Articles

The role of brands and the ways of managing brands are changing. The authors review how brands aid the buyer and seller and, by focusing on the customer-oriented functions of brands, offer insight into how brand management is evolving. Factors propelling changes in brand management include: 1. Information technology. By simplifying customer search and by enabling retailers to collect real-time information about individual shoppers, IT shifts power away from consumer goods manufacturers and their brand managers. 2. Maturing consumer values. Changing demographics ensure that future markets will consist of experienced buyers. Skeptical of superficial blandishments, they seek to understand the relationship between quality and price, aided in their search by technology. 3. Brand mimicry and brand extension. An abundance of copycat or extension products degrade the brand as a marketing tool, confounding a consumer's attempts to differentiate among products. 4. Autonomy of retailers. Trade concentration, exemplified by supermarket retailing, is shifting the "center of marketing gravity" to retailers who are managing for product category profitability. The authors propose three scenarios for the future of brand management: In Scenario 1, current trends continue. Copycat and brand-extension products diminish as pressure on all but the leading brands increases due to restricted shelf space. Companies emphasize "umbrella" branding at the corporate and product-family levels; brand managers begin working on cross-functional teams organized around categories or processes. Scenario 2 is at least partially in place in some companies. Simplified brand and organizational structures focus on trade customers with whom manufacturers develop joint strategies. Scenario 3 differs radically from the past. By using increasingly economical, IT-based techniques, firms identify customers individually, enabling them to organize and manage customers rather than brands or products. The key lesson is that managers should focus on the dynamically evolving functional patterns of brands rather than on the brands themselves.

Understanding technical complexity is intrinsic to developing effective strategies for managing factory operations. The practices that the author observed during a three-year study of ten color picture tube factories highlight two contrasting forms of managing processes -- the control method (suitable when most contingencies are anticipated and the organization can be structured clearly) and the learning method (suitable when problem recognition, definition, and solution are likely to differ for every situation). Detailed survey data from fifty-four of sixty-three existing color picture tube plants also augment the author's in-depth case studies. Factors relevant to effectively managing production in a factory are logistical complexity (a high volume of transactions or tasks) and technological complexity (the inherent intricacy of the system and its technologies). This paper focuses on the special dictates of technological and process complexity that strain traditional information and process-control systems. A hybrid of flow/assembly and continuous processes, color picture tube manufacturing consists of 200 key production steps, involving more than two dozen process technologies -- chemical, electrical, optical, and mechanical. At the best-performing factories, appropriate problem-solving techniques, experiment-based learning methods, and organizational procedures for routine tasks aid in managing this complexity. Complex processes need "generalist engineers" who are knowledgeable about engineering functions and processes beyond their usual domains. Emphasis shifts from "local" process control to "process-wide" management -- managing process interactions and sharing and coordinating information from different processes. Company policies and incentives to develop problem-solving capabilities, acquire detailed engineering knowledge, and hone the analytical skills of workers are critical to the effective functioning of these complex operations. Adopting learning-based methods of process management promotes an organization's ability to create, acquire, process, and retain new knowledge in an era of increasing complexity and uncertainty.

Despite a downturn in the U.S. semiconductor industry in the 1980s, Intel, Micron Technology, and Texas Instruments exploited innovative technology and unique capabilities to shape their local environments and maintain their competitiveness. They employed combinations of the following generic strategies: 1. Blocking. A firm prevents others from imitating its innovation. Tactics include defending intellectual property in the courts and establishing a reputation for retaliating against new market entrants. 2. Running. Whereas blocking may give competitors time to catch up or leapfrog the innovator, running ensures that the innovator stays ahead by introducing new products, even if by "cannibalizing" its own products. 3. Teaming up. The opposite of blocking, teaming up encourages collaborative entry into markets to improve the chances of establishing an industry standard or dominant design. These strategies intertwine with a firm's competencies and endowments (brand name, patents, distribution channels), its national environment (enactment and enforcement of laws to protect copyrights, patents, trade secrets), and the nature of the technology underpinning a firm's innovation. Intel strategically allied itself with other companies, defended its intellectual property, speedily developed newer generations of microprocessor, and enhanced brand recognition with its "Intel Inside" advertising campaign. Unable to out-manufacture its Japanese rivals, Micron focused on its advanced design capabilities and successfully filed suit against six Japanese chipmakers for dumping below-cost chips on the U.S. market. Its success set the stage for the establishment of Sematech, a consortium funded by member firms and the U.S. government to build a local environment conducive to semiconductor manufacturing and related industries. Texas Instruments vigorously protected its voluminous patent portfolio, collecting royalties that exceeded operating income for a seven-year period. The firm also negotiated cross-licensing agreements and alliances to obtain manufacturing capabilities in Japan. Strategic corporate decisions in defense of profits work in tandem with national environment to ensure industry well-being.

Existing management frameworks do not describe all the ways that companies are competing successfully today. When queried, senior executives concurred that conventional theories and business practices do not provide the necessary guidance and support for decision making in a world of change, complexity, and uncertainty. The authors' research on more than 100 companies is the basis of their Delta model which (1) defines strategic positions that reflect fundamentally new sources of profitability, (2) aligns these strategic options with a firm's activities and provides congruency between strategic direction and execution, and (3) introduces adaptive processes capable of continually responding to an uncertain environment. They describe three strategic options having three distinct economic perspectives -- best product, customer solutions, and system lock-in. These strategic options provide a mechanism for defining the vision of a business. Outstanding real-life business successes achieved through strikingly different strategies and drawn from fundamentally different sources of profitability illustrate the nature of these strategic positions. The Delta model links strategy with execution by selecting a distinctive strategic position and then integrating it with a company's collective processes. The authors identify three fundamental processes that are always present and are the repository of key strategic tasks: operational effectiveness, customer targeting, and innovation. Strategy must adapt continuously, and implementation must respond to market changes and to greater understanding of the market that becomes apparent only during implementation. A firm's actions must be aligned with its strategic position, and the results must give feedback for adapting the strategy. The authors outline common responsive mechanisms for obtaining feedback from the adaptive processes and suggest metrics that are essential to adaptation. To anticipate the future, it is necessary to track performance against the adaptive processes, which are the initiatives enabling the strategy. The Delta model provides a rich overall framework that integrates a firm's options and activities without running the risk of oversimplifying the context in which it makes decisions.

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.