Articles

Of the many ideas that have entered the business world by way of the Internet, few have proved more potent than "online community" in which networked groups of people engage in many-to-many interactions. While community is central to the success of many consumer-oriented Web sites, companies in other industry segments are still learning how to best put community to work. The authors studied 15 online communities to determine how to best establish and maintain such communities. They developed a framework that identifies three activities central to the success of every online community: member development, asset management and community. Continuous member development is required to grow the community and replace members who leave. Communities need clearly defined goals and member demographics to be marketed effectively. Member acquisition and retention is best achieved by using a wide variety of communication tools. Community assets include content, alliances and infrastructure. Asset managers must create member profiles and topic-specific subcommittees, capture and disseminate useful knowledge, and create processes that facilitate member involvement. Communities must evolve over time to meet the changing needs of their members. Community relations establishes guidelines for community members and moderators. While conflict is often welcomed to spur participation, explicit rules help community members police themselves and guide moderators when intervention is required. Moderators must be experienced and rigorously trained. The authors illustrate these lessons in case studies of four kinds of online communities: Kaiser Permanente Online extends the HMO's services to members via the Web. The community improves outcomes and lowers costs by fostering preventive care. Community members interact with each other and with doctors in moderated sessions. Their feedback enables Kaiser to continuously improve its services. About.com operates a news and entertainment network comprised of more than 600 topic-specific Web sites known as GuideSites. About.com's virtual community delivers training services to GuideSite Webmasters, shares best practices, disseminates marketing materials, discusses corporate strategy and encourages collaboration between GuideSites. Sun Microsystems created the Java Center community to foster thought leadership and knowledge sharing among its most senior Java application developers. The community also serves more than 1,000 systems integrators and Sun customers. Community members post project and design documents, links to source code and to other useful Web sites. Ford Motor Company's virtual community encourages engineers to share knowledge, collaborate in work groups, and find knowledge using the company's intranet. Ford's community improves the speed, quality and cost efficiency of new product development. The community provides Ford's engineers access to more than 500,000 engineering documents.

Excellence at investing in and deploying IT isn't sufficient to achieve superior business performance: companies must also excel at collecting, organizing and maintaining information, and at getting their people to embrace the right behaviors and values for working with information. In this article, the co-authors present the results of a two-and-a-half-year international research project led by the Institute for Management Development. They show that senior managers view strong IT practices, competent management of information, and good information behaviors as components of one higher-level idea -- "Information Orientation" or "IO" -- which measures a company's capabilities to effectively manage and use information. IO is also a predictor of business performance. The authors compare two retail banks to illustrate the differences between high- and low- IO companies. Among the guidelines: -- Focus your best IT resources on what makes you distinctive. -- Companies should actively manage all phases of the information life cycle, from identifying new information to processing and maintaining it. -- Managers and employees must develop an explicit, focused view of the information necessary to run the business. -- Do not compromise on information integrity. Employees must use information in an ethical and appropriate way.

Strategically outsourcing innovation can put a company in a sustainable leadership position.

When it comes to combining a high level of customer service with a lean and efficient supply chain, few companies can match Saturn's after-sales service business. According to the four authors (a Saturn manager, a former manager from parent company General Motors, and supply-chain experts from the Wharton School and from Stanford University), Saturn has a twofold source of strength. It has a service-supply-chain strategy that can match the urgency of its customer's varying needs. And it shares both authority and risk with channel partners -- making them more willing to help execute the strategy. The company adopted and continues to refine the concept of jointly managed inventory, a variant of vendor-managed inventory that involves sharing inventory risks with Saturn retailers (dealers). The implications extend beyond the automotive industry: Companies that match their parts-supply strategy to the criticality of the customers need for the part can dramatically improve satisfaction in after-sales interactions. A key difference is Saturn's pull system -- a response to the highly unpredictable nature of parts demand. Saturn does not position inventory in advance on the basis of forecasted consumption but rather replenishes retailer's supplies on a one-for-one basis. The demand-based approach triggers movement of parts down the supply chain. But although Saturn determines what to stock, retailers may counteract the decision. And if a part sits for more than nine months at the retailer, Saturn buys it back. Saturn shares other costs as well. If a part cannot be found through the local retailer pooling groups (a rare event), Saturn bears the cost of the search. Managers in other industries can meet customer's needs efficiently if they align their companies service-network strategies with the urgency of a customers need. The authors show how to do that by plotting a company on a matrix that ties the company's service strategy to criticality (most service strategies are somewhere between centralized and distributed). Saturn's approach has helped it build strong and cooperative retailer relationships that end up benefiting the customer.

Many managers avoid confronting six common, silent killers of strategy implementation.

