Articles

How Toyota’s product design and development process helps find the best solutions and develop successful products.

To understand the role of chief knowledge officer (CKO) and the evolving practice of knowledge management (KM), the authors studied twenty CKOs in North America and Europe using face-to-face interviews, and a personality assessment questionnaire. All CKOs were first incumbents, most having been on the job less than two years. Appointed by CEOs more through intuition and instinct than through analysis or strategic logic, the CKOs had to discover and develop the CEO's implicit vision of how KM would make a difference. The CKOs agreed that knowledge is a necesssary and sustainable source of competitive advantage and that companies are not good at managing either explicit knowledge (expressed in words or numbers and shared as scientific formulas, codified procedures, or universal principles) or tacit knowledge (personal, experiential, context specific, and hard to formalize). CKOs have two principal design competencies: they are technologists (able to understand which technologies can contribute to capturing, storing, exploring, and sharing knowledge) and environmentalists (able to create social environments that stimulate and facilitate arranged and chance conversations or able to develop events and processes to encourage deliberate knowledge creation and exchange). As self-starters and risk takers, these CKOs are entrepreneurs who can strategize about transforming the corporation through KM and are driven by building something and seeing it through. By matching new ideas with the business needs of their constituencies, the CKOs are also consultants, trafficking in ideas that fit the corporation's knowledge vision. Breadth of career experience, familiarity with their organizations, and infectious enthusiasm for their mission are characteristic of these CKOs. The personality characteristics and competencies of these CKOs are unusual and distinctive. They need to be sociable and energetic yet tolerant and pragmatic. Finding the right person is at least as important as deciding to create the CKO role. Two critical success factors have emerged: the need for organizational slack time (for thinking, dreaming, talking, and selling) and high-level sponsorship beyond visible CEO support. The CKO must make senior executives and prominent line managers believe in KM -- a goal that is indivisible from winning and retaining personal trust.

Almost every activity in which the enterprise engages, from the most mundane operation to the most far-reaching decision, requires data. Yet data are rarely managed well: few enterprises know what data they have; people cannot access or use data; and data quality is often low. Furthermore, individuals and business units often hoard data, leading to political battles over ownership. To help enterprises manage data as a business resource, the authors survey the fundamental properties of data and explore the special challenges and opportunities involved in working with data. "Data" consist of "data models," which are the organization's definitions of entities, their attributes, and the relationships among them, and "data values," which are the specific realizations of an attribute of the data model for particular entities. "Data records" are the physical manifestations of data stored in paper files, spreadsheets, and databases. Data have many distinctive qualities: for example, they are intangible; easy to copy, share, and transport; can be destroyed or lost inadvertently; are used for a variety of purposes; and are renewable. These and other properties of data have management implications in five key areas: making arrangements to supply the needs of data users; ensuring that individuals can access data; protecting data security; improving and maintaining data quality; and employing data effectively in operations and strategy. The authors offer a set of prescriptions to help enterprises meet these challenges: institute data quality and data supplier management programs, hone data needs, identify and manage critical information chains, recognize the proper role of technology, develop and disseminate an inventory of data resources, specify the terms under which data can be shared, avoid futile political battles, delineate management accountabilities, and ensure that senior executives lead the data management program.

Global business today requires leaders to be like explorers, guiding their organizations through unfamiliar and turbulent environments. With markets, suppliers, competitors, technology, and customers around the world constantly shifting, traditional leadership models no longer work. The authors' three-year study across Europe, North America, and Asia indicates that companies seek more global leaders and desire future global leaders of higher caliber and quality. To achieve these goals, organizations must understand the characteristics of global leaders and what they can do to develop these leaders. The research results reveal that every global leader needs certain core qualities: exhibiting character, or the capacity to build relationships with people from different backgrounds and to act with high ethical standards; embracing duality, or knowing when and whether to act and initiate change, depending on country or region; and demonstrating savvy, or recognizing worldwide market opportunities and understanding firm capabilities. Underlying each of these characteristics must be inquisitiveness -- a sense of adventure and a desire to experience new things. The authors' research further shows that global leaders are born and then made. Four strategies are particularly effective in developing global leaders: foreign travel, with immersion in the country's way of life; the formation of teams in which individuals with diverse backgrounds and perspectives work together closely; training that involves classroom and action learning projects; and overseas assignments, which serve to broaden the outlook of future global leaders.

