Friday, March 30, 2012

Are you ready for the era of ‘big data’?
Radical customization, constant experimentation, and novel business models will be new hallmarks of competition as companies capture and analyze huge volumes of data. Here’s what you should know.
OCTOBER 2011 • Brad Brown, Michael Chui, and James Manyika
Source: McKinsey Global Institute

Very interesting impact of technology on the fundamental way you  can run your business. We must all be aware of what is possible. I strongly urge you read the full article.

"All of this new information is laden with implications for leaders and their enterprises.1 Emerging academic research suggests that companies that use data and business analytics to guide decision making are more productive and experience higher returns on equity than competitors that don’t.2That’s consistent with research we’ve conducted showing that “networked organizations” can gain an edge by opening information conduits internally and by engaging customers and suppliers strategically through Web-based exchanges of information…
…over the last few years, the volume of data has exploded. In 15 of the US economy’s 17 sectors, companies with more than 1,000 employees store, on average, over 235 terabytes of data—more data than is contained in the US Library of Congress. Reams of data still flow from financial transactions and customer interactions but also cascade in at unparalleled rates from new devices and multiple points along the value chain…
…this article, we outline important ways big data could change competition: by transforming processes, altering corporate ecosystems, and facilitating innovation:
1. What happens in a world of radical transparency, with data widely available?
As information becomes more readily accessible across sectors, it can threaten companies that have relied on proprietary data as a competitive asset.
2. If you could test all of your decisions, how would that change the way you compete?
Big data ushers in the possibility of a fundamentally different type of decision making. Using controlled experiments, companies can test hypotheses and analyze results to guide investment decisions and operational changes
3. How would your business change if you used big data for widespread, real-time customization?Customer-facing companies have long used data to segment and target customers. Big data permits a major step beyond what until recently was considered state of the art, by making real-time personalization possible.
4. How can big data augment or even replace management?
Big data expands the operational space for algorithms and machine-mediated analysis
The bottom line is improved performance, better risk management, and the ability to unearth insights that would otherwise remain hidden. As the price of sensors, communications devices, and analytic software continues to fall, more and more companies will be joining this managerial revolution
5. Could you create a new business model based on data?
Big data is spawning new categories of companies that embrace information-driven business models."

Monday, March 19, 2012

Understanding your ‘globalization penalty’
Martin Dewhurst, Jonathan Harris, and Suzanne Heywood

Super article on successfully creating and managing global businesses against  very strong local players.
Strong multinationals seem less healthy than successful companies that stick closer to home. How can that be?The rapid growth of emerging markets is providing fresh impetus for companies to become ever more global in scope. Deep experience in other international markets means that many companies know globalization’s potential benefits—which include accessing new markets and talent pools and capturing economies of scale—as well as a number of risks: creeping complexity, culture clashes, and vigorous responses from local competitors, to name just a few.Less obvious is a challenge identified by our latest research: global reach seems to threaten the underlying health of far- flung organizations, even highly successful ones... 
....To understand what lies beneath their findings, we interviewed executives at 50 global companies. Those interviews, while hardly dis positive, suggested a relationship between organizational health and a familiar challenge: balancing local adaption against global scale, scope, and coordination.Almost everyone we interviewed seemed to struggle with this tension, which often plays out in heated internal debates. Which organizational elements should be standardized? To what extent does managing high-potential emerging markets on a country-by-country basis make sense? When is it better, in those markets, to leverage scale and synergies across business units in managing governments, regulators, partners, and talent?...
 ...Complicating matters further, our interviews suggested that, for most companies, about 30 to 40 percent of existing internal networks and linkages are ineffective for managing global–local trade-offs and instead just add costs and complexity. Many companies, for example, can’t identify transferable lessons about low-income consumers in one high-growth emerging market and apply them in another. Some struggle to coalesce rapidly around market-specific responses when local entrants undermine traditional business models and disrupt previously successful strategies.
Finally, many executives we interviewed are clearly wrestling with the corporate center’s role in their increasingly globalized institutions. .

Thursday, March 15, 2012

Organizational health: The ultimate competitive advantage
To sustain high performance, organizations must build the capacity to learn and keep changing over time.
JUNE 2011 • Scott Keller and Colin Price
Source: Organization Practice

A GREAT article!!!

