Articles

Offering products or services alone is no longer enough: Organizations must provide their customers with satisfactory experiences. Competing on this dimension means orchestrating all the clues “that people detect in the buying process.”Customers always have an experience & #8212; good, bad or indifferent & #8212; whenever they purchase a product or service from a company. The quality of the experience lies in how effectively the company manages it, in all its facets and from beginning to end. Organizations that simply tweak design elements or focus on improving isolated pockets of the customer experience & #8212; by providing a quick hit of entertainment, for example & #8212; will be disappointed in the results. An organization’s first step toward managing the total customer experience is recognizing what the authors call clues: the signals or messages given off by everything that touches on the buying process. Clues can include the product itself (does it work as advertised?), the layout of a retail outlet (are the signs easy to follow?), the tone of voice of the salesperson (did he really mean it when he said, “Have a nice day”?), and so on. Organizations that orchestrate the sum total of all the clues can create an optimal experience for their patrons. Addressing the clues that speak to emotions is especially important. Emotional bonds between companies and customers are difficult for competitors to sever. The internalized meaning and value that the clues assume can create a deep-seated preference for a particular experience & #8212; and thus for one company’s product or service over another’s. The authors explain the tools that are available to help organizations rethink the signals they are sending to customers. They also show how the tools work in practice by presenting two case studies in which organizations dramatically improved their customers’ experiences.

The information age has created a host of digitized products & #8212; in the realms of software, databases, music, videos and electronic books & #8212; for which the potential for piracy, defined as duplication and distribution of a product without the permission of or payment to the content owner, is extremely high. Up to now, efforts to control piracy have been primarily legal in nature, relying upon the assumption that creators of digital products have absolute ownership rights to the content they create. Under the same assumption, companies have also sought to limit piracy with technological safeguards such as click-wrap contracts, encryption, password-limited access to distribution sites and copy proofing. However, say the authors, the belief in absolute ownership of digital content is incorrect from a legal standpoint, and antipiracy tactics that rely upon it will ultimately prove ineffective. What’s more, these tactics may even reduce authorized usage by paying customers. A far better solution, the authors suggest, is to recognize the dynamics of the marketplace, segment that market into innovators (potential pirates) and the mainstream (potential paying customers), and address each segment differently to gather information and establish market leadership. The authors use a variety of cases to illustrate the tactics whereby content creators can coexist with the innovator segment of their audiences while still controlling product price and distribution standards. The key to setting an effective, “priced” value proposition for majority users lies in incorporating the innovator’s technology before it reaches the mainstream. In such a scenario, brand identity encourages the majority to recognize quickly the content provider as the standard source for the product. Brand strength is then enhanced through fair pricing, product enhancement and superior distribution mechanisms.

If pricing isn't a strategic capability — a contributor to a company's ability to implement its strategy — it's probably a strategic liability.

Over the past couple of decades, management innovations have pushed companies toward the ideal of the “boundaryless” organization. As a result of these changes, formal reporting structures and detailed work processes have a much diminished role in the way important work is accomplished. Instead, informal networks of employees are increasingly at the forefront, and the general health and “connectivity” of these groups can have a significant impact on strategy execution and organizational effectiveness. Many corporate leaders intuitively understand this, but few spend any real time assessing or supporting informal networks. And because they do not receive adequate resources or executive attention, these groups are often fragmented, and their efforts are often disrupted by management practices or organizational design principles that are biased in favor of task specialization and individual rather than collaborative endeavors. The authors initiated a research program two years ago to determine how organizations can better support work occurring in and through informal networks of employees; they assessed more than 40 networks in 23 organizations. They discovered in all cases that the networks provided strategic and operational benefits by enabling members to collaborate effectively; they also found that managers, if they truly wanted to assist these groups, had to overcome six myths about how networks operate. In this article, the authors explain the six myths and why they are harmful; in place of these assumptions, they offer reality checks that can be implemented to help networks become more effective. Senior managers who can separate myth from reality, and act accordingly, stand a much better chance of fostering the growth and success of these increasingly important organizational structures.

Traditional teams are not faring well in today’s rapidly changing business environment. Even when they establish clear roles and responsibilities, build trust among members and define goals according to the book, their projects often fail or get axed. Three MIT Sloan School researchers think they have found the reason: Traditional teams are too inwardly focused and lack flexibility. Traditional team-building activities are still important, they contend, but only when combined with a greater awareness of external stakeholders and information sources. Fortunately, a new, externally focused team has arisen: the X-team. The authors detail the high levels of performance that X-teams are seeing. And they explain how managers in a wide variety of industries and functions can establish the organizational structures that support such teams. The researchers outline the five components of X-teams they have studied: external activity, extensive ties both inside the larger organization and outside the company, expandable tiers or kinds of responsibility, flexible membership (switching roles, moving in and out of the team as needed) and execution mechanisms that facilitate getting the job done. The results are impressive. One observed X-team greatly improved the dispersal of innovation throughout its organization. X-teams in sales were seen to bring in more revenue. Drug-development teams were more adept at drawing in external technology. Product-development teams were more innovative than traditional teams & #8212; and more often on time and on budget. Managers that recognize their own company in the new, flatter organizational structures, the increasing interdependence of tasks and teams, the constant updating of information and the overall complexity of work should consider creating an environment for successful X-teams.

Platform leadership is the ability of a company to drive innovation around a particular platform technology at the broad industry level.

Strategy is increasingly a moving target. And despite strategists’ and technologists’ recognition that developing a productive relationship is critical, it’s been hard to build a technology platform to support visions based on capabilities that may or may not exist. Fortunately, say researchers from the University of Oxford and the Warwick University Business School in England, a few enterprises are showing how to successfully bridge the great divide. Chris Sauer and Leslie Willcocks surveyed CEOs and CIOs at 97 companies that had moved or were moving to e-business. As the companies shrank their development and planning cycles, the gap between strategists and technologists grew. But in a few enterprises, the authors spotted inspired players they call “organizational architects.” These leaders were generally technology-smart CEOs or business-savvy CIOs who developed mechanisms to force communication between strategists and technologists. The success stories point to the value of companywide transformation, with organizational architects guiding the translation of strategy to a flexible, integrated platform. Dialogue between strategists and technologists makes it possible to define and design structures, processes, capabilities and technologies that have a greater chance of being responsive to organizational goals. In true synergy, the platform is shaped by the vision, and the vision is reshaped by the characteristics of the platform that enable the vision. How do organizational architects keep business and technology concerns united? They view technology and organization as equal influences; they standardize and centralize; they manage change intelligently; and they match capability and ambition. Companies such as Oracle, IBM, the utility Citipower and the investment bank Macquarie (the latter two in Australia) have already strengthened their business-technology alignment by applying one or more of these principles.