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- 09/01/13--05:48: _Airbus & Boeing say...
- 09/01/13--05:57: _Researchers Grow Hu...
- 09/04/13--19:28: _Clay Christensen’s ...
- 09/04/13--19:39: _Advertising Symbios...
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- 09/08/13--19:41: _Infrastructure prod...
- 09/08/13--20:09: _5 Ways Mayer's Tryi...
- 09/09/13--02:37: _Are Women Better Le...
- 09/09/13--02:41: _The Succession Woes...
- 09/09/13--02:56: _How You Can Be a Gr...
- 09/09/13--03:17: _Capturing the Value...
- 09/09/13--03:25: _The Right Way To Ex...
- 09/09/13--06:51: _Assad: U.S. does no...
- 09/09/13--08:02: _ZEN AND THE ART OF ...
- 09/09/13--08:11: _FROM OM TO OMG: SCI...
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- 09/10/13--11:05: _Creating Shared Val...
- 09/11/13--19:08: _5 institutional mod...
- 09/11/13--19:19: _Obama Delays Syria ...
- 09/01/13--05:57: Researchers Grow Human 'Mini Brains' 09-01
- 09/04/13--19:28: Clay Christensen’s Milkshake Marketing 09-05
- 09/04/13--19:39: Advertising Symbiosis: The Key to Viral Videos 09-05
- CONCEPT: Make the viewer the center of attention.
EXAMPLE: Old Spice's Twitter campaign . In 2010, Procter & Gamble launched a campaign where Facebook and Twitter users were encouraged to send messages to Isaiah Mustafa, the strapping spokesman for Old Spice who markets the idea that if men can't look like him, they at least can smell like him. The advertising agency Wieden+Kennedy then created and uploaded 185 short videos where Mustafa responded personally to individual Twitter users, a mix of celebrities, politicians, and average fans. Inevitably, they supposedly shared the personalized responses with their social networks, and many of the videos received upwards of a million views each.
- CONCEPT: Offer the viewer privileged access to valuable content.
EXAMPLE: Virgin Atlantic's sneak peek . Also in 2010, members of Virgin Atlantic's frequent-flyer program received an email message with a link to the airline's new commercial on the web. The ad wouldn't air on TV for another week, the customers learned. The airline was giving them the privilege of a sneak peek at the ad—and the privilege of being among the first to share it.
- CONCEPT: Give the viewer the opportunity to communicate his or her values to others.
EXAMPLE: Dove's message about self-image . Two months ago, Unilever's Dove brand uploaded "Dove Real Beauty Sketches," a web-exclusive mini-documentary in which a forensic artist sketches each of several women twice, first based solely on their descriptions of themselves and then based on descriptions from strangers.
- The women are seated behind a curtain, hidden from the artist's view. Side-by-side comparisons of the sketches inevitably reveal that the sketches based on the strangers' descriptions are more stereotypically attractive than the sketches based on the women's descriptions of themselves. The powerful tagline, accompanying a Dove logo: You are more beautiful than you think.
- (Evian's "live young" campaign delivers a similarly positive message—not to mention the fact that dancing babies garner the magic mix of surprise and joy.) "I think of these types of ads as video bumper stickers," Teixeira says. "They let people broadcast their personal values the way a bumper sticker on the back of a car does."
- CONCEPT: Enable the viewer to showcase a badge of honor and relate to tribes.
EXAMPLE: Fiat's rapping mommy . Last December, Fiat UK released "The Motherhood," a hip-hop video in which a British mother raps about the joys and indignities of being a mom. ("I swapped my sexy handbag for a snot-stained sack…") The Fiat 500L makes a cameo appearance, but her life is the focal point. The idea is that moms will share the ad with other moms. "Fiat is not really about mothers, but the company is providing the connection among them," Teixeira explains.
- CONCEPT: Let viewers show off their ability to find strange hidden gems.
EXAMPLE: Blendtec's wacky blender videos . In 2006, Blendtec founder and CEO Tom Dickson launched a series of infomercials where he sticks an object in the company's flagship Total Blender and answers the question, "Will it blend?" Items he has blended in the series include an iPhone, an iPad, a can of Easy Cheese, and a vuvuzela. Unlike many viral ads, this one features the product front and center. Usually that's a turnoff, Teixeira says, but these videos are too fun and unconventional not to share.
