Articles

Dozens of markets of all types are in the early stages of a revolution as the Internet and related technologies vastly expand the variety of products that can be produced, promoted and purchased. Although this revolution is based on a simple set of economic and technological drivers, the authors argue that its implications are far-reaching for managers, consumers and the economy as a whole. This article looks at what has been dubbed the "Long Tail" phenomenon, examining how customers derive value from an important characteristic of Internet markets: the ability of online merchants to help consumers locate, evaluate and purchase a far wider range of products than they can typically buy via the traditional brick-and-mortar channels. The article examines the Long Tail from both the supply side and the demand side and identifies several key drivers. On the supply side, the authors point out how e-tailers' expanded, centralized warehousing allows for more offerings, thus making it possible for them to cater to more varied tastes. On the demand side, tools such as search engines, recommender software and sampling tools are allowing customers to find products outside of their geographic area. The authors also look toward the future to discuss second order amplified effects of Long Tail, including the growth of markets serving smaller niches.

Despite the importance of management innovation, it is poorly understood and usually not systematically fostered. To research the process, the authors first conducted an historical analysis of more than 100 management innovations that took place over 130 years. Then they studied 11 recent cases of management innovation, in most cases interviewing one or more of the key innovators. The research revealed that, compared with the process of technological innovation, management innovation tends to be more diffuse and gradual. It typically follows four stages. The first stage is some type of dissatisfaction with the status quo, such as a crisis or strategic threat. That stage is followed by inspiration from other sources. The third stage is the invention of the management innovation itself. While most innovators identified a precipitating event that preceded the innovation, such as a challenge from a boss or a new assignment, few recalled a distinct "eureka moment"when the innovation occurred. The fourth stage is validation, both internally and through external sources such as academics, consultants, media organizations or industry associations.

When one company acquires another, executives have 10 distinct options for the corporate rebranding.

INTELLIGENCE: New developments, research and ideas in management

A company must have a three-dimensional view of its brand.

You must tell your strategy story to reach four different audiences.

When employees leave an organization, they depart with more than what they know; they also leave with critical knowledge about who they know. Thus, the departure of key people can significantly affect the relationship structure and consequent functioning of an organization. In particular, companies should be aware of the unique knowledge held by three important types of employees: "central connectors" (those who are regularly asked for help, typically because they have a high level of expertise in one or more areas), "brokers" (those who act as bridges across subgroups) and "peripheral players" (those who reside on the boundaries of a network but could still possess valuable niche expertise and outside knowledge). Departure of an employee who filled any one of these roles presents knowledge-loss risks that need to be addressed. The departure of a handful of key brokers, for example, could fracture the social network of an organization into isolated subgroups. Thus companies need to take various measures to (1) identify key knowledge vulnerabilities by virtue of both what a person knows and how that individual's departure will affect a network and (2) address specific knowledge-loss issues based on the different roles that employees play in the network.

Checks and balances, competitive elections and term limits could improve corporate oversight.

With real wages stagnating and job security elusive for many U.S. workers, the American dream of an improved standard of living for each generation is in jeopardy. The author argues that, although many companies seek to become competitive primarily by reducing costs such as labor, there is another option. A substantial body of research, he reports, indicates that companies that invest in their workforces to build knowledge-based organizations can achieve a return on their investment through higher productivity and profitability. The author cites the example of Continental Airlines Inc., which after an era under Frank Lorenzo that was marked by wage cuts and bankruptcy, experienced improved performance and reputation under a new leadership team with a more collaborative management approach. Southwest Airlines Co. and JetBlue Airways Corp. are also examples of airlines that pursue a high-trust, knowledge-based strategy, while Toyota Motor Corp. and Kaiser Permanente are examples from other industries. Executives interested in building knowledge-based organizations can create momentum for their initiatives in several ways: by carefully documenting the gains from knowledge-based strategies, by encouraging employee representation in corporate governance matters, and by working with other leaders to approach problems that no single company can solve alone.

Many manufacturers already have established product development activities in different countries around the world. As a rule, the current approach includes colocation of cross-functional teams to foster close collaboration among engineering, marketing, manufacturing and supply-chain functions. The results to date -- better product designs, faster time to market and lower-cost production -- have been satisfactory. However, growth and innovation can now be much more effective if manufacturers tie their decentralized development organizations into a cohesive, unified global product development operation. In this article, the authors introduce new empirical frameworks to guide managers toward such practices. Citing exemplars such as Hewlett-Packard, Eastman Kodak, Hyundai Motors, Haier, Alcatel and Cummins, the authors explain why GPD has come of age and demonstrate a three-stage approach that puts product development in the context of a company's relationships with outside partners. The article draws from extensive interviews with engineering managers at more than 100 companies in 15 countries in North America, Europe and Asia. Additional data are from a recently completed study on GPD that PTC has conducted with BusinessWeek Research Services, interviewing and surveying more than 1,100 engineering managers worldwide.