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Many managers in traditional product-oriented organizations are struggling to turn their companies into solutions-oriented businesses, widely considered the route to success in the 21st century. A good shortcut may be to establish corporate consultancies & #8212; consulting units that offer customers solutions based on the traditional business’s products or expertise. Thus computer companies such as IBM are moving toward integrated information-technology solutions, and telecom-equipment manufacturers such as Nokia are providing turnkey network solutions. Changing from a product-oriented manufacturer to a customer-focused solutions provider can be rewarding, but because it involves a sweeping reorientation of the organization, it is also difficult. That’s why the less radical approach of a consultative component often works best. But even that strategy has its challenges, with success depending on determined managers who know what the pitfalls are and how to avoid them. Without firm management, the consultancy may be swept away by forces that draw it too far into the product business or too far away from it. By thinking through the mission, identity and structure challenges and choosing the right strategy for handling them, leaders can both manage the consultative component and attain synergies between the product-centric business and the corporate consultancy’s customer solutions.

Are Japanese companies ending their practices of lifetime employment and seniority-based pay, as the popular press has reported? Data from published Japanese surveys offer insights into three key issues: Are Japanese employment practices changing? While changes are taking place, they are limited to seniority-based pay and promotion; lifetime employment remains intact in most large companies. The seniority system is gradually being replaced by a new job performance-based pay system that companies are using to raise white-collar productivity. Most companies plan to retain the lifetime employment system, the benefits of which outweigh the costs. Why are employment practices changing? In the 1980s and 1990s, internal and external factors placed pressure on large firms to change the seniority system. Internal factors include falling profit margins, decreases in white-collar productivity, an aging workforce, and changes in employee attitudes toward work and the seniority system. External factors include the maturing of the Japanese economy, a decline in large Japanese companies' international competitive position, and increasing internationalization of Japanese companies' operations. What are the implications of changes? Given the trends in Japanese employment practices, Western competitors should expect the following: a continuation of Japanese companies' market growth strategy with minor adjustments; innovative products and services as well as marketing and partnering strategies coming from Japanese companies; a resurgence in Japanese firms' competitiveness and productivity levels; increasing opportunities to enter into Japanese keiretsu networks as suppliers; and continued fierce competition in local Asian markets and lower prices from Japanese competitors in more mature product sectors as they move them increasingly to overseas production. The examples of Honda, Fujitsu, and Sony, three firms that revitalized themselves through use of performance-based pay systems, product innovation, and new partnering strategies rather than through layoffs of core employees, suggest that while change will be gradual, most large companies will eventually follow in the same direction.

Corporate America has spent the last few years in restructuring mode, drastically reorganizing processes in order to wring profits from a battered economy. However beneficial these efforts may be to the bottom line, say the authors, a reliance on restructuring has had unintended negative side effects, as hierarchies that once controlled the direction of many companies become less relevant, and loyal employees become increasingly disheartened by disruptive -- and often short-sighted -- strategies. In response, companies resort to even more restructuring, frequently with less than optimal results.The authors recommend that companies shift away from knee-jerk responses such as restructuring and hierarchy building toward a transformation of established corporate structures, a wider distribution of knowledge, and the use of modern performance-measurement systems and technologies. Citing examples at BP, North Carolina's Duke Power and W.L. Gore, the authors claim that only companies developing their advantage upon the agility and flexibility of their processes, people and technologies can build lasting value for their company, customers and employees.

In the New Economy, speed is everything, as both start-ups and traditional businesses attempting new ventures have experienced. Three Andersen Consulting researchers assess a new approach, fast venturing, which taps operational partners -- incubators or professional-services firms -- as well as outside investors. Operational partners, called in at various stages of the venture's development, can offer support with whatever specific skills are needed at any given time. The author's e-mail and telephone surveys of companies that have launched ventures quickly suggest that new ventures should (1) set up a distinct equity structure, (2) get participation from financial partners, and (3) call on a network of operational partners to help build the business quickly by designing and implementing strategies and processes to access markets at scale. Using outside partners is more promising, say the authors, than creating new ventures inside an established company, where too often, strong incentives are lacking and company traditions or politics get in the way. Although internal venturing might work in a few companies, the strategy is probably too difficult and too slow for most. The authors describe a three-stage model: developing ideas, lining up support and scaling up quickly. They suggest choosing a lead partner by assessing both existing relationships and the venture's needs at its particular stage of development. At a pre-funded stage, the venture requires investment partners. If the venture is farther along, it might need a lead partner that can provide temporary managers, experienced in setting up warehouses, or a multitude of other critical functions. The authors provide managers with a list of questions that can help identify the critical capabilities needed to ensure speed to market and help them decide if they should fast venture. Then a step-by-step process helps companies define the venture's most urgent requirements; select appropriate, committed partners; clarify roles and responsibilities; and tap strong, independent leaders. Whether the fast venturing company chooses to partner with an incubator that provides most needs under one roof or a venture network with geographically dispersed support functions, the best chance of success lies with nimble outside partners that have a stake in the profits.