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- 09/08/13--19:41: Infrastructure productivity: How to save $1 trillion a year 09-08
- 09/08/13--20:09: 5 Ways Mayer's Trying To Kick-Start The Yahoo! Culture 09-08
- 09/09/13--02:37: Are Women Better Leaders? 09-09
- 09/09/13--02:41: The Succession Woes of the People Picking Microsoft's Next CEO 09-09
- 09/09/13--02:56: How You Can Be a Great Mentor, and a Great Protégé 09-09
- 09/09/13--03:17: Capturing the Value of Synchronized Innovation 09-09
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- 09/09/13--08:02: ZEN AND THE ART OF CONSTRUCTIVE CONVERSATIONS 09-09
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- 09/10/13--11:05: Creating Shared Value at Nestlé 09-10
- 09/11/13--19:08: 5 institutional models for successful housing options in Asia 09-12
- Public housing
- Public private partnership
- Private sector housing delivery
- Rental housing
- Civil society
- Ashraya Nidhi (‘shelter fund’) programme in Madhya Pradesh, India
- Revitalization of the rivers Fu and Nan in Chengdu, Sichuan Province, China
- Private developers build a minimum of three middle-class houses and six basic or very basic ones for every high-cost house, National Housing Policy, Indonesia
- Transfer of Development Rights (TDR) in Mumbai
- 09/11/13--19:19: Obama Delays Syria Vote to Pursue Russian Plan 09-12
Airbus & Boeing say Indian aviation growth story is intact in long term
In their market forecasts last year, Airbus and Boeing had estimated demand for 1,232 and 1,450 planes from India, respectively through the next two decades. However, that was at a time whenKingfisher Airlines was still in service. Also, they had estimated growth in India’s gross domestic product (GDP) at about eight per cent. Similarly, a civil aviation ministry report for the formulation of the 12th five-year Plan (2012-17) had factored in 12 per cent average annual growth in domestic air traffic between 2012 and 2017.
Last financial year, GDP growth slowed to five per cent; this year, it is estimated to grow about six per cent. Domestic air traffic growth, too, is subdued. Analysts and airlines expect growth of about six per cent this year.
Despite the slowdown, aircraft manufacturers remain optimistic. “Our forecasts look at passenger traffic growth through a 20-year period, which takes peaks and troughs into account. This growth is translated into demand for aircraft. India continues to be one of the fastest-growing regions for aviation traffic growth in the world through the next 20 years. So, our forecast for new aircraft in India will not be dramatically adjusted,” Airbus said in an email response.
A Boeing spokesperson said, “Our airline customers have indicated they will continue with their fleet plans. India is projected to have the highest passenger traffic growth in the world. Over the next twenty years, the forecast passenger growth is expected to be driven by an underlying economy with long-term growth projections of twice the world average, supported by continued economic prosperity among a growing segment of the large Indian population, higher discretionary incomes, business progress and easier access to airports.”
Domestic airlines did not respond to emails on the subject. A Jet Airways source said though the domestic market was slow, it could cross-utilise Boeing 737s for international operations. Jet Airways has pending deliveries of 46 Boeing 737s and expects to induct a plane each month through the next three-four years.
It is expected IndiGo would add 50 planes to its existing 70 Airbus A320s by 2017. SpiceJet planned to add eleven Boeing 737s to its 55-aircraft fleet by the end of 2014-15 and was seeking early deliveries, a source said. Though the airline has an option include an additional 15 Bombardier Q400 turbo props to its fleet, it has held back the decision due to subdued passenger demand.
In 2010, the Centre for Asia Pacific Aviation (Capa) had estimated airline traffic in India would touch 450 million (domestic and international) by 2020-21. Capa is set to revise its 10-year India forecast in September. Now, it feels airline traffic at 375-400 million by 2020-21.
