Tuesday, January 26, 2010

The Seven Principles of An Organic Growth Program
Mon, 2009-08-17 15:36 — Steve Litzow


This is a very insightful article on the complexities of driving organic growth.....

"Driving organic growth in an organization is not as simple as implementing a strategy or rolling out a new framework. It is a complex multi-component program that usually takes many years to implement. While framework and tools are essential ingredients, the success of the program is rooted in managing the culture change in the organization and creating hunger within the organization for a new, customer-centric approach.

1. Tie into Corporate Performance Goals
Action: Develop Business Goals for your demand generation initiative and have them communicated to every relevant person by the CEO/CMO.
Ensure customer-centricity from the top
Action: Identify the iconic behaviors for senior management that will signal customer-centricity the most to your organization and monitor and communicate the same.
3. Make a change in the power center
Action: Identify the power center of your organization and determine how that can
be influenced by customer-centric “outside-in” thinking.
4. Pick your battles

Action: To prioritize your efforts, conduct assessment and benchmarking to identify the areas that are both critical and broken.
Be impatient for results and patient for organizational behavior change
Action: Create the pull for customer-centric approach and tools by focusing initially on proving a success model rather than process development, training or any other classic capability-building efforts.
(change is always better driven by success than jut in-depth studies)
Modify rewards and incentives
Action: Involve an HR representative in the core team and ensure that a review of rewards and incentives is made an integral part of the program.
Leverage key people
Action: Identify how best to bring external perspective into the core team and create a combination of internal experience and external perspectives to create a balanced program."

Thursday, January 21, 2010

Is China an Enron? (Part 2)
January 20, 2010
This is an unusual posting in that it is from Tom Friedman, an op-ed contributor to the New York Times. Independent of politics, Mr. Friedman is incredibly insight on global issues. The pertinence to us is his discussion of the importance of “knowledge flows” to establishing competitive separation for a company and, in this discussion, for a country. This is part of the Open Innovation discussion we have been having over the past few years (see the postings on our blog site under Ideas.)

"Last week, I wrote a column suggesting that while some overheated Chinese markets, like real estate, may offer shorting opportunities, I’d be wary of the argument that China’s economy today is just one big short-inviting bubble, à la Dubai. Your honor, I’d like to now revise and amend my remarks.

There is one short position, one big short, that does intrigue me in China. I am not sure who makes a market in this area, but here goes: If China forces out Google, I’d like to short the Chinese Communist Party.

Here is why: Chinese companies today are both more backward and more advanced than most Americans realize. There are actually two Chinese economies today. There is the Communist Party and its affiliates; let’s call them Command China. These are the very traditional state-owned enterprises.

Alongside them, there is a second China, largely concentrated in coastal cities like Shanghai and Hong Kong. This is a highly entrepreneurial sector that has developed sophisticated techniques to generate and participate in diverse, high-value flows of business knowledge. I call that Network China.
What is so important about knowledge flows? This, for me, is the key to understanding the Google story and why one might decide to short the Chinese Communist Party.

John Hagel, the noted business writer and management consultant argues in his recently released “Shift Index” that we’re in the midst of “The Big Shift.” We are shifting from a world where the key source of strategic advantage was in protecting and extracting value from a given set of knowledge stocks — the sum total of what we know at any point in time, which is now depreciating at an accelerating pace — into a world in which the focus of value creation is effective participation in knowledge flows, which are constantly being renewed.

“Finding ways to connect with people and institutions possessing new knowledge becomes increasingly important,” says Hagel. “Since there are far more smart people outside any one organization than inside.” And in today’s flat world, you can now access them all. Therefore, the more your company or country can connect with relevant and diverse sources to create new knowledge, the more it will thrive. And if you don’t, others will.
I would argue that Command China, in its efforts to suppress, curtail and channel knowledge flows into politically acceptable domains that will indefinitely sustain the control of the Communist Party — i.e., censoring Google — is increasingly at odds with Network China, which is thriving by participating in global knowledge flows. That is what the war over Google is really all about: It is a proxy and a symbol for whether the Chinese will be able to freely search and connect wherever their imaginations and creative impulses take them, which is critical for the future of Network China.

Have no doubt, China has some world-class networked companies that are “in the flow” already, such as Li & Fung, a $14 billion apparel company with a network of 10,000 specialized business partners, and Dachangjiang, the motorcycle maker. The flows occurring on a daily basis in the networks of these Chinese companies to do design, product innovation and supply-chain management and to pool the best global expertise “are unlike anything that U.S. companies have figured out,” said Hagel.

