Fernando Flores LO13820

thomas petzinger (tompetz@msn.com)
Mon, 2 Jun 97 16:41:53 UT

Dear org learners:

I devoted my last two WSJ columns to the work of Fernando Flores--an
introduction to his life and philosophy followed by a peek inside one of
his consulting engagements. These are excruciatingly short and cursory
pieces, but they may be of interest to someone seeking an introduction to
Flores. Also, my initial acquaintance with Flores's ideas occurred through
this list, so I thought I'd share the results of my travels to Chile.

With Rick's blessing I have posted the columns below.

Tom Petzinger

Thomas Petzinger Jr.
new e-mail address: tompetz@msn.com
"The Front Lines"--Every Friday in The Wall Street Journal

"The arms of consciousness reach out and grope, and the longer they are, the
better. Tentacles, not wings, are Apollo's natural members." --Vladimir

Fernando Flores Says
Entrepreneurs Are
New World Leaders
By Thomas Petzinger Jr.
The Wall Street Journal

(Copyright (c) 1997, Dow Jones & Company, Inc.)
SANTIAGO, CHILE -- I FIRST HEARD the name Fernando Flores when I was
writing six months ago about the dramatic operating turnaround at
Cementos Mexicanos, the biggest cement company in Mexico. Although I
didn't say so in print, the Cemex people spoke reverentially of the
Chilean consultant.
Before I had the chance to check out the guy, I received an e-mail
from a former top Air Force general. He mentioned he had been deeply
influenced by a philosopher, business consultant and onetime political
prisoner named Fernando Flores. How often do you see those descriptions
on the same resume?
About that time -- don't ask why -- I was searching the Web for
information about human cognition; "Fernando Flores" popped up
everywhere. The punchline hit me when I came across something on the
Internet in which he declared, "Cyberspace will become the principal
medium for inventing our public identities."
You don't say.
Precisely who is Fernando Flores? He is an imposing man -- picture
Sidney Greenstreet -- with some fascinating ideas about computing and
captitalism. "I have the best theory of business process in the world,"
he told me. And whether the claim is true or not, few business
consultants can match the intellectual journey behind it.
Trained as an engineer, at age 28 he became finance minister in the
Marxist regime of Salvador Allende in 1970. At a time when computers
were mostly stand-alone number-crunchers, he helped develop a radical
plan to link far-flung factories into a single data network -- a project
called Cybersyn (back when the prefix "cyber" meant "control").
THEN, IN 1973, the military seized the presidential palace. President
Allende lost his life. Mr. Flores was jailed. Cybersyn went nowhere, and
Mr. Flores spent three years in prison brooding over the notion of
computers for communication rather than computation. "I wanted to be a
force in that," he says today.
When Amnesty International and others won his release in 1976, he
exiled himself (with five kids in tow) to Stanford University. His wife,
Gloria, wrapped airline sandwiches for Marriott. His teenage children
pitched in their Burger King wages. And Mr. Flores threw himself into
doctoral studies intent on investigating communication at the most
fundamental level: by asking what it means to be human.
From the German philosopher Martin Heidegger he learned that
existence arises from interaction. Studying the theory of "speech acts,"
he realized that language always conveys not merely information but
commitment. And soon a light bulb went off: "A human society," as he
puts it, "operates through the expression of requests and promises."
A business, likewise, is a collection of simultaneous conversations,
and every conversation involves an act of commitment. ("Can you do
this?" "I will pay that amount.") In this "network of commitments,"
everyone is a customer, a provider, or both at once. Thus, where
computers are concerned, "You should not track information, you should
track commitments."
Working with the computer scientist Terry Winograd, he created a
product to transform computer workstations from solitary appliances into
devices for tracking commitments between workers. The system, called the
Coordinator, ushered in a generation of collaboration programs known as
work-flow tools, or "groupware." Some users found the system dogmatic,
but its success left Dr. Flores fixed for life.
To further commercialize his theory of business process, he launched
a consulting practice called Business Design Associates, based in
Alameda, Calif. Although it conducts no marketing, BDA in seven years
has reached nearly $30 million in annual billings. (You'll read about
BDA's methods in next Friday's column.)
IF DR. FLORES becomes famous for anything, it may be for a concept of
entrepreneurialism he has described in a forthcoming book from MIT Press
called "Disclosing New Worlds," co-authored with the philosophers
Charles Spinosa and Hubert Dreyfus. In a time of vapid values and
insipid politics, they say entrepreneurs are becoming the leaders of the
world. While the typical capitalist merely forecasts human needs, they
argue, "the entrepreneur is the person who determines which needs will
seem important."
Dr. Flores says he hopes for nothing less than entrepreneurs one day
"overcoming the classical distinction between left and right that has
dominated the world since the French Revolution."
True entrepreneurs, he says, aren't motivated solely or even
principally by money. Profit is essential, of course -- even a onetime
Marxist can see that -- but generating a return on capital is no more
the objective of business than having competent employees or loyal
customers. "We compete to make things, and ourselves, more worthy," the
book says. Profit is but a step in a process by which entrepreneurs
attain identities.
Dr. Flores is convinced those identities, corporate or personal, will
increasingly take shape in the on-line world (which, after all, is where
I encountered him). But identities, he says, must be grounded -- in
history, in personal style and, of course, in commitments. "You need to
be settled in something," he says. "You are not infinite."
Next week: inside a consulting gig with a Flores associate.