“We expect the industry fundamentals to be positive from 2015 due to introduction of Gagan (GPS and geo-augmented navigation system) and the implementation of flexible use of air space, which would reduce fuel consumption. I expect aviation turbine fuel to be given a declared-good status in the next 12-18 months, or key states would reduce sales tax to four per cent, and this would bring very significant cost advantages. The introduction of Airbus A320neos and Boeing 737 Max would further reduce operating costs and the focus on building the ancillary business could create additional revenues of $400-500 million a year in the next two-three years.
“In 2013-14, air traffic is likely to see five-eight per cent growth, buoyed primarily by international traffic. The rising dollar has helped bring down the cost of travel and accommodation in India for foreign travellers. With the continued hammering of the rupee and the Indian economy in deep distress, domestic traffic growth might be nearly flat or in a low single digit,” said Amber Dubey, partner and head (aerospace and defence) at global consultancy KPMG .“Projections for 2014-15 and thereafter would be pure speculation. It depends entirely on the outcome of the 2014 general elections and what the new government does to boost investment, aviation and tourism,” he added.
Researchers Grow Human 'Mini Brains'
Clay Christensen’s Milkshake Marketing
About 95 percent of new products fail. The problem often is th
at their creators are using an ineffective market segmentation mechanism, according to HBS professor Clayton Christensen. It's time for companies to look at products the way customers do: as a way to get a job done.
“THE JOBS-TO-BE-DONE POINT OF VIEW CAUSES YOU TO CRAWL INTO THE SKIN OF YOUR CUSTOMER AND GO WITH HER AS SHE GOES ABOUT HER DAY, ALWAYS ASKING THE QUESTION AS SHE DOES SOMETHING: WHY DID SHE DO IT THAT WAY?”
HIRING A MILKSHAKE
PROVEN SUCCESS AND PURPOSE BRANDING
Advertising Symbiosis: The Key to Viral Videos
“IT TURNS OUT THAT WHILE GETTING PEOPLE TO WATCH AN AD IS ALL ABOUT EMOTION, GETTING THEM TO SHARE IT IS ABOUT THE SENDER’S PERSONALITY.”
TAPPING INTO CONSUMERS' PERSONALITIES
FIVE EXAMPLES OF ADVERTISING SYMBIOSIS
Should Higher Education Be Free?
Infrastructure productivity: How to save $1 trillion a year
The Succession Woes of the People Picking Microsoft's Next CEO
How You Can Be a Great Mentor, and a Great Protégé
Capturing the Value of Synchronized Innovation
For more than 30 years, Intel Corporation and Microsoft Corporation, two technology powerhouses, have closely synchronized many product development and launch activities in one of the most widely recognized corporate alliances. The early success of their collaboration set market expectations for a flow of coordinated semiconductor and software products. In some rapidly growing industries such as mobile telecommunications, such synchronization is more extensive, permeating the product development moves of dozens of young companies at once.1
Intercompany synchrony in product development and innovation is hardly new, and some research has shown that synchrony can generate performance benefits for companies. However, prior research largely centered on the relationships between two companies rather than examining how synchrony emerges in broader industry networks or how individual or pairs of companies could capture the value of synchrony in different industry networks. (See “About the Research.”)
For example, it is relatively common for companies to coordinate their product development efforts in hopes of generating increased sales and customer satisfaction. Yet while some businesses work hard to synchronize their product development processes with other organizations, others are significantly less formal about how they tie in with outside entities that are involved with related products or synchronize unwittingly with companies in their network.
Synchronization can take a number of forms, and the implementation costs vary widely. Moreover, keeping part of one company’s operations synchronized with those of another organization can present substantial challenges involving control. Such challenges are magnified when capturing the benefits of synchrony depends on many other players in the industry network. Understanding what it takes to coordinate critical activities across industry networks can therefore be extremely helpful, particularly in technology-intensive industries, where innovation is distributed and companies are strategically interdependent.
ABOUT THE RESEARCH
This article is based on research that explores how established organizations in the computer industry collaborate in developing a multitude of innovative products. Although there has been much research on the structural features that support innovation (longstanding relationships between partners, alliance contracts, etc.), there has been little about the strategic approaches and organizational processes that facilitate collaborative innovation in interorganizational relationships. My underlying research is a study of eight technological collaborations between 10 companies.
