ABSTRACTS

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ies of every customer invoice, so the manufac- turer can track sales to their ultimate use. Training. The essence of distributor training is formal and continuing. Three-week opening sessions on the usual business and technical matters are followed up by detailed sales man- uals, sales action plans, advanced training ses- sions, and other techniques. They believe that “the knowledgeable salesperson exudes confi- dence which begets customers’ trust and loy- alty.” Technical workshops for end users. Pall has developed a cadre of people, usually with technical backgrounds, who are not in sales and not in laboratory research, for presenting technical seminars and workshops for cus- tomers. These people, often in addition to their regular jobs, become recognized experts in their chosen fields. Every marketing man- ager, for example, must present at least one such seminar. Complementary lines. This is approved, and welcomed. Other products help reduce distrib- utors’ costs and add to their profits, as well as increase customer service. Competing products. These are not allowed. Period. Evaluating distributors. This type of evalua- tion is comprehensive, and involves the usual sales and profits, but it is meant to be con- structive and useful for the distributor, and of- ten turns on non-quantitative factors such as the goodness of feeling one has towards Pall and its products. Avoiding pitfalls on new products. Most of the policies just discussed contribute directly to new product success, but there are special matters. First, the firm makes sure that the new item does indeed meet the requirements in the marketing brief that began the process. This includes product characteristics and per- formance; if the product is not ready it will not be marketed. Not only is product failure very expensive to Pall, but distributors have long memories.

Second, the manufacturing department must have a 3-month inventory on hand, and clear ca- pability of making the first 12-month sales fore- cast.

Third, provision is made for customers to test

J PROD INNOV MANAG 147 1991;8:138-152

the new item. Pall is assured that a new item works (above), but they realize that distributors’ customers will want to prove it themselves. So the marketing manager provides prototype prod- uct for exhaustive testing at point of use.

Fourth, the management recognizes that dis- tributors also want to be convinced. They want to know how the filter behaves “when Pall people are not around.”

Fifth, distributors are backed by a heavy and sustained program of communications during launch. They need to know how the product works, why it was developed, how much profit they can make on it, what its selling requires, and so on. They must have adequate inventories, and they must be backed by every support possible. It is team selling at its best.

The Employee Empowerment Era, Jeffrey Gandz, Business Quarterly (Autumn 1990), pp. 74-79

For some time now we have been hearing about a new culture developing for the product innova- tion function. New organizations, networking, etc. One dimension of this new culture is empow- erment of people working at the action points, and this article tells us about the concept and how it can be implemented.

The forces driving us to empowerment are many. Some are not new, since some firms preached empowerment in the 1950s and 1960s. But today the emphasis is not so much on making employees’ lives more pleasant, but making them more productive. The globalization of business is a factor, since the complexity of today’s opera- tions makes local action more critical.

But we find we also need speed, speed of deci- sion and action. If a new product is needed, the authority must increasingly be vested in people closest to the customer’s problem. And firms are finding that profitable innovation is often a stream of micro-innovation rather than sporadic leaps. Continuous improvements are almost always best left in the hands of people well down the line.

Increased competition is putting new stress on productivity, which calls for better educated em- ployees, dedicated to productivity, and not hin- dered by bureaucratic layers and controls. Lastly, the 1990s will have severe demographi- cally-related shortages of people with certain

148 J PROD INNOV MANAG lWl;X:138-152

skills. The people we find will increasingly de- mand jobs that are empowered.

Empowerment “means that management vests decision-making or approval authority in employ- ees where traditionally such authority was a man- agerial prerogative. ’ ’ Empowered clerks decide on the discounts that will be allowed, empowered employees approve their own expense accounts, empowered assembly line operators can pull the lever and stop the line when they think neces- sary.

There are certain conditions required for em- powerment. First, employees must be properly trained-they must be able to take the actions they will be permitted. Second, there need to be shared visions-company goals such as “best customer service firm in the industry.” Third, there should be shared values-beliefs about standards of behavior. Fourth, the beneJits ofem- powerment should be shared with the employee who now is making decisions, and such sharing should be fast, certain, and publicized. There will be more bonuses and stock payments, not promo- tions to higher salary grades. Fifth, managers of course need to have faith in the employees to be empowered, not frightened and unwilling to take the risks involved. Middle managers must accept a new role as visionaries, coaches and rewarders, and they should now be evaluated and rewarded by how much empowerment has been put into place. Senior level managers should take the lead and publicize empowerment decisions such as re- ducing approval levels and collapsing job catego- ries. Sixth, the author feels that empowerment can only work when the top management accepts it and commits to it wholeheartedly. The culture must usually be changed. Among other things, this calls for the removal of barriers that create distinctions between employees based on status, education, and professional association. Particu- larly cited for elimination are distinctions that are deliberately selected for their visibility (e.g., spe- cial parking places and separate classes of tra- vel).

Other general changes that outline the new cul- ture include the constant asking of “How may this operation be improved?” Another is adopt- ing the response, “Just do it!”

Empowerment does not happen when a CEO announces that it will take place starting next Monday. The laboratory scientist, the market re-

ABSTRACTS

searcher, the new products manager-they all have memories of what happened the last time they took it upon their shoulders to make a deci- sion that had to be made fast, or forgot to get an approval from some staff department. They will make empowerment effective only when they are sure it is for real and that management under- stands just what it means.

Prelaunch Forecasting of New Automobiles, Glen L. Urban, John R. Hauser, and John H. Roberts, Management Science (April 1990), pp. 401-421.

This is a long and technical article that offers its full value only to those who are trained to under- stand it. However, there is value for all new prod- uct managers developing durable goods, and this abstract will concentrate on those aspects of the article.

The report is of an attempt to model the 4-year forecasted sales of a new Buick automobile. First, the authors had to get a good understanding of the automobile industry, as a basis for the modeling. They identified several key character- istics:

Automobile buyers visit showrooms and take test drives.

Word-of-mouth communication and maga- zine reviews are important.

Most sales are made “off the lot” so avail- ability is important.

Production of cars is such that no test market is practical.

Most new cars are replacements for present models, not new ones.

Production constraints hurt, since facilities need to be decided before sales forecasts can be made with any accuracy.

Prices may not be as planned, given the ease and effectiveness of changing them.

The group was able to build its model on exten- sive efforts by automobile new products people