In response to a comment by Bill Stepp to this posting:
http://www.marginalrevolution.com/marginalrevolution/2005/09/the_public_choi.html
about relief efforts in New Orleans. Mr. Stepp points out that Wal-Mart was able to put together a convoy of trucks with supplies while, he claims, the government run efforts were floundering.
Why was Wal-Mart able to quickly put together a convoy of aid for Hurricane Katrina victims in New Orleans? Lets think about what Wal-Mart does: they sell stuff in stores over a broad geography. To sell stuff they have to have stuff. So Wal-Mart has built a very large logistics organization with thousands of trucks and many distribution centers. They move stuff every day. Lots of stuff. So it is not in the least surprising that Wal-Mart was able to put this aid together quickly.
But lets dig a little deeper.
Wal-Mart is in a very low margin part of the marketplace. So they must continuously monitor their expenses. This provides a test that the logistics group must meet: they must move the stuff where it needs to go with minimal cost. The market provides a powerful test of Wal-Mart's cost efficiency. The Wal-Mart leadership obviously understands that logistics is critical to making money. So the logistics group is under intense pressure to keep the costs low and still move the stuff. We can presume the logistics group is tracking their expenses and their performance and refining their processes.
Now, where else do we see such behavior?
The US military is world class at it's primary job: destroying other militaries. They train and train, practice war games, test themselves against every situation they can devise. The war colleges pour over history to find lessons to apply to the current military. Periodically they even get to use there skills. All this provides an excellent test of their ability to perform their job. (recall that the destruction of the Iraqi military in the current war in Iraq went better than expected)
Kind of like Wal-Mart's logistics team.
Another example: it is commonly said that the best place to get any particular surgery done is the hospital which does that procedure the most. Surgical teams at such hospitals get to practice and practice and have an excellent test to measure their performance. So they are the best at that procedure.
A common bromide among engineers: you can only control what you can measure.
So what do these examples suggest? Any organization can excel given a good test of their effectiveness and leadership which cares to ensure they are effective.
Further, anything can provide the test. The much lauded marketplace provides tests for many organizations. Others find other ways to test themselves.
There is nothing magical about the marketplace.