....Our central message is that focusing on organizational health—the ability of your organization to align, execute, and renew itself faster than your competitors can—is just as important as focusing on the traditional drivers of business performance. Organizational health is about adapting to the present and shaping the future faster and better than the competition. Healthy organizations don’t merely learn to adjust themselves to their current context or to challenges that lie just ahead; they create a capacity to learn and keep changing over time. This, we believe, is where ultimate competitive advantage lies..

Monday, March 12, 2012

True Innovation
NYT, 2/25/2012

There are some powerful learning’s in this article that studies the innovation engine that was—Bell Labs.

...our trailblazing digital firms may not be the hothouse environments for creativity we might think. I find myself arriving at these doubts after spending five years looking at the innovative process at Bell Labs, the onetime research and development organization of the country’s formerly monopolistic telephone company, AT&T..
...the staff worked on the incremental improvements necessary for a complex national communications network while simultaneously thinking far ahead, toward the most revolutionary inventions imaginable...
...In his recent letter to potential shareholders of Facebook, Mark Zuckerberg noted that one of his firm’s mottoes was “move fast and break things.” Bell Labs’ might just as well have been “move deliberately and build things.” This sounds like the quaint pursuit of men who carried around slide rules and went to bed by 10 o’clock. But it was not.
Consider what Bell Labs achieved. For a long stretch of the 20th century, it was the most innovative scientific organization in the world. On any list of its inventions, the most notable is probably the transistor, invented in 1947...
...Mr. Kelly was employed at Bell Labs, rising from researcher to chairman of the board. In 1950, he traveled around Europe, delivering a presentation that explained to audiences how his laboratory worked.
His fundamental belief was that an “institute of creative technology” like his own needed a “critical mass” of talented people to foster a busy exchange of ideas. But innovation required much more than that. Mr. Kelly was convinced that physical proximity was everything; phone calls alone wouldn’t do. Quite intentionally, Bell Labs housed thinkers and doers under one roof. Purposefully mixed together on the transistor project were physicists, metallurgists and electrical engineers; side by side were specialists in theory, experimentation and manufacturing. Like an able concert hall conductor, he sought a harmony, and sometimes a tension, between scientific disciplines; between researchers and developers; and between soloists and groups.
ONE element of his approach was architectural. He personally helped design a building in Murray Hill, N.J., opened in 1941, where everyone would interact with one another. Some of the hallways in the building were designed to be so long that to look down their length was to see the end disappear at a vanishing point. Traveling the hall’s length without encountering a number of acquaintances, problems, diversions and ideas was almost impossible. A physicist on his way to lunch in the cafeteria was like a magnet rolling past iron filings.
Another element of the approach was aspirational. Bell Labs was sometimes caricatured as an ivory tower. But it is more aptly described as an ivory tower with a factory downstairs. It was clear to the researchers and engineers there that the ultimate aim of their organization was to transform new knowledge into new things...
.....working in an environment of applied science like Bell Labs “doesn’t destroy a kernel of genius, it focuses the mind.” At Bell Labs, even for researchers in pursuit of pure scientific understanding, it was obvious that their work could be used.
Still another method Mr. Kelly used to push ahead was organizational. He set up Bell Labs’ satellite facilities in the phone company’s manufacturing plants, so as to help transfer all these new ideas into things. But the exchange was supposed to go both ways, with the engineers learning from the plant workers, too...
....But what should our pursuit of innovation actually accomplish? By one definition, innovation is an important new product or process, deployed on a large scale and having a significant impact on society and the economy, that can do a job (as Mr. Kelly once put it) “better, or cheaper, or both.” Regrettably, we now use the term to describe almost anything. It can describe a smartphone app or a social media tool; or it can describe the transistor or the blueprint for a cellphone system. The differences are immense. One type of innovation creates a handful of jobs and modest revenues; another, the type Mr. Kelly and his colleagues at Bell Labs repeatedly sought, creates millions of jobs and a long-lasting platform for society’s wealth and well-being.
The conflation of these different kinds of innovations seems to be leading us toward a belief that small groups of profit-seeking entrepreneurs turning out innovative consumer products are as effective as our innovative forebears. History does not support this belief. The teams at Bell Labs that invented the laser, transistor and solar cell were not seeking profits. They were seeking understanding. Yet in the process they created not only new products but entirely new — and lucrative — industries.