Managers will never be able to predict the future as clearly as The Amazing Kreskin. But by making a deliberate effort, they can develop the clairvoyance they--and those around them--already possess into a potent competitive weapon. Because their antennae are always aloft, executives naturally detect weak signals as they drift in and out of range from the outer edges of their marketplace. How they find, keep and make sense of those faint clues can make all the difference when it comes to getting an early start on confronting a threat or exploiting an opportunity. In this article, the authors draw from their research into companies that learn from the future. They outline the specific skills managers need to develop--and those they had better lose--to correct their fuzzy vision of what's ahead. First, the authors identify the different breeds of biases that most managers don't even realize they have, and provide them with the tools to rout out such distortions. Then they outline nine proven and practical strategies managers can use to find, understand and make use of the most meaningful distant data. Confronting reality isn't as straightforward as hushing hunches in favor of high-minded analysis; there has to be room for both. Finally, the authors encourage executives to consider new information within the context of as many wider views of the future marketplace as they can find--tapping the farsighted folks at their company and in their industry. By learning how to extract meaning, managers will grow to understand that the future is plainly ours to see, no matter what the song says. What takes work is piecing those glimpses into a plausible panorama so that managers can see where their company strategy fits--before anyone else does.

A new way to understand why initiatives succeed or fail can help leaders make better decisions about future strategies.

Accelerating compression of both revenues and profits may rapidly prove fatal to traditional businesses. Consider the accelerating decline of voice calls as a means of communicating via mobile telephone: From 2013 to 2015, average mobile voice revenue per user declined globally by 19%, and a further decline of 26% is expected through 2020. To stave off disaster, incumbents must transform and renew their core operations — while also growing into new businesses and industries.

While the protection of intellectual property, or IP, seems to be at odds with a company's pursuit of open innovation, or OI--the selective use of research carried out elsewhere--businesses in the know can align these two approaches. An appropriate IP strategy can actually be an enabler of OI activities. In fact, an increasing number of companies, such as International Business Machines Corp., are involved in interconnected "ecosystems"--critically dependent on cooperating with other parties to generate innovations and profits. The authors' research has found that the enabling function of IP depends on the specific circumstances under which companies engage in OI. Two variables in particular have emerged as critical determinants: the technological environment in which the business is active, and the knowledge distribution among potential collaborators. Each variable is presented as having two possible values. The technological environment, for instance, is either calm or turbulent. Concerning the nature of innovative knowledge distribution, external knowledge can be thought of as residing either with the few (in puddles) or with the many (in oceans). By combining these two dimension sets, and thus creating four possible scenarios, we provide a better sense of a firm's most appropriate IP/IO strategy. Depending on the category into which the company falls, IP plays a different role as an enabler of OI.

Although researchers have concentrated on various measures of customer satisfaction (CS) and the relationship of CS to firm performance, they have done little to determine what constitutes the best practices of firms focusing on CS as a corporate strategy. These authors report the results of their investigation into the best practices of four manufacturing firms with reputations for delivering high levels of customer satisfaction. They found that, although the firms developed a CS strategy for different reasons, each had similar characteristics that enabled them to concentrate on satisfying the customer. While the firms generally outperformed the average firm in their industry in profits and asset utilization after adopting a customer satisfaction strategy, they were not as successful in increasing market share; nor has the market valued them as highly as it has valued others in their industry. Finally, the authors suggest ways companies can improve their customer satisfaction measures and practices.

In business and in personal life, people look for easy solutions to solve complex problems. Unfortunately, most quick fixes don't work because the problem is rarely fed by a single cause. If you want to confront persistent problems, the authors argue, you need to apply several different kinds of influence strategies simultaneously. Their approach is based on three separate studies -- two examining organizational issues within companies and a third exploring destructive individual behaviors such as smoking, overeating and excessive alcohol use. The authors document the success of this multipronged approach across different problem domains (from entrenched cultural issues in companies to leader-led change initiatives to stubborn personal challenges). They found that those who employed only one influence strategy (for example, managers offered training, redesigned the organization or held a high-visibility retreat) were far less likely to achieve significant results than those who used four or more sources of influence in combination. The same went for those tackling personal challenges. Many had attempted to alter their behavior by using a single approach (joining a gym, following prescriptions in a book or attending Alcoholics Anonymous meetings) -- but nearly all had failed. Using examples from such companies as AT&;T, Lockheed Martin, OGE Energy and Spectrum Health Systems, the authors describe six influence strategies. The first two, personal motivation and ability, relate to sources of influence within individuals that determine their behavioral choices. The next two, social motivation and ability, relate to how other people affect an individual's choices. And the final two, structural motivation and ability, encompass the role of nonhuman factors, such as compensation systems, the role of physical proximity on behavior, and technology. "Too often," the authors argue, "[leaders] bet on a single source of influence rather than tapping a diverse arsenal of strategies. We have learned that the main variable in success or failure is not which sources of influence leaders choose. By far the more important factor is how many."