Synchrony’s Role in Distributed Innovation
In industries where innovation is highly distributed, companies often attempt to gain market advantages by coordinating their product introductions with those of other companies. Such advantages are frequently sought in technology-oriented sectors, where the benefits of product and component compatibility are obvious. For example, Sony Corporation and Microsoft, leading manufacturers of video game consoles, often try to coordinate product releases with game manufacturers such as Electronic Arts. Sony’s and Microsoft’s video game consoles generate little consumer interest unless they are paired with new games or rereleases of popular older games. As long as the products provide some complementary value when customers use both, synchronized product releases by different companies can increase customer satisfaction and stimulate joint sales.2
Although synchronization is common in industries where complementary products create value, it is also widespread in industries with highly complex products, such as the aerospace and medical diagnostics industries, where distributed innovation is the norm. A magnetic resonance imaging machine, for example, might be designed, manufactured and marketed by one company, but it is often built from subsystems and parts designed and manufactured by a variety of suppliers. Likewise, sophisticated aircraft are made of components developed by outside suppliers. Indeed, some analysts have suggested that Boeing’s 787 Dreamliner’s highly publicized battery problems reflect the challenges of aligning the safety and testing procedures of outside suppliers with those of the integrating manufacturer. The design, testing, production and delivery of components would align perfectly in the ideal world, enabling a manufacturer to release its product on schedule with no quality issues. However, experience shows that this is easier said than done.
Synchronizing product introductions can be achieved rapidly and with relative ease in nascent industries. For example, the entrepreneurial ventures that produce mobile applications for Apple’s iPhone and iPad have developed their own synchronized rhythm. While new applications are being released in these ecosystems every day, the majority of new and updated applications are released in two peak introduction periods — one just prior to summer and another during the holiday shopping season. Industrywide synchrony emerged very quickly in this sector, although it is still a fledgling market. Even in the face of low entry barriers and rapid growth, businesses were able to rapidly synchronize their efforts. In some cases, the new ventures developing applications are colocated, which facilitates social interactions that enable smoother coordination around release plans. In other cases, corporate strategic alliances can be used to align product releases.
These and many other examples in modern industrial ecosystems suggest that the network of relationships among companies (sometimes called the “alliance network”) plays a key role in producing synchronization. Such relationships can range from intense collaborations (where two or more companies codevelop products) to arm’s-length alliances (involving less interaction, perhaps just a joint sales and marketing agreement). The network of alliances determines if and how synchrony occurs, because it is through these links that companies influence one another to speed up or slow down their product development work.
Types of Synchrony
My research shows that enterprises synchronize their product development work in three different ways: by planning the synchrony proactively with a few other partner organizations; by reacting to signals by other companies; or by combining these two approaches to create a hybrid approach. Each is based on particular types of intercompany relationships and therefore has unique costs and benefits.
The planned approach is one in which a small number of companies formally agree proactively to collaborate, with the explicit goal of synchronizing their product innovation and development activities on a given project. I call these companies “coordinators.” Apple Inc., for instance, collaborates closely with a small set of suppliers to ensure that the components for new devices are fully compatible and that the development schedules are closely coordinated to create new end products such as the iPhone. This approach to synchrony generally requires periodic meetings to align goals, determine budgets, establish or adjust schedules, review progress and address a wide range of other project needs.
Planned synchrony extends from project inception to product launch, and even beyond. Participating businesses can be relatively confident that their projects are being closely managed and tracked by other participants, and they can call for adjustments as needed to address problems or delays.
Such intercompany collaboration requires a significant level of commitment. Participating companies typically agree to provide specified amounts of talent, financial support and other resources for the project’s duration. Additional resources, for example professional alliance managers, are necessary to coordinate boundary-spanning projects, such as developing interfaces between proprietary technologies. As with most R&D investments, there can be considerable risk. However, the risk can be mitigated by closely managing the projects relative to mutually determined objectives and timelines. The collaborations between Intel and Microsoft that produced many versions of the so-called “Wintel” platform are prime examples of how proactive synchrony can extend across many product cycles and time periods.