The orchestrators of these networks, he added, “encourage participants to gather among themselves in an ad hoc fashion to address unexpected performance challenges, learn from each other and pull in outsiders as they need them. More traditional companies driven by a desire to protect and exploit knowledge stocks carefully limit the partners they deal with.”

Command China has thrived up to now largely by perfecting the 20th-century model for low-cost manufacturing based on mining knowledge stocks and limiting flows. But China will only thrive in the 21st century — and the Communist Party survive in power — if it can get more of its firms to shift to the 21st-century model of Network China. That means enabling more and more Chinese people, universities and companies to participate in the world’s great knowledge flows, especially ones that connect well beyond the established industry and market boundaries.

Alas, though, China seems to be betting that it can straddle three impulses — control flows for political reasons, maintain 20th-century Command Chinese factories for employment reasons and expand 21st-century Network China for growth reasons. But the contradictions within this straddle could undermine all three. The 20th-century Command model will be under pressure. The future belongs to those who promote richer and ever more diverse knowledge flows and develop the institutions and practices required to harness them.
So there you have it: Command China, which wants to censor Google, is working against Network China, which thrives on Google. For now, it looks as if Command China will have its way.
If that turns out to be the case, then I’d like to short the Communist Party. "

Monday, January 11, 2010

Managing Globally, and Locally
NYT, Published: December 12, 2009
This interview with Nancy McKinstry, the C.E.O. and chairwoman of the executive board of Wolters Kluwer, the information service company centered in the Netherlands, was conducted and condensed by Adam Bryant.

This was an insightful interview with one of the key lessons being that you must understand the culture of the business folks you are dealing with before sitting down with them:

"……..every culture is very different in how they make decisions. So that ability to understand how they interpret what you’ve said to them, and how you interpret what they’ve said back to you, and what are the rules of engagement about how you’re going to make a decision, is very important….

Q. Can you give me a couple of examples?
A. In the Netherlands, where our company is based, what you find is that people really want to be heard early on in the process. So if you just go to someone and say, “I want you to go take this product and enter this new market,” most likely the first response they’ll say is, “No, and let me tell you how that won’t work.” What they really want to say is, “I’m not going to commit yet to that objective until we have a chance to really sit down and explore how we’re going to do that, what your expectations are, and how we measure success.”
So what I’ve learned in Holland is that if you invest a lot of time upfront to explain what you’re trying to accomplish, get people’s feedback, then when they do say yes, the time to implementation is really fast. But if you don’t invest that time up front, you’re going to get such resistance that you’ll never get to the end.
Then, when I work with my Italian colleagues and the Spaniard colleagues, what you find is they can’t always tell you how they’re going to get something accomplished, but they manage to get it done, and providing them the latitude is important"

Monday, January 04, 2010

Why Vertical Integration Is Making a Comeback
Rita Mcgrath
3:26 PM Wednesday December 2, 2009

This is a great note on a familiar topic—vertical chain integration—with tremendous insight from Rita McGrath (which shouldn’t surprise anyone). This topic is appropriate for discussing organic growth because as you begin to fill the gaps in the Capability Platform required to meet a new Business Design—and if you are truly stretching yourself in your planning, you must have some gaps in your capabilities-- there is always a make or buy (M&A, JV, alliances) decision.

"As a recent article in the Wall Street Journal noted, a spate of companies in the high technology/high-end services space has rediscovered the joys of vertical integration…..
…..Now, whether you're talking HP buying EDS, Xerox acquiring ACS, IBM buying PwC, or Pepsi acquiring its bottlers, the firm that controls all the essential operations of a company by one governing entity (at least in theory) is back.

……To summarize: Vertical integration makes complete sense for a company that innovates by dramatically changing the customer's experience. Why? Because a customer-experience-innovation strategy depends on creating experiences that are easy, seamless, affordable, and, if possible, more pleasant than alternatives (for more on this idea, see Ian MacMillan's and my concept of the "consumption chain" published in HBR). In most product categories, where customers have to put their offers together by acquiring products and services from different providers, the chain breaks down. An innovator who can figure out how to eliminate annoyances and poor interfaces in the chain can build an incredible advantage, based on the customers' desire for that unique solution. Of course, until the unique solution is available, customers will put up with "broken" chains. Fix the problems, however, and the rewards can be substantial"