For This Chilean Firm,
Commitment Is What
Creates Real Change
By Thomas Petzinger Jr.
The Wall Street Journal

(Copyright (c) 1997, Dow Jones & Company, Inc.)
SANTIAGO, CHILE -- THE FUTURE of telecommunications has already
arrived here. Satellite services abound. Internet use is soaring. Kiosks
in the financial district are outfitted with video connections. Names
like Bell Atlantic, Motorola, Southwestern Bell and a host of European
brands are seen everywhere.
In the middle of this melee sits former state telephone monopoly,
Cia. de Telecomunicaciones de Chile, slouching toward rebirth with
disaffected customers and cynical employees. For some time, CTC has been
designing new information systems, but nothing really changed. "The
weight of the traditional culture is pretty heavy," says General
Secretary Julian Garcia.
In recent weeks, however, an insurrection has erupted. Repair
technicians are responding to calls in minutes instead of days. Capacity
planners have found new uses for existing lines. Strangers from farflung
departments are brainstorming over new products. The rallying cry of the
revolution: compromiso. Translation: commitment.
The concept of commitment, plus a few other elegantly simple
principles, have been introduced here by Business Design Associates,
whose founder, Fernando Flores, I profiled last week. Although Dr.
Flores has personally handled much of this engagement, the day-to-day
work is largely led by a staffer named Kenneth Massey. A Spanish-fluent
gringo, Dr. Massey has become a bit of a cult figure in the company.
"The language Ken uses is very normal; there are no buzzwords," says
Santiago Quer, a finance official from the CTC cellular division. "But
with this very common language, he has something deep to say."
Dr. Massey has two qualifications for helping vulnerable companies
learn to compete. One is survival experience. During his boyhood in the
grimy coal fields of Carbon County, Utah, a big retailing chain spent
years attempting to run his family's five-and-dime out of business. "I
grew up with people trying to do me in," he says.
HIS OTHER qualification comes from a depressing realization after 15
years of academia. As a professor and humanities dean at the University
of Monterrey, Mexico, he was noted for his glib lectures. But when
former students came back to visit, he could tell they had retained
almost nothing; he had imparted facts instead of learning ability. That
lesson now shapes everything he does. Consultants should introduce
concepts, he says, but clients should do the thinking.
If BDA has a secret formula, it is this: teaching people to combine
hard-nosed re-engineering efforts with deeply personal change. Meeting
with small groups, Dr. Massey and his associates tell employees that CTC
is nothing but the sum of the conversations under way within it. Listen
intently to the concerns of everyone around you, customers and
colleagues alike, he says. Then, act on those concerns with commitment
-- by keeping your word. Role-playing exercises demonstrate how the
fulfillment of commitment builds trust and creates efficiencies on a
scale people could never imagine.
Conversations. Concerns. Commitments. Stating the obvious, you say?
Absolutely, but it's amazing how seldom the obvious is observed. Someone
reneges on a deadline, causing a chain of broken promises. Bureaucracy
trumps sensibility. Alba Lopez, a back-office supervisor here, spent 26
years going by the book: "You didn't do something if you didn't have the
procedure." But now, she says, "people are getting into commitments
whether there are procedures or not."
The technical work of changing the company's "hardware" -- its
processes and procedures -- becomes incalculably easier with this kind
of software running. Middle managers and front-line workers, long
patronized or ignored, now volunteer for the extra work of serving on a
change team. Top executives have vowed that those re-engineered out of
their jobs will continue to work creating new products; as a result, the
unions have thrown themselves into the process. Staff analyst Rosario
Contreras watched in amazement as CTC's top technocrats sat attentively
through a presentation by repair people in steel-toed boots. "They owned
that meeting," she recalls.
AND EVERYTHING is fair game for change. "What is your plan?" people
ask Dr. Massey. "There is no plan," he answers, except listening for and
acting on clues about making CTC more competitive. Enrico Gatti, the
intense, chain-smoking chief of operations, explains the process this
way: Upper management defines the corporate vision, while leaving
execution to "the impulse and efforts in the lower parts of the
Employee task forces have targeted six major areas for change. One
involves combining three unconnected operations -- installation, repair
and complaints -- into a single "customer satisfaction" department. As
the task force toils over the intricacies of databases and logistics, a
group of repair workers has already taken the radical step of scheduling
service calls precisely when customers require. "Everyone is bored with
having customers mad at the company," explains Juan Aqueveque, a line
technician here.
It's way too early to proclaim success here, but the odds are better
than usual. CTC is changing entirely from within, despite the outsiders'
presence. It's like the proverb about teaching the hungry to fish
instead of giving them a fish. "Let's not dump in ideas," Dr. Massey
says. "Let's help them have new conversations."


"thomas petzinger" <tompetz@msn.com>

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