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MARKETING The Tao of Tankism Sturdy. Targeted. Functional. Like the battle-tank, which is the unlikely symbol of the product-development-led management philosophy adopted by Daewoo Anchor Electronics: Tankism. By Nanda Majumdar The greatest development which the tank had
produced--more important even than its revival of the use of armour--was its ability to
move off the road...
A term coined by the think-tank at the $4.23-billion Daewoo Electronics of South Korea, it is practised at all its operations in the world, including its Indian arm, the Rs 181-crore Daewoo Anchor Electronics Ltd (DAEL). Tankism's tenets:
At one stroke, therefore, Tankism represents both an external strategy for the marketplace as well as an internal one for managing the corporation, its processes, and its people through product-development. The Organisational Tank There had been no effective comprehension of the fact
that tanks could be capable of withstanding artillery fire, and could advance 100 miles a
day... Deceptively simple though it may sound, the concept of churning out trouble-free, no-frills products aimed solely at addressing customer needs is, actually, a powerful strategy for DAEL. It enables the company to create a hierarchy of customer needs on the basis of the value they add, and then, focus only on those at the top instead of imitating its competitors and offering features because everyone else does so. And, working backwards, DAEL then builds the competencies required to serve these value dimensions. Second, by eliminating unnecessary elements from its products, the company cuts costs and, logically, prices, gaining a competitive advantage. Explains T.H. Shin, 48, CEO, DAEL: "If the core product doesn't satisfy the customer fully, there's no point in going on to the augmented product. So, Tankism is about going back to the basics." From the marketing perspective, it enables DAEL--a late entrant in virtually every product segment in every market in this country--to carve out a distinctive positioning. Says J.K. Lee, 38, Marketing Controller, DAEL: "Although Tankism was spawned in 1993 as Daewoo's competitive differentiator to catapult itself from its indifferent third position to the top of the Korean marketplace, it also aimed at organisational transformation. The best way to spark off a change movement and grab the whole organisation's interest is to start with something very tangible, very visible, and, hence, comprehensible." Can product-development be the pivot around which an entire corporation revolves? What role can, for instance, marketing, manufacturing, and human resources play in the Tankism-driven organisation? Answers Y.L. Lang, 56, President, DAEL: "Tankism works along with three central concepts: Quality, Productivity Improvement, and Continuous Cost-Innovation." And the linkages flow effortlessly, cascading across the organisation. First, product-development, aimed at meeting focused customer needs, leads straight into the usage of the principles of Total Quality Management, which demand customer-driven quality standards. These, then, pervade the entire organisation. Moreover, productivity-improvement and cost-innovation are the pillars on which the company's efforts to offer the customer the best price-benefit ratio rest. After all, lower costs always translate into lower prices. Adds Shin: "Since cost-management is an organisation-wide concept, not just limited to 1 or 2 functions, Tankism ends up driving the entire corporation." In fact, every action plan in every department is built around it. By using product-development as the crucial bridge between understanding customer needs--a vital marketing function--and its other internal processes, DAEL makes Tankism the glue that binds its different activities to each other. For instance, even the service function is focused on demonstrating to customers how they can access the benefits offered by Tankism-led product design. Confirms Shivkumar Shankar, 32, Senior Manager (Marketing), DAEL: "Our demonstrations to customers emphasise the ease-of-use and reliability features in our products." The Design Tank They had a shock on encountering the Grant tanks with
their 75-mm guns. They found themselves coming under destructive fire at too long ranges
to hit back... Applied in the design lab, Tankism compels Daewoo to use all the technological innovations at its disposal to meet the fundamental needs of its customers. Thus, it is the funnel through which R&D and technical expertise are directed at creating value for the customer. Adds Shin: "Tankism enables us to evaluate what needs to be done technically to meet the basic needs that customer-tracking throws up, combining the ideas of the marketing team with those of the Design and R&D teams." No product symbolises the application of Tankism better than the refrigerator DAEL has launched in India, whose usp is defined as the 3-D surround cooling system. For, its search for the customer's single-most fundamental demand on a refrigerator led DAEL to identify the need to keep food fresh for long periods--upto 10 or 15 days--as the goal that it would try to meet. According to user feedback, the outer limit from the existing products at that time was 4 days. Posits Lee: "One of the factors that can keep food fresh for, say, 15 days, is constant temperature. That is, if the refrigerator's top shelf is 2º C, and its bottom shelf, 6º C, then the food at the bottom is likely to get spoilt after 3-4 days. At 6-7º C, bacteria starts becoming active while it is dormant at 2º C." A quick return to the fundamentals told DAEL's R&D team that the solution lay in ensuring a constant temperature throughout the interiors of the refrigerator instead of allowing a differential between different shelves. And the optimum temperature, it calculated, was 2º C. The first phase of design work aimed