Search Results

INTELLIGENCE: RESEARCH BRIEF: Vigilance is the key to avoiding potential organizational nightmares.

How a textile manufacturer balances cost cutting with mass customization in its domestic facility.

In an attempt to increase both efficiency and service quality, more and more companies are outsourcing to third-party suppliers some key business processes, such as human resources, information technology and procurement. The universe of potential suppliers is diverse and growing, made up of locally based specialists, offshore providers with comparatively low labor costs, and global suppliers who are able to apply sophisticated management techniques and technology. The challenge for clients is to understand their own requirements and to identify providers whose capabilities and objectives are best aligned with their particular needs. Drawing on extensive research, the authors identify three potentially critical areas of supplier competency: delivery competency, transformation competency and relationship competency. Within that context, they discuss 12 capabilities through examples drawn from the outsourcing experiences of firms such as BAE Systems, Lloyd's of London, Deutsche Bank and Bank of America. By benchmarking supplier capabilities against its strategic and operational intent, a company can work to establish relationships that support its business objectives.

People categorize themselves on the basis of demographics, social roles and shared consumption patterns, and these various identities are both numerous and fluid, changing over an individual's lifetime and across situations. That fact is not fully recognized by traditional demographic and psychographic techniques, and the labels that consumers use to define who they are do not necessarily correspond to the variables that marketers typically rely on. A new approach -- identity marketing -- better captures the complex process of how people's sense of who they are influences their purchase decisions. To be sure, the complexity of identity-based judgments presents both opportunities and obstacles for marketers, but companies often fail to appreciate this. In fact, many marketing blunders can be traced back to a fundamental misunderstanding of customer identity. Common mistakes include the following: (1) selling new products solely on their features, (2) failing to solidify first-mover advantage, (3) fighting the competition head-on, (4) sticking with what's worked before, (5) underestimating low-involvement products, and (6) attacking negative word-of-mouth. Identity marketing helps companies avoid such mistakes by providing a deeper understanding of how customers become strongly attracted to the brands and products that are linked to their multiple -- and sometimes seemingly contradictory -- identities.

All executives have two basic drives: to add value to products or services, and to deploy resources with a certain amount of efficiency. The first drive can be inferred by a business's gross margin and the second by its relative indirect expenses. Together, the two numbers constitute an executive's "financial signature." There are four extreme categories of signatures: (1) gross margin and expenses are both high, (2) high gross margin and low expenses, (3) low gross margin and high expenses, and (4) gross margin and expenses are both low. The categories are labeled "venture capitalist," "buccaneer," "mercantilist" and "discounter," respectively, and each has a characteristic set of financial behaviors. Certain financial signatures are best suited for particular industries. Mercantilists, for example, are ideal for commodity markets with high fixed costs. Moreover, companies might need executives with different financial signatures at various stages in their life cycle. A startup, for instance, might be better off with a venture capitalist at the helm. Later, that same firm might need to fill its executive suites with discounters. No matter how capable the leader, a mismatch between an organization's requirements and the actual financial signature of its CEO can lead to management problems, possibly even to company failure.

Corporate social responsibility has become a vital part of the business conversation. The issue for most companies is no longer whether to engage in socially responsible activities but how to achieve the maximum benefit from the resources available for social projects while still increasing shareholder value. In this article, the authors draw on years of quantitative and case-based studies of major corporations to conclude that CSR activities work best for society and the corporate participants when they are managed strategically and in collaboration with an array of commercial and noncommercial partners. The authors cite exemplars such as Avon Products, whose name is synonymous with responses to women's healthcare issues, and The Home Depot, whose foundation involves suppliers and government agencies in large-scale efforts to combat housing problems in the United States. The authors point to five core principles behind effective CSR strategies, from the need to contribute "what we do" to the importance of accommodating government's regulatory and taxation influences.

On the basis of two different studies -- a survey of CIOs at 256 enterprises in the Americas, Europe and the Asia/Pacific region and a set of 40 interview-based case studies at large companies such as Johnson & Johnson, Carlson Companies, UPS, Delta Air Lines and ING DIRECT -- the authors conclude that when senior managers take the time to design, implement and communicate IT governance processes, companies get more value from IT. Toward that end, they offer a single- page framework for designing effective IT: a matrix that juxtaposes the five decision areas (principles, architecture, infrastructure, business-application needs, and prioritization and investment decisions) against six archetypal approaches (business monarchy, IT monarchy, federal, duopoly, feudal and anarchy). The authors illustrate how successful companies use different approaches for different decisions to maximize efficiency and value for both IT and the overall enterprise. They then offer recommendations to guide effective IT governance design.

RESEARCH BRIEF: Emerging supply-chain e-technologies provide opportunities for growth "Ò

How do managers and companies quickly transform new hires into productive employees, a process called "rapid on-boarding"? The authors contend that companies that are more successful at rapid on-boarding tend to use a relational approach, helping newcomers to rapidly establish a broad network of relationships with coworkers that they can tap to obtain the information they need to become productive. Most organizations realize the importance of integrating new employees, but many fail in this regard, often because of five pervasive myths about the process: (1) the best newcomers can fend for themselves, (2) a massive information dump allows newcomers to obtain what they need, (3) cursory introductions are all that's needed, (4) first assignments should be small, compact and quickly achievable, and (5) mentors are best for getting newcomers integrated. Because of those misconceptions, managers will frequently rely on certain taken-for-granted practices that can actually hinder new employees from becoming productive.

The good word from devoted customers may not always be the most effective promotional tool.