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A collective corporate memory can permeate processes, products, services and even distributed digital networks.

There’s a great deal of enthusiasm about platform strategies these days. Entrepreneurs pitch their startups as the next Uber, the next Facebook, or the next Airbnb, while executives in established companies are retooling their strategies around platforms to drive growth and compete digitally. But creating a successful platform business is not easy — as economists Richard Schmalensee and David S. Evans explain in this MIT Sloan Management Review interview.

Phil Fernandez, President and CEO, Marketo, interviewed by Renee Boucher Ferguson,, Data Analytics researcher and editor at MIT Sloan Management Review. A serial entrepreneur he's taken two marketing-oriented companies public and is looking to do the same with his current endeavor Marketo president and CEO Phil Fernandez knows a thing or two about social business. Marketo utilizes social media, data analytics and Web site traffic to help companies find prospects, interact with them and ultimately, sell to them. His track record to date is impressive. Since Marketo started in 2006, Fernandez and his team have raised $107 in venture capital (yes, in this climate) earned $33 million in subscription revenue in 2011 alone revenue is expected to double that in 2012 -- and signed more than 2,000 customers, including the likes of Intel, LinkedIn, PayPal and McKesson. As a 30-year veteran in Silicon Valley and the author of Revenue Disruption, a book that outlines strategies for companies to transform their sales and marketing organizations to accelerate growth, Fernandez has seen a few shifts in marketing strategies. He believes we're in the midst of another big one. A shift that has many companies, particularly in the business-to-business sector, caught off guard. "We see it playing out over and over and over again, where social is everywhere in B2B, but a lot of people are in denial," says Fernandez. "They're not quite matching up that all those same themes and trends that are affecting them in their consumer lives, are affecting their businesses, too." In a conversation with Renee Boucher Ferguson, a researcher and editor at MIT Sloan Management Review, Fernandez discussed the changing social business landscape and how companies can start to think about and capitalize on those changes.

For several years now, marketers have been urged to embrace one-to-one marketing and to offer microsegmented consumers customized products and services through targeted outreach. While the "market of one" approach can pay off, says the author, it requires a significant upfront investment, including: implementing customer relationship management software applications; filtering, enhancing and cleaning customer data; and personalizing interactions (e-mail, billing, offers and so on). These activities take time and coordination of multiple parts of the organization (marketing, customer service, sales, information technology), which can be daunting for companies trying to react quickly to a changing environment. In addition, those systems have often produced disappointing results because their use was not well integrated with corporate strategy. Also, micro-marketing strategy, on its own, is too narrow. Companies still need to reach broad groups of people with messages that are not dependent on an individual's decision to open an envelope (whether virtual or physical), pick up the phone or click on a box. But broad-based, broadcast media is ineffective and expensive. Fortunately, there are alternative solutions, such as one-to-one targeting and the broadcasting of 30-second television spots. The author's research on trends in marketing spending and consumer attitudes about advertising reveals four strategies available to companies that want to reach broad groups of people without breaking their marketing budget. The strategies are liberally illustrated with examples of Nike, Microsoft, UBS, Delta, Sony, Procter & Gamble, Citibank, Nextel, Honda, Nokia and McDonald's, among others.

Green marketing has not lived up to the hopes and dreams of many managers and activists. Although public opinion polls consistently show that consumers would prefer to choose a green product over one that is less friendly to the environment when all other things are equal, those "other things" are rarely equal in the minds of consumers. For example, when consumers are forced to make trade-offs between product attributes or helping the environment, the environment almost never wins. And hopes for green products also have been hurt by the perception that such products are of lower quality or don't really deliver on their environmental promises. And yet the news isn't all bad, as the growing number of people willing to pay a premium for green products -- from organic foods to energy-efficient appliances -- attests. How, then, should companies handle the dilemmas associated with green marketing? They must always keep in mind that consumers are unlikely to compromise on traditional product attributes, such as convenience, availability, price, quality and performance. It's even more important to realize, however, that there is no single green-marketing strategy that is right for every company. The authors suggest that companies should follow one of four strategies, depending on market and competitive conditions, from the relatively passive and silent "lean green" approach to the more aggressive and visible "extreme green" approach -- with "defensive green" and "shaded green" in between. Managers who understand these strategies and the underlying reasoning behind them will be better prepared to help their companies benefit from an environmentally friendly approach to marketing.

Most suppliers lack sufficient customer knowledge to implement anything but the most sales-oriented growth strategies and tactics. If they wish to achieve profitable, sustainable growth and a larger share of their customers’ wallets, they need a fine-grained, disciplined approach to obtaining, leveraging and documenting customer knowledge. James C. Anderson of Northwestern’s Kellogg School and James A. Narus of Wake Forest University have been conducting management-practice research with companies that have superior knowledge of their customers and use it to devise and implement focused, inventive strategies that create profitable growth while increasing the value delivered. Using the examples of best-practice suppliers such as Bank of America, Seghers, Technische Unie, KLM Cargo and Telindus, the authors suggest a strategic framework to guide supplier managers in the selective pursuit of a greater share, predicated on estimating the current share of each customer’s business, selecting and pursuing appropriate and inventive opportunities to increase that share, and carefully documenting the profitability efforts. According to Anderson and Narus, building the scope of the market offering, broadening collaboration and using multiple single sourcing each represent ways of growing business share selectively with a customer while improving profitability for both the supplier and customer.

