AFCO Systems transformed from a sheet metal manufacturer to a provider of data-center solutions in a few decades, in part by operationalizing learning.
AFCO Systems Inc. — a leading provider of intelligent metal enclosures for information technology equipment collocated in commercial data-center environments — has been on a journey since it started operations in the early 1970s as Ultimate Precision Inc. (UP). Organizational changes resulted in exponential revenue and profit growth during the late 1990s through the present time.
AFCO has evolved during the past few decades from in its initial formation as a sheet metal manufacturer. Its successful transformation to a leading provider of intelligent enclosures for information technology equipment has embodied strong organizational culture dimensions, iterative learning techniques, effective visionary objectives and a socially cooperative working environment.
Recent research — covering leadership, learning, organizational culture and functional maturity in entrepreneurial businesses — found this successful transformation was directly attributable to clarity of vision, iterative learning practices, strong organizational values and a cohesive team. Specifically, the research revealed organizational learning was a significant contributor to AFCO’s successful transformation.
Iterative Learning Dimensions
Recognition of external market opportunities coupled with continuous process improvement initiatives fostered iterative learning in the organization. The transformation at AFCO realistically began when the organizational visionary — the CEO and son of one of the company’s original founders — translated an external market opportunity into a clear and concise vision for the organization.
When all AFCO employees were exposed to external customer needs and encouraged to develop creative solutions, their interest in learning new ways of operating was stimulated.
Given the customer focus instilled by the founders and perpetuated throughout the organization, AFCO was able to grasp the CEO’s vision and operationalize it. The ability to operationalize learning was supported by a cooperative working environment in which the ends and the means were compatible. In many cases, continuous-improvement initiatives were directed at a single function or process without consideration of the impact to external customers.
With a whole-systems approach, the organization began to think of internal goals and external objectives from a win-win perspective. Because the external environment continually feeds new requirements and opportunities back into the organization, learning is generative and ongoing. AFCO is able to realize substantive transformational change based on these iterative learning dimensions. As a relatively small organization, the management team is chartered with implementing learning initiatives to energize and engage the organization while growing the business.
Sustaining transformation in an organization like AFCO is a more formidable challenge. Once the initial transformation was realized, the ability to leverage and sustain it became the next frontier. In the case of AFCO, the new iterative learning values and practices prepared it for this next challenge.
Incorporating evolving external market requirements such as green data centers and more efficient use of power and cooling technologies, AFCO is poised to leverage its initial transformation for sustainability. This will need to be accomplished through the continual incorporation of these external market forces, translation of these forces into a refreshed organizational vision and the perpetuation of the cooperative working environment at all levels.
True transformational change occurs when an organization can no longer envision going back to old behaviors and practices. This concept is akin to “burning a bridge” so as to ensure forward movement. The forward direction is forged through assessing appropriate market intelligence, leveraging organizational core capabilities and readily adapting to internal and external influences. Each of these concepts requires diligent attention to perpetual learning to assimilate the market intelligence, define and mold the core competencies of the organization and adapt to emerging business challenges.
The assimilation of internal and external influences requires the organization to understand the changing dimensions, cooperatively distill them throughout the functions involved and readily prepare a set of tangible and quantifiable actions. These have been definitive aspects of AFCO’s ability to continually transform and assist its customer base with affordable and viable solutions.
Most notable has been the industry trend toward green data centers. One of the major challenges for the collocation of information technology equipment in commercial data-center environments is adequate power utilization and air flow to keep the equipment operating optimally.
Green data centers are intended to more effectively and efficiently utilize growing demands to power emerging information technology equipment. Thanks to its approach to learning, AFCO recognized this challenge before the market actually embraced its need and is positioned to assist customers in achieving a more efficient operating environment for this growing power demand in its data centers.
Recent challenges have included sustaining the transformation through a refreshed vision for further successful transformation, initiating a systems-thinking approach that values the integration of internal and external customer needs, a corresponding continuous improvement initiative in the manufacturing unit and perpetuating the teamwork paradigm in the organization. Each of these challenges requires continual learning and advancement of the vision.
Successful transformational change within an organization requires a thorough understanding of the external market opportunities, the ability to translate those opportunities into a clear and concise vision for the organization, a true understanding of the organizational capabilities and maturity, a robust and healthy organizational culture framework to absorb the tumultuous journey and a reasonable grasp of what it means to synthesize all of these through a new learning model for the organization.
AFCO is embracing this opportunity to unleash employee creativity, encourage whole-systems thinking and use iterative learning to keep pace with its customers and the global business environment.
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