The engineers at Clark’s built a feature-laden, expensive facility after Alan Zakon and his team at BCG strongly recommended doing the exact opposite — building a new factory with a streamlined facility to manufacture low-cost, stripped-down forklifts to compete with rivals Toyota and Komatsu.
Zakon and his team of master strategists were trying to save Clark Equipment by handing down a data-driven, rational, and flawless plan to slash production costs.
The engineers at Clark Equipment were passionate about what they did — constantly devising the next complex “bells and whistles” for their machines. They didn’t see any utility in paring down features to slash production costs when they could offer more utilitarian features to users.
Clark’s was stuck in the middle — unable to achieve the low-cost efficiency of Toyota and Komatsu, nor the high-end technological differentiation of rivals like Hyster. It exposed the fatal flaw of top-down strategy: a mathematically perfect plan built in a boardroom is useless if it ignores the cultural reality of the people who have to execute it.
Most consultants and executives believe that handing over the strategy is enough to get the ball rolling. Far from it. What it does is create resistance, especially if the core strategy doesn’t take into account the organizational culture.
In Clark’s example, the strategists believed that implementing BCG’s rational and mathematically accurate plan was the only way to survive. They didn’t take into account the passionate engineers on the shop floor — to them, stripping off features violated their deeply ingrained identities as craftsmen and builders.
They weren’t violating the master strategy. They were simply following the inertia of their own culture and focused on building a better machine.
Zakon described it best — handing over the strategy to Clark’s engineers was like giving a caveman a ray gun.