In many industries synchrony isn’t planned or coordinated — it’s simply a timely reaction to circumstances. Companies react to signals from other companies and attempt to get in step with their efforts in order to advance mutual interests. For example, two businesses might have done little more than engage in a sales or marketing alliance with each other in recent years, but that experience might be sufficient to spur new collaborations. A manufacturer scaling up production of a particular item might work closely with businesses that make complementary products to broaden the market; the same process may work in reverse.
Typically, reactive synchrony spreads among companies with existing relationships because a prior alliance or joint venture is sufficient to convince partners to accelerate their schedules in response to each other. Because it is merely an acceleration of existing timetables, reactive synchrony requires comparatively less investment and commitment in coordination than planned synchrony; it is often favored by companies that are reluctant to make major commitments without some external signal that the market is ready for new product
introductions. A developer of telecommunications equipment, for instance, might try to accelerate the release of products that have next-generation technology if partners that are producing complementary products have released theirs. A prior relationship with another company may be enough to convince managers to accelerate their product introduction schedules in response to the partner’s actions.
Research shows that businesses often engage in reactive synchrony unintentionally or unbeknownst to their company’s senior leadership.3 Mid-level managers may simply accelerate their schedules in response to a change in another company’s product release date or when managers become anxious about their ability to keep pace.
The real power of reactive synchrony is that it can quickly spread throughout an entire industry’s network. This is often seen in new industries such as mobile applications or clean technologies — entrants initially make decisions on their own timetables but decide later to get in step with another company. Industrywide synchronization begins when the product development activities of two companies overlap, perhaps unintentionally. Their product releases may prompt a third company to follow suit with its own product introduction, and so on. This phenomenon has been compared to the behavior of fireflies, hundreds of which can momentarily glow in chorus with no apparent coordinating mechanism other than the momentary influence that one exerts on its neighbors when it flashes.4
Synchronization between companies presents an inherent conflict: Even if the benefits are obvious, many companies are reluctant to cede leadership by aligning with another entity entirely, as in planned synchrony. Industry pacesetters can manage the rate of product development with an eye toward market impact and cost. Schedule changes — which can shift the demand for talent, funding, training and other assets — can be disruptive. Thus, many companies strive to minimize disruptions; they want others to conform to their schedule rather than vice versa.
Acknowledging this tension is helpful when selecting which approach to synchronization to follow. Planned synchronization increases the likelihood that it will occur more or less as desired. However, it can be difficult and costly to orchestrate across a broad network. Reactive synchronization, by contrast, has lower costs, but the process takes a long time to implement, and the outcomes are less predictable.
In industries that produce highly complex products, such as computers and telecommunications equipment, industry leaders can overcome the weaknesses of planned and reactive synchronization by blending the two approaches. First, they proactively engage with the company or companies they absolutely must coordinate with; second, they “signal” their intentions to a selected group of other companies in hopes that the broader network of companies will respond.
I studied a pair of partner companies that used the hybrid approach to develop Internet-based middleware technologies that connect different proprietary systems. One company, a large computing systems business, collaborated intensively with a large enterprise software company. Over a three-year period, the two companies synchronized their product releases in an effort to persuade other businesses to adopt each new generation of their technologies. As a vice president of the computer company explained, “We not only want to align with [the software company], but also want to influence other developers to use our new technologies. The sooner they adopt our new versions, the more popular each will become; however, we are doing nothing more here than publicizing our collaboration.”
As the example suggests, most of the expense of hybrid synchronization is associated with the advance planning that resembles planned synchrony. However, the signals sent by the coordinators in the hybrid approach are considerably stronger than those of a purely reactive approach because more than one company is making a substantial investment in the project.
As the collaboration between Intel and Microsoft demonstrates, the hybrid approach offers important advantages to coordinating companies and also to companies in the broader network. In planned synchronization, coordinators invest heavily in a few close collaborations to align product development and releases. They are thus better protected from unexpected changes in project scheduling than they would be if they were simply reacting to the scheduling decisions of others. This also increases the likelihood that surrounding companies will synchronize as well.
