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Most executives today recognize that their organizations’ ability to manage knowledge effectively is a strategic imperative. Just how they should go about developing that ability is the challenge. As in most other areas of management advice, there is no shortage of useful frameworks, models and checklists to choose from. Unfortunately, these solutions are generally presented as applicable in any and all situations, and managers are left to make their own mistakes as they use one tool or another to limited effect. Executives can begin to take a more effective approach if they realize that knowledge has a life cycle. Over the course of a five-year study, the authors have devised a model to help explain the life of an idea in commercial settings. The model shows that new knowledge is born as something fairly nebulous and that it takes shape as it is tested, matures through application in a few settings, is diffused to a growing audience and eventually becomes widely understood and recognized as common practice. In this article, the authors develop the concept of the knowledge life cycle in detail and then describe the appropriate strategies for managing ideas at each stage of the cycle.

Partnering with outsiders to speed innovation is increasingly the norm among high-tech companies. Then why are so many organizations still struggling to make such efforts work? The answer, say MIT Sloan School professor of management Edward B. Roberts and management consultant Wenyun Kathy Liu, is that all too often companies choose collaborative strategies without first considering what stage in the technology life cycle a given technology has entered & #8212; and which type of partnership is suited best to that stage. There are four phases in the life cycle of a technology (the fluid, the transitional, the mature and the discontinuities phases), and depending on where a particular technology is at the moment, only certain external partnerships will facilitate speedy development. That reality presents a challenge for managers: Each product a company is juggling may be in a different phase, and because the partnerships developed for one phase of one technology could eventually serve a different purpose in another phase of another technology, all partnerships must be handled with care. A decision to ally or acquire depends not only on company-specific competencies and needs, but also on overall market development and the company’s position relative to its competitors. Industry structure and critical success factors change as the underlying technology evolves and as competitive pressures vary. Companies are more inclined to form alliances as the technology becomes better defined and as competitive pressure increases. In the discontinuities phase, consolidation increases and the number of alliances declines. As for mergers and acquisitions, they often happen more frequently during the transition stage because established companies acquire startups to enhance their technology portfolio. In broadening past research (on the technology life cycle’s effect on internal product development) to encompass the externally focused technology life cycle, the authors also have underscored the growing complexity of achieving business success. The implication for management in high-tech industries is that leaders need to excel at multitasking, thinking laterally, thinking creatively and networking with individuals in various related industries. But all that starts with understanding the technology life cycle and what it means for outsourcing innovation.

Companies that heavily invested in Internet technologies are having second thoughts. They are realizing that the IT structure must mesh with business goals and be flexible enough to launch applications in months, sometimes weeks. Traditional IT models that emphasize back-office functions, yearlong development cycles and a separation of tasks are outmoded. Michael Earl and Bushra Khan of the London School of Business surveyed 24 companies engaged in e-commerce in the United States and United Kingdom and found that IT perceptions and practices are evolving rapidly. They also discovered marked differences in the way established brick-and-mortar companies, dot-com startups, and e-commerce boutique companies and spinoffs see the IT function. Today, companies recognize that IT can make or break the business. The separation between IT and “the business” is disappearing. Past IT models that focused on engineering, best practices and disciplined processes have given way to an enhanced spirit of freedom. Another shift relates to cost. Companies that once installed detailed IT cost metrics now perceive time, not cost, as the currency. The speed of decision making, applications development, design changes, implementation and technology adoption drives today’s IT function. Those changing perceptions manifest themselves in new practices. Short-term, rolling plans are replacing long-term strategies. Uniform technology platforms are ceding place to three-tier architecture: two tiers connected by middleware (for translating data messages between the two layers, for storing processing logic and data-handling subroutines, and for establishing a gateway between ephemeral systems and more-permanent ones). A new-venture outlook is widespread & #8212; and an aggressive use of short time spans. Some companies reported that they would not undertake any project likely to last more than three months. Also, companies are simplifying project management & #8212; even eliminating the use of project managers. Of those practices, rolling plans, new-venture development, three-tier architecture and multidisciplinary teams are key: the first two addressing faster development; the second two, the tensions between technological excellence and business value.