Many retailers proudly declare their commitment to customer convenience. However, few define convenience from the customer's point of view or systematically craft a convenience strategy. Confronting more retail options than ever, customers value speed and ease at every stage of the retail transaction. Pressed for time, they place a premium on such store features as one-stop shopping, clearly marked aisles, in-stock merchandise, clearly presented pricing, sufficient staffing, efficient checkouts, expanded hours, and easy returns. The retailer that meets these needs and spares its customers needless delays wins their loyalty and outperforms the competition. Some high-performing retailers demonstrate genuine respect for customers' time and effort by viewing the retail experience as an integrated whole consisting of distinct but related parts. These stores enhance the convenience of their market offerings in four main ways: by ensuring that the store's services and products are easy to reach, by enabling customers to speedily identify and select the products they want, by making it easy for customers to obtain desired products, and by expediting the purchase and return of products. The authors cite many real-life examples, including Walgreen, Staples, LensCsrafters, Dell, L.L. Bean, and Dial-A-Mattress, which demonstrate the innovative ways companies address forms of convenience. For example, access considerations may include physical location, parking, store hours, proximity to other stores, and telephone and Internet access. Intelligent store design and layout, knowledgeable salespeople, customer interactive systems, and clear signage are also critical aids in expediting the shopping experience. In regard to providing what a customer wants, in-stock merchandise, timely production, and timely delivery are relevant factors. Self-scanning at checkout counters, drive-through windows, and purchase guarantees are among the ways that retailers can make it easy for customers to complete or adjust their purchases. The most successful retailers invest in all four forms of convenience.

How can companies use brands to expand customer relationships? Many marketing strategists believe they can strengthen consumer brands by building online communities around brands. Observing the power of community spirit in noncommercial brand communities on the Internet, companies now want to establish dialogues with their loyal customers and provide consumer-to-consumer communication in realtime. If the digital pathway is the correct route for cultivating brand loyalty, how can companies nurture brand-based communities? Factors that can help the brand strategist, the author argues, include examining successful communities, addressing management issues, and developing community leadership skills. The popular Geocities Web site, for example, attracts "dwellers" to a familiar "environment" and offers community members a sense of involvement as well as entertainment. Managers also need to understand the difficulties inherent in creating and managing brand-based Web communities. Brand focus and strategic objectives will determine the characteristics of the content offered on the Web. But managers must also exercise community control, establish guidelines for authenticity and ethics, attract volunteer managers, and monitor community size and composition. Ultimately, managers must recognize that the brand community is not just another communications vehicle. Successfully managing a brand community requires professional managers to lead and promote interplay among community members, to manage community volunteers, and to exercise sound editorial judgment in content development. Equally important is integrating a brand-based online community with traditional marketing practices and a company's total brand strategy. When fully developed, says the author, this type of online community will become a vibrant public manifestation of the company.

U.S. prosecutors are imposing giant fines and imprisoning managers when regulatory compliance problems arise. Know how to protect your company and yourself when a legal crisis hits.

Executives can become so wedded to a project, technology or process that they continue with it even when it’s seriously course.

The Internet changes everything -- particularly for companies with brick-and-mortar operations, branded products and services, and traditional supplier and customer relationships. The author addresses five key issues confronting such companies: strategic vision, governance, resource deployment, operating infrastructure, and leadership alignment. Strategic vision. Because e-business is evolving so rapidly, companies must continuously augment current business models (e.g., improve supply chains) while experimenting to create new ones. New business models change the rules for competitors and deliver markedly improved customer value. Companies must be willing to cannibalize existing products and services and engage in strategic alliances. Governance. Companies can organize their dot-com operations as subsidiaries or as part of their existing operations. Subsidiaries make sense when the company is exploring new business models or needs greater freedom to enter alliances, raise capital, and attract talent. Integrating the dot-com business with current operations makes sense if the entire company is migrating to the Web. Governance is further complicated by a war for talent that is being won by Internet startups. Resource deployment. Companies must commit significant resources to differentiate their dot-com operations from those of competitors. They should enter alliances to explore a wide range of opportunities and leverage those that succeed. Outsourcing services can speed implementation. Established companies must develop incentives to attract and retain Web-savvy talent. Operating Infrastructure. The dot-com infrastructure delivers enhanced customer value by straddling physical and digital spaces and providing linkages to partners. At minimum, it must deliver superior functionality, personalized interaction, streamlined transactions, and pragmatic privacy. Leadership alignment. Dot-com operations require superb alignment among key executives. Each must play a leading and supporting role for different aspects of the business. If the management team is not aligned, the dot-com strategy may be hijacked by one or two members with a partisan agenda. Powerful transformations are under way as companies blend their traditional and Internet businesses. Managers must align their vision to the dot-com world lest the leaders of the Industrial Age become the dinosaurs of the dot-com era.