For example, coordinating Intel’s microchip and Microsoft’s software releases aligns the two companies’ product launches while at the same time providing strong signals to other companies that
aspire to reap benefits from synchronizing with them; the outside companies gain when their own projects attain their respective goals sooner. The middleware collaboration mentioned above
between the large computer systems company and the enterprise software company offers a good
example. It led to numerous innovations, including middleware that supports new technology for virtualization, portals and authentication, as well as 18 patent applications, and a 9 out of 10 average rating for innovativeness by collaboration participants.6
Managing Hybrid Synchrony
How do organizations implement and maintain hybrid synchronization? A common starting point is proactive engagement in product development relationships with one or more industry partners. As companies begin intense collaborations, they can signal their actions to other organizations within their networks, including through formalized press releases and partner-to-partner communications. If appropriate, they can adjust product development and manufacturing schedules in ways that are attuned to the respective needs of the other companies.
The mechanics of coordinating collaborative efforts between two or more companies are complex and difficult. Not only do organizations have different cultures, objectives, demands and priorities, they are often sensitive about sharing their product development and innovation plans. Project synchronization requires that companies engage with each other on multiple levels. (See “Putting Synchrony to Work.”)
PUTTING SYNCHRONY TO WORK
How do companies use synchrony with other organizations to their advantage? The following steps provide a useful map for how the process can move forward:
Companies aiming to synchronize with other companies can begin with project-related work already under way. The focus should be on making the efforts parallel. By coordinating product development phases, participating organizations can test compatibility at critical junctures, thereby avoiding unnecessary costs. Parallel phasing also allows the coordinating companies to pursue the sequencing that will enhance the project’s overall outcome. In one case, for example, a silicon chip producer and a computer manufacturer agreed to hold off on chip design until the silicon research work was complete.
Once companies agree on sequencing, they can shift their attention to timing. Different companies often move at very different speeds. For example, a semiconductor company that I studied placed a lot of emphasis on product planning but was slow at development, in part because it had an extremely low tolerance for defects. The company’s managers became frustrated when a product development partner, a telecommunications equipment maker, was dismissive of long-range planning and wanted to rush into production of rough prototypes.
Ultimately, the two companies resolved their differences. The telecommunications company, for its part, agreed to invest more resources into planning; the semiconductor company, meantime, agreed to accelerate the pace of product development (without giving up on procedures that assured high quality). The companies agreed that, while prototyping was necessary, it couldn’t come at the expense of quality control. In other instances, partners have found that it’s possible to adjust the speed of individual phases (such as manufacturing or marketing) to help ensure product compatibility or to accommodate another company’s pace.
Sharing the Road Map
It’s important for companies that are trying to synchronize product development efforts to release new products at the same time — that’s what tells other companies in the industry to react. However, if product releases are too infrequent, the companies that should react may miss the signal. Innovative companies often cue other companies about upcoming products with product-development road maps. Such road maps tend to be highly confidential and are used to align product releases, marketing events and other milestones with close partners. Some companies establish milestones far into the future to ensure sustained synchronization.
Working off common road maps enables companies to avoid reacting to product releases by partners that do not involve them. For example, the semiconductor company and the telecommunications company discussed above shared their respective road maps with each other. As a manager at the semiconductor company explained, “We have learned to be cognizant of our different planning and product development cycle times. In some cases, we convince [the telecommunications company] to align around our milestone. In other cases, we engage earlier and align around theirs, which requires slackening our process, and that’s not easy to do.”
Working off a partner’s road map can be useful because it generates external deadlines around which companies can organize their own internal activities. Companies can use shared project road maps to identify and allocate resources as part of their internal planning and resource allocation efforts. What’s more, road maps can send a message to the other businesses in the network that when they react they will not be left facing a marketing embarrassment.
