Articles

Companies with the best connections to their customers focus on the people and businesses that buy from them.

Organizations, like people, have essential natures & #8212; defined by their formative experiences, their beliefs, their knowledge bases and their core competences & #8212; which may remain tacit and unquestioned until some event, such as a new strategy or a radical shift in the environment, makes an old identity obsolete. A disruption in a strongly anchored identity can be fatal, unless managers can align their company’s identity better with current business conditions. Hamid Bouchikhi, of France’s ESSEC Business School and John R. Kimberly of the University of Pennsylvania’s Wharton School note that while the “identity trap” threatens every organization, escaping a restrictive identity is possible. They identify two ways enterprises do this successfully & #8212; through evolution (a gradual change in their strategic and organizational layers) and revolution (a change that bursts up through companies’ outer layers). Through field-based and clinical research in a variety of industries and companies, including Moulinex, Polaroid, Groupe Danone and Aventis, the authors have developed an “identity audit” to help managers learn to recognize the conflicts and initiate identity change to make their companies more adaptive. By regularly assessing how well their identity fits with current business conditions, companies can rethink their identity before it becomes obsolete.

Why do motivated managers often fail to follow through? Because motivation is not enough. Superficial and dependent on incentives, motivation gives up in the face of serious obstacles. For purposeful action taking at work, managers must engage a more powerful attribute, their willpower. The best already do, crossing a personal Rubicon to deep commitment. How that happens is the subject of studies by professors from the London Business School and the University of St. Gallen. The researchers find that managers commit for highly individual reasons but that five strategies can help enterprises create the right environment. The companies studied included large ones such as ConocoPhillips and Lufthansa and small ones such as Micro Mobility Systems of Switzerland. The managers who achieved their apparently impossible goals had in common an intense inner struggle to commit. Once their willpower was engaged, they were able to deal with setbacks and persevere. The best way to build persistent organizational commitment is bottom-up, on the foundation of personal ownership of and commitment to specific initiatives and goals. In the world of mobile employees, frontline entrepreneurship and constant, unavoidable organizational restructuring, corporate leaders must develop that kind of commitment if they want to see action and follow-through in their companies.

Companies have much to gain by actively touting their human resources successes. So why don't they?

An overview of new research on innovators’ incentives and the innovation process.

Most suppliers lack sufficient customer knowledge to implement anything but the most sales-oriented growth strategies and tactics. If they wish to achieve profitable, sustainable growth and a larger share of their customers’ wallets, they need a fine-grained, disciplined approach to obtaining, leveraging and documenting customer knowledge. James C. Anderson of Northwestern’s Kellogg School and James A. Narus of Wake Forest University have been conducting management-practice research with companies that have superior knowledge of their customers and use it to devise and implement focused, inventive strategies that create profitable growth while increasing the value delivered. Using the examples of best-practice suppliers such as Bank of America, Seghers, Technische Unie, KLM Cargo and Telindus, the authors suggest a strategic framework to guide supplier managers in the selective pursuit of a greater share, predicated on estimating the current share of each customer’s business, selecting and pursuing appropriate and inventive opportunities to increase that share, and carefully documenting the profitability efforts. According to Anderson and Narus, building the scope of the market offering, broadening collaboration and using multiple single sourcing each represent ways of growing business share selectively with a customer while improving profitability for both the supplier and customer.

Intellectual property assets now account for 50% to 70% of the market value of all public companies, and corporate America is intensifying efforts to maximize the return on those assets. That explains why a small but growing number of Fortune 500 enterprises are moving away from a strict reliance on the “exclusivity value” of their patents and other intellectual property & #8212; that is, their power to exclude or hinder competitors & #8212; and are instead seeking to tap the often enormous financial and strategic value of their core technology assets by licensing them to other companies, including competitors. The practitioners of this strategic licensing, as it is called, are betting that any loss of market exclusivity that may result from making available their “crown jewel” technologies will be more than offset by the financial and strategic benefits gained. For this article, the author interviewed some of the pioneer practitioners of this emerging approach and got them to explain the nature and degree of the benefits their companies are now reaping. Although patent rights should always remain an important weapon in a company’s competitive arsenal, strategic & #8212; licensing initiatives are encouraging managers to rethink what it means to create and sustain competitive advantage in business.

Companies are increasingly rethinking the fundamental ways in which they generate ideas and bring them to market — harnessing external ideas while leveraging their in-house R&;D outside their current operations.

Research indicates that buyers are more likely to perceive value in global brands.