Some business builders in the Internet era have blindly focused on “getting big fast” in the mistaken belief that Metcalfe’s Law applies ad infinitum. The value of a network, in fact, does not increase forever, but there are ways to counteract the forces that put the brakes on network effects.” Around 1980 Robert Metcalfe, the inventor of the Ethernet standard and founder of 3Com, observed that the value of a network increases in proportion to the square of the number of people using it. This observation came to be known as Metcalfe’s Law. It was similar to an idea developed by economists about network effects” & #8212; meaning that some resources become more valuable to a person using them according to the number of other people also using them. At the dawn of the Internet era, network effects became the Holy Grail for many business builders, who wanted to “get big fast” in order to exploit them before the competition did. But Metcalfe’s Law doesn’t always hold, say Harvard Business School professor Andrew McAfee and consultant Fran ois-Xavier Oliveau. As networks become very large, they can fall prey to saturation, cacophony, contamination, clustering and high search costs. Those phenomena mean that larger networks can, in some cases, have less value than smaller ones. The authors have identified several strategies that network builders can employ to maintain network effects or limit their decline. When followed properly, these strategies are more effective than a blind, bigger-is-better approach in which network builders rush to sign up as many users as quickly as possible.

When it comes to combining a high level of customer service with a lean and efficient supply chain, few companies can match Saturn's after-sales service business. According to the four authors (a Saturn manager, a former manager from parent company General Motors, and supply-chain experts from the Wharton School and from Stanford University), Saturn has a twofold source of strength. It has a service-supply-chain strategy that can match the urgency of its customer's varying needs. And it shares both authority and risk with channel partners -- making them more willing to help execute the strategy. The company adopted and continues to refine the concept of jointly managed inventory, a variant of vendor-managed inventory that involves sharing inventory risks with Saturn retailers (dealers). The implications extend beyond the automotive industry: Companies that match their parts-supply strategy to the criticality of the customers need for the part can dramatically improve satisfaction in after-sales interactions. A key difference is Saturn's pull system -- a response to the highly unpredictable nature of parts demand. Saturn does not position inventory in advance on the basis of forecasted consumption but rather replenishes retailer's supplies on a one-for-one basis. The demand-based approach triggers movement of parts down the supply chain. But although Saturn determines what to stock, retailers may counteract the decision. And if a part sits for more than nine months at the retailer, Saturn buys it back. Saturn shares other costs as well. If a part cannot be found through the local retailer pooling groups (a rare event), Saturn bears the cost of the search. Managers in other industries can meet customer's needs efficiently if they align their companies service-network strategies with the urgency of a customers need. The authors show how to do that by plotting a company on a matrix that ties the company's service strategy to criticality (most service strategies are somewhere between centralized and distributed). Saturn's approach has helped it build strong and cooperative retailer relationships that end up benefiting the customer.

Today's vast array of web applications for supply-chain integration, salesforce automation, work group collaboration -- and the sale of everything from equities to automobiles -- makes it perfectly clear that information technology has evolved beyond the role of mere infrastructure in support of business strategy. In more and more industries today, IT is the business strategy. Unfortunately, many CEOs are ill-equipped to manage effectively in the Information Age. The problem has less to do with IT literacy than with a range of behaviors and attitudes that cause such CEOs to shirk their IT responsibilities. By their actions, many CEOs send negative signals about the role of information technology to other leaders in their organization who then repeat the behavior. Companies with such leaders frequently fail to reap business advantage from information technology. The authors describe seven types of CEOs, their behaviors and attitudes toward IT, and explain why all but one are decidedly unfit to lead companies in the Information Age. Only the "believer CEO" is ready to play a constructive role in his or her company's use of information technology. Believers understand that IT enables strategic advantage and demonstrate such beliefs in their daily actions. Believers are involved in IT decision making and are proactive in addressing IT problems and opportunities. They seek advice from a variety of sources, study the IT strategies of competitors, and set examples for others managers in their company to follow. The authors provide many examples of believer CEOs -- John Browne of British Petroleum, Ralph Larsen of Johnson & ; Johnson, Jack Welch of General Electric, Toshifumi Suzuki of Seven-Eleven Japan, and Ian Robertson of Land Rover, among others. They describe how each infused his organization with a positive attitude toward IT and contrast their actions and beliefs with those of the six failing archetypes. They explain how these believer CEOs played a critical role in their corporate IT strategies, how they crafted IT-savvy organizational cultures, and how these actions benefited their businesses. Realizing that many CEOs will see their current attitudes reflected in those of the six failing archetypes, the authors prescribe a variety of methods for leaders to address their shortcomings and master the techniques of believers.

The move from standardization to customization may not be toward pure customization, but what the authors call "customized standardization." Lampel and Mintzberg recount the development of standardized product design, sales, and delivery, starting in 1916. Management thinkers at the time warned against the proliferation of products and against efforts to satisfy customers' needs. Now that new technologies have created more possibilities for custom-tailored products, industries may have gone too far. No one wants to choose among eighty-seven varieties of steering wheels, for instance. The result, according to the authors, is a continuum of strategies, depending on which functions lean to standardization and which to customization. A manufacturing firm, for example, may standardize production but customize delivery or financing. The authors see five categories along their continuum. In pure standardization, there is a dominant design, such as Ford's black Model T, targeted to a broad group of customers. In segmented standardization, products are standardized within a narrow range of features, e.g., cereal brands. Customized standardization implies customized assembly but standardized fabrication, such as a hamburger chain that allows customers to specify preferred condiments. In tailored customization, a product prototype is adapted to a customer's wishes, as a suit is tailored to a customer, but customization does not enter the design process. In pure customization, however, customization reaches all the way to the design, as custom jewelry is made to customer specifications. The authors go on to classify certain industries along the continuum to show how companies adopt the five strategies in practice. Mass industries, like gasoline, tend to lean toward the pure standardization end of the continuum, while agent industries, such as health care, may combine standardized financial transactions with customized medical procedures. Lampel and Mintzberg point out that a dominant trend is toward the middle - customized standardization. They suggest that as firms settle midway between standardization and customization, we will all lose choice as we settle for a package of standardized components.