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All companies would like to offer custom products that delight their customers. For many, the challenges seem overwhelming, and they settle for manufacturing standard products in bulk, guided by long-term forecasts. Because demand is rarely forecast correctly, companies miss potential sales and must pay to store and manage excess product. In an effort to purge inventory, they offer discounts and other incentives. Profits erode, and the companies lose sight of what customers really want. Some companies attempt to offset those effects by optimizing pieces of the value chain. They create island solutions, such as lean factories, believing that such initiatives will make them more responsive. The authors argue that those efforts ultimately fail because they are not customer- centered. Citing results from their research, sponsored by the 3DayCar Programme at Cardiff Business School in Wales and the International Motor Vehicle Program at MIT, they show that island solutions sometimes backfire because they degrade other parts of the value chain. Instead, they urge companies to aim for a true build-to-order strategy, in which managers systematically improve the value chain’s flexibility in three areas: process, product and volume. Because the emphasis at each stage is on how to meet customer demands efficiently, optimization becomes more holistic and ultimately more profitable. To improve process flexibility, companies can link customer requirements directly to production, synchronizing customer-oriented production schedules in real time with suppliers. To improve product flexibility, they can push customization closer to the customer and can use common support structures to reduce the impact of product variety. To improve volume flexibility, the authors suggest ways companies can reduce reliance on full capacity or use differentiated pricing to reward customers for ordering products well in advance. The authors urge managers not to settle for halfhearted transitions to build to order. They recommend two critical first steps: First, understand key aspects of customer demand; second, adjust all processes accordingly. Only then can companies truly implement responsiveness across the value chain.

Analyzing factors behind generative AI’s value can help leaders determine who will benefit most from its growth.

Four key steps can help a new initiative create value for both the company and the public.

Several organizing principles can help companies sustain both profitability and a sense of purpose.

New research finds that investments companies make in information technology increase profitability and sales more than investments in advertising or R&;D do.

Jonathan Byrnes offers techniques to improve your organization's profitability.

Sellers know things about their customers' businesses that the customers don't know and can't find out on their own yet value immensely. Because they come into contact with many and varied buyers, sellers have a bird's-eye view of the forest -- the industry's competitive landscape -- in contrast to customers, who often see only the trees. And they can use their wide range of experience to teach customers about their own businesses. This isn't a matter of divulging confidential aspects of clients' businesses to their competitors. The challenge is to translate an industrywide perspective into knowledge that customers can use. Companies that can do that successfully reduce their customers' costs or operating risks and are rewarded in turn with customer loyalty, pricing flexibility or both. The authors lay out three strategies that companies can adopt to turn a view of the forest into value for customers and competitive advantage for the business. They also explain the steps companies should take to collect, aggregate, adapt and share customer experiences.

Sustainability is the buzzword du jour, but how do you actually go about achieving it? Well, it’s clear there isn’t a one-size-fits-all strategy. Look at five companies, and you will see five different paths, each particular to a specific company’s market and problems. Take Nike Inc., whose brand is synonymous with cutting-edge design. Redesigning the athletic shoe to cut down on material became a core element of its approach to reducing waste. But what works for Nike might not exactly work for a company like start-up electric vehicle supplier Better PLC, LLC, which is rolling out electric car recharging stations. How does it pursue sustainability? By identifying the countries most receptive to its cutting-edge idea. General Electric Co. takes yet another approach, seeing sustainability not only as a cost-savings measure within the company (cut energy use, and emissions and costs go down) but also as a solution to sell to other companies–hence, its $17 billion ecomagination unit. Mining giant Rio Tinto, in turn, looks at it through a social lens, while Wal-Mart Stores Inc. sees sustainability as a challenge to revamp the practices of its more than 100,000 suppliers. In short, sustainability is less a target than an approach, which is why it is continually being refined. As companies ramp up understanding, they also push the envelope of what can be accomplished. Though it takes investment and commitment, the rewards are seen in cost savings, new products, customer engagement and employee commitment. In this way, sustainability becomes a competitive advantage.

Current models of organizational strategy and structure fail to meet the challenges of the information age. Based on field study, the authors conceptualize an architecture, or guide, for virtual organizing that focuses on the importance of knowledge and intellect in creating value. Information technology lies at the heart of this business model for the twenty-first century. The authors' approach incorporates three interdependent vectors: customer interaction deals with new challenges and opportunities for company-to-customer interactions; asset configuration focuses on creating and deploying intellectual assets while sourcing physical assets from a complex business network; and knowledge leverage is concerned with opportunities for leveraging diverse sources of expertise within and across organizational boundaries. Each of the vectors in turn has three stages. Stage one focuses on task units such as customer service, purchasing, or new product development. Stage two focuses on coordinating activities to create superior value. Stage three focuses on the interorganizational network to design and leverage interdependent communities for innovation and growth. Each vector raises a distinct series of questions for managers. The overall challenge for companies is to harmonize the three vectors and to undertake external benchmarking when experimenting with different approaches to design.

Composing valuable strategies requires seeing the world in new and unique ways. It requires asking novel questions that prompt fresh insight. Even the most sophisticated, deep learning-enhanced computers or algorithms simply cannot generate such an outlook. Innovative strategies depend more on novel, well-reasoned theories than on well-crunched numbers.