's respondents included 12
     global companies, just one listed global capabilities among
     the top 10 of the 34 capabilities offered. There were two
     exceptions: Asian managers listed "having a global mind-set"
     among their top five leadership competencies, and mid-level
     managers rated that dimension as a more important
     consideration than did senior managers.
     
     For more information on the study, call Ready at (617)
862-6633 or fax (617) 862-6211.