Corporate executives need to rethink their marketing policies to reflect the distinctly different environments of EMs.

The concepts of product families, product platforms, and derivative products are as applicable to intangible software products as they are to tangible physical products. In both cases, firms can develop a family of products based on a common platform instead of starting from zero every time. Well-designed platform architectures for software products provide productivity benefits and enable rapid growth in market share and revenue. In addition, if the developer builds and communicates methods by which others can build modules that operate in or on the underlying platform, it can become the standard or basis of large-scale innovation, which provides significant strategic benefits. A product platform is a set of subsystems and interfaces that form a common structure from which a stream of derivative products can be efficiently developed and produced. The authors present a model of the architecture of software products and offer case examples showing platform design and management in action. Software developers adopting the product platform approach should form a dedicated team, supported by top management, to assess the organization's current situation and future potential. A market segmentation grid allows the team to document both market information and systems or product status information. In planning a new product platform, the team should understand target users' requirements; propose a new platform architecture and strategy; propose an implementation plan, budget, and time line; and propose an approach that allows for the joint design and sharing of platform components and development processes. Unless companies achieve an effective platform strategy, they are likely to face competitive disadvantages. The effort will require new ways of planning, budgeting, and organizing for systems development.

Current models of organizational strategy and structure fail to meet the challenges of the information age. Based on field study, the authors conceptualize an architecture, or guide, for virtual organizing that focuses on the importance of knowledge and intellect in creating value. Information technology lies at the heart of this business model for the twenty-first century. The authors' approach incorporates three interdependent vectors: customer interaction deals with new challenges and opportunities for company-to-customer interactions; asset configuration focuses on creating and deploying intellectual assets while sourcing physical assets from a complex business network; and knowledge leverage is concerned with opportunities for leveraging diverse sources of expertise within and across organizational boundaries. Each of the vectors in turn has three stages. Stage one focuses on task units such as customer service, purchasing, or new product development. Stage two focuses on coordinating activities to create superior value. Stage three focuses on the interorganizational network to design and leverage interdependent communities for innovation and growth. Each vector raises a distinct series of questions for managers. The overall challenge for companies is to harmonize the three vectors and to undertake external benchmarking when experimenting with different approaches to design.

Is your company doing its best to address customer complaints and learn from mistakes?

Together, suppliers organized to save Toyota from a devastating crisis that threatened to halt operations for weeks.

Growing recognition of the importance of supply chain management has prompted firms in the automotive industry to adopt new practices, including tiered supplier partnerships and supplier associations. While these approaches have been successful in the automotive industry, they may not be applicable to all firms. As an alternative, the authors propose the leveraged learning network. They use the experience of the High-Performance Manufacturing (HPM) Supplier Consortium developed by Allen Bradley Canada, a manufacturer of electric control panels, to explain how these networks operate and the results they achieve. The leveraged learning network is appropriate in cases where the buyer needs to improve supplier performance but lacks the power to compel the necessary improvements. Allen Bradley's initiatives to enhance supplier performance led to the development of a supply consortium; a reorganization culminated in the creation of HPM, a consortium of independent suppliers whose goal is "to work together to enable each member to optimize its competitiveness . . . using shared resources and experience." The consortium conducts a variety of education programs. A facilitator ensures that ideas and information flow continuously among the membership. Allen Bradley has greatly benefited from the suppliers' efforts to strive for world-class standards through reductions in defects, prices, and lead times; greater conformance to schedules; and better service. At the same time, the leveraged learning network poses difficulties, such as the buyer's forfeiture of control over membership and the need to dismiss members who fail to contribute sufficiently to the learning process. The challenge for managers and researchers is to determine the best conditions under which to choose either the tiered supplier partnership approach or the learning leveraged network. While the latter offers many potential opportunities, much work needs to be done to explore further its costs, benefits, and limitations.