at achieving this led to the creation of a multi-flow system: instead of having the same flow of cold air circulate throughout the fridge--which leads to its becoming warmer along the way--the new design involved every shelf, every tray, and every compartment receiving its own individual flow of air, which ensured uniform cooling. However, the design didn't deliver the same results when the capacity of the fridge crossed 500 litres. For that, a further refinement was needed in the form of a network of vents--12 in all--arrayed along the 3 inner walls of the refrigerator. That was essential because customer feedback revealed that the plethora of containers stacked in their refrigerators by Indian housewives, often, blocked the supply of cold air to some shelves and compartments. So, the new design ensured that no such obstacle prevented the uniform cooling process. The final improvisation, still in sync with meeting customer needs: the so-called air curtain. Responding to the user's complaints about hot air drifting in every time a refrigerator was opened, DAEL worked out a mechanism which ensures that a curtain of cold air is blown out the moment the door is opened, preventing hot air from entering. When the door is closed, the curtain cools the door cabinets, serving a double-purpose. The Innovation Tank Goliaths, the new remote-controlled, explosive-filled,
miniature tanks, were to be used to cause confusion among the defenders... Serving as it does a specific customer need, Tankism ensures that a technological ability--whether unique, or similar to that of a competitor--is not merely a feature in a product, but is converted into a benefit that specifically addresses a customer need. A classic example: DAEL's use of neuro-fuzzy technology in its refrigerators. Normally, the uniqueness of fuzzy logic chips comes from the fact that they allow machines the power to operate along a continuous scale of performance instead of a discrete one. However, many products simply tout this ability without spelling out just what advantage it offers the customer. Unlike them, DAEL uses Tankism to add value to the customer's usage of its no-frost refrigerators. Ordinary no-frost fridges work by automatically switching off the compressor for 5 minutes at 3-minute intervals. However, this prevents users from freezing anything quickly if they need to; before meal-times, for instance. So, DAEL's researchers programmed the fuzzy logic chips to monitor the specific usage-pattern of each refrigerator, and to respond by shifting the refrigerator into a rapid-cooling, non-defrost mode at those times of the day when its records showed customers opening and closing its doors several times in quick succession. Directed as it is at creating a product focused on meeting customer needs without frills, Tankism invokes every aspect of the organisation's functioning to fulfil that mandate. Thus, even as DAEL's R&D team devised technology solutions for its refrigerators, its designers studied usage patterns to change the product design accordingly. That is how, for instance, DAEL's refrigerators have acquired deeper door pockets for storing larger bottles, a larger number of eggs, and a lower freezer-to-fridge space ratio since Indian customers don't freeze as much of their food as their counterparts in other countries do--besides a lower height to facilitate usage by shorter Indians. Naturally, this makes the process of understanding the customer the starting-point of everything that DAEL does. Argues Sharat Bansal, 45, Executive Director, Coopers & Lybrand: "In one sense, Tankism isn't unlike the Japanese concept of Quality Functional Deployment, which integrates the voice of the customer in product design." Since early 1997, DAEL has been using market research to continuously track the buying behaviour, eating habits, and storage practices of the Indian consumer. Tankism will translate these insights into products designed entirely for the Indian household, some of which are slated for launch by end-1998. Can Tankism work for other corporations too? At one level, top-of-class product-development isn't the only competitive strategy available to corporates. Nor can it address every one of the needs of an organisation. For instance, Tankism can, at best, tell a corporation the competencies it needs to build without really contributing to their development. Moreover, much of the marketing edge of a company's product strategy no longer comes from the core product today. Argues S.K. Palekar, 47, Director (Marketing), Mirc Electronics: "Core product-development can face technological limitations. But there are no boundaries to the marketing imagination which, essentially, guides the augmented product." Obviously, an awareness of the limits of the benefits that Tankism can deliver is essential. But the second level of benefits the concept offers is by customising and branding a management concept to inculcate a company-wide identification with it. As Coopers & Lybrand's Bansal puts it: "Management ideas tend to exist as distant jargon. But if they are given an identity and larger ownership within, they can become a powerful motivational and cohesive tool." If Daewoo grows into the next Sony, Tankism will have scored its biggest hit. |
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It's an idea that is bang on target. Focused on the
customer. Leading back into the organisation to touch every function, every department,
every manager. And enabling the vision and the mission statements, the goals and the
strategies, the targets and the processes to be bound to one another. Integrating
organisational goals with the tiny stream of tasks accomplished every day across the
company--on the shopfloor, in the conference-rooms, on the design-tables--a unique
philosophy is transforming (at least) one of the world's mega-corporations. It goes by the
unlikely name of Tankism 