The quest for competitive advantage often inspires executives to imitate the strategies of the most successful companies. Interestingly, however, precisely opposite factors are considered sources of competitive advantage at different points in time. Henry Ford's emphasis on focus has been touted as the key to success right alongside General Motors' product-line breadth. IBM's vertical integration was considered an unassailable source of competitive advantage a generation ago; today, everyone admires the outsourcing flexibility inherent in the nonintegrated business models of Cisco Systems and Dell Computer. But strategists whose anecdotal understanding of competitive advantage runs only as deep as "If it's good for Cisco, it must be good for everybody" are likely to succeed only in building yesterday's competitive advantages. If history is any guide, the practices and business models that constitute advantages for today's most successful companies confer those advantages only because of particular factors at work under particular conditions at the particular time. Harvard Business School's Clayton Christensen, a leading thinker on disruptive technologies, alerts managers to the imperative of understanding the context that supports a particular competitive advantage. He explains why, for example, pharmaceutical companies' current focus on ever larger mergers is moving them in exactly the wrong direction at exactly the wrong time. He blames their strategists (and investment bankers) for not thinking deeply about cause and effect in competitive advantage. He also notes that the very existence of competitive advantage sets in motion creative innovations that, as competitors strive to level the playing field, cause the advantage to dissipate. That does not mean the search for competitive advantage is futile. Rather, it suggests that successful strategists need to cultivate a deep understanding of the processes of competition and progress and of the factors that undergird each advantage. Only then will they be able to see when old advantages are poised to disappear and how new advantages can be built in their stead.

Companies lose money because they treat pollution control and plant operations as separate concerns. But it costs less in the long run to make plant managers true partners.

Most large corporations developed in an era of abundant raw materials, cheap energy, and limitless sinks for waste disposal. It has become increasingly clear that many technologies developed during this earlier period contribute to the destruction of the ecological systems on which the global economy depends. In the absence of dramatic change, few would dispute that the world is destined to devolve toward environmental degradation, social upheaval, and mass migration. Hart and Milstein argue that the emerging challenge of global sustainability will catalyze a new round of "creative destruction" that innovators and entrepreneurs will view as one of the biggest business opportunities in the history of commerce. In this article, the authors propose a framework to help managers look beyond continuous, incremental improvement of existing products and processes to see the business world differently and make sustainable opportunities more apparent. To better understand sustainability-driven creative destruction, managers must evaluate business opportunities on the basis of three types of markets or economies that exist in all countries or geographical regions: developed (nearly 1 billion global customers), emerging (estimated at roughly 2 billion people), and surviving (roughly half of humanity or 3 billion customers). The authors discuss the different strategies required to achieve sustainable development in each economy. To compete in the consumer economy, managers must focus on reducing the life-cycle ("cradle to grave") impacts -- that is, the "ecological footprint" of their firms' activities -- by reinventing their products and processes. The combination of large footprint and technological maturity widens the gap between price and life-cycle cost, producing the technological and environmental forces that drive creative destruction. Because it is unlikely that senior managers will commit resources without a clear understanding of how sustainability-driven creative destruction can improve a firm's economic payoff, the authors offer ideas for sustainability metrics tied to the three economies discussed and show how they relate to key business and financial payoffs. Managers who treat sustainable development as an opportunity will drive the creative destruction process and build the foundation to compete in the twenty-first century.

Understanding technical complexity is intrinsic to developing effective strategies for managing factory operations. The practices that the author observed during a three-year study of ten color picture tube factories highlight two contrasting forms of managing processes -- the control method (suitable when most contingencies are anticipated and the organization can be structured clearly) and the learning method (suitable when problem recognition, definition, and solution are likely to differ for every situation). Detailed survey data from fifty-four of sixty-three existing color picture tube plants also augment the author's in-depth case studies. Factors relevant to effectively managing production in a factory are logistical complexity (a high volume of transactions or tasks) and technological complexity (the inherent intricacy of the system and its technologies). This paper focuses on the special dictates of technological and process complexity that strain traditional information and process-control systems. A hybrid of flow/assembly and continuous processes, color picture tube manufacturing consists of 200 key production steps, involving more than two dozen process technologies -- chemical, electrical, optical, and mechanical. At the best-performing factories, appropriate problem-solving techniques, experiment-based learning methods, and organizational procedures for routine tasks aid in managing this complexity. Complex processes need "generalist engineers" who are knowledgeable about engineering functions and processes beyond their usual domains. Emphasis shifts from "local" process control to "process-wide" management -- managing process interactions and sharing and coordinating information from different processes. Company policies and incentives to develop problem-solving capabilities, acquire detailed engineering knowledge, and hone the analytical skills of workers are critical to the effective functioning of these complex operations. Adopting learning-based methods of process management promotes an organization's ability to create, acquire, process, and retain new knowledge in an era of increasing complexity and uncertainty.

Existing management frameworks do not describe all the ways that companies are competing successfully today. When queried, senior executives concurred that conventional theories and business practices do not provide the necessary guidance and support for decision making in a world of change, complexity, and uncertainty. The authors' research on more than 100 companies is the basis of their Delta model which (1) defines strategic positions that reflect fundamentally new sources of profitability, (2) aligns these strategic options with a firm's activities and provides congruency between strategic direction and execution, and (3) introduces adaptive processes capable of continually responding to an uncertain environment. They describe three strategic options having three distinct economic perspectives -- best product, customer solutions, and system lock-in. These strategic options provide a mechanism for defining the vision of a business. Outstanding real-life business successes achieved through strikingly different strategies and drawn from fundamentally different sources of profitability illustrate the nature of these strategic positions. The Delta model links strategy with execution by selecting a distinctive strategic position and then integrating it with a company's collective processes. The authors identify three fundamental processes that are always present and are the repository of key strategic tasks: operational effectiveness, customer targeting, and innovation. Strategy must adapt continuously, and implementation must respond to market changes and to greater understanding of the market that becomes apparent only during implementation. A firm's actions must be aligned with its strategic position, and the results must give feedback for adapting the strategy. The authors outline common responsive mechanisms for obtaining feedback from the adaptive processes and suggest metrics that are essential to adaptation. To anticipate the future, it is necessary to track performance against the adaptive processes, which are the initiatives enabling the strategy. The Delta model provides a rich overall framework that integrates a firm's options and activities without running the risk of oversimplifying the context in which it makes decisions.

Global business today requires leaders to be like explorers, guiding their organizations through unfamiliar and turbulent environments. With markets, suppliers, competitors, technology, and customers around the world constantly shifting, traditional leadership models no longer work. The authors' three-year study across Europe, North America, and Asia indicates that companies seek more global leaders and desire future global leaders of higher caliber and quality. To achieve these goals, organizations must understand the characteristics of global leaders and what they can do to develop these leaders. The research results reveal that every global leader needs certain core qualities: exhibiting character, or the capacity to build relationships with people from different backgrounds and to act with high ethical standards; embracing duality, or knowing when and whether to act and initiate change, depending on country or region; and demonstrating savvy, or recognizing worldwide market opportunities and understanding firm capabilities. Underlying each of these characteristics must be inquisitiveness -- a sense of adventure and a desire to experience new things. The authors' research further shows that global leaders are born and then made. Four strategies are particularly effective in developing global leaders: foreign travel, with immersion in the country's way of life; the formation of teams in which individuals with diverse backgrounds and perspectives work together closely; training that involves classroom and action learning projects; and overseas assignments, which serve to broaden the outlook of future global leaders.

The authoråÊdiscusses how to improve strategy making.