Encouraging Other Companies to Join in Synchrony
The best way to promote synchronization across a broad network of organizations is for coordinating companies to send signals that relevant projects are under way. Ideally, the signals should be sent to the whole network, even those members operating far away from the core. The signals are typically announcements in the trade or public media, or at industry events. For example, when Apple announces the development of a next-generation operating system, the goal is to motivate software companies to modify their product offerings to ensure compatibility and take advantage of features in the new operating system. Companies might also contact arm’s-length alliance partners directly — a simple “heads up” that they are planning a synchronized product release.
In industries where companies routinely introduce new product versions, such as technology, entire networks often fall into a single rhythm. When an influential company adopts hybrid synchronization, its rhythm infects the whole network, increasing the likelihood that networkwide synchronization will occur. In a sense, coordinating companies function as leaders and help other companies achieve synchrony faster. In return, the coordinators enjoy a greater likelihood that the emerging synchrony will reflect their preferred rhythm.
The studies of spontaneous synchronization among fireflies mentioned earlier contain sophisticated mathematical models of synchronization processes that illustrate how rapidly it can spread across a network. To explore synchrony in industry networks, I adapted those models to reflect the proactive, reactive and hybrid synchrony types discussed above, thereby enabling rigorous inferences about the speed with which synchrony can occur and the circumstances under which coordinators are most likely to succeed when establishing synchronous rhythms for their own industries. It turns out that both the speed and the circumstances affecting success depend on the nature of the industry’s network structure.
Synchronization develops faster and more easily in denser networks with a greater number of alliances, such as the manufacturing and finance industries.
The Impact of Network Structure on Synchrony
Industry networks can vary dramatically. In mature industries with large established companies, such as the semiconductor industry, many players have occasional collaborative partnerships with each other. In emerging industries, many new ventures haven’t had time to develop alliances. Some networks are highly clustered, made up of subgroups within which partners are highly interconnected; in these subgroups, companies are quickly referred to other companies without working through vast referral networks. Other networks are less clustered and/or companies are less connected.
Network structure affects innovation synchrony in two ways. First, it influences how quickly synchrony develops. Synchronization develops faster and more easily in denser networks with a greater number of alliances, such as the manufacturing and finance industries. Perhaps counterintuitively, synchrony spreads more slowly in clustered networks where subgroups operate more independently but with highly interconnected mini-networks. Sometimes the subgroups are like separate cliques. While reactive synchrony can occur quickly withinsubgroups, it develops more slowly across them. Thus, it can take longer for subgroup rhythm differences in highly clustered networks to coalesce into a common rhythm that synchronizes the entire network.7
Second, network structure affects a coordinating company’s ability to get other companies in its network to follow its product release rhythm. Hybrid synchrony achieves this more quickly in denser networks than in sparser networks because there are more connections through which synchronizing signals can be sent. This occurs because the coordinator’s hybrid approach piggybacks on the reactive impulses of other companies. Effectively, a noncoordinator relays signals from coordinators about their preferred rhythm.8
The implications are clear. Denser, less clustered industry networks, such as those organized around computer software, are likely to synchronize faster than networks that are less dense and more clustered, such as those organized around automobile suppliers.
Strategic Challenges of Managing Synchrony
Reaping the benefits of intercompany synchronization is costly. The biggest challenge for companies is maintaining sufficient levels of control. Planned synchronization offers the highest degree of control, but there are significant costs. Conversely, reactive synchrony affords relatively limited control in exchange for lower investment costs. Such trade-offs prompt many companies to adopt a more hybrid approach, which gives them project control in those areas they deem most critical yet allows cost savings in areas where they have more risk tolerance.
Sustaining an industrywide pace and rhythm for long periods, as occurs in the computer and auto industries, also presents challenges — especially when it involves hybrid synchronization. Here, coordinating companies can become so focused on their relationships with other companies that they inadvertently ignore the partner organizations they must have on board in order to be successful. It is therefore essential for companies to maintain broad and clear communications, especially with the network members who are critical.
Communicating across senior management ranks is vital because projects involving intercompany synchrony often have the potential to shape the company’s long-term performance. Clear communication with mid-level managers is also critical because they are the individuals charged with implementing projects and ensuring that they mesh smoothly with that of partner companies. Since these projects usually extend for months or even years, there is substantial risk that communications might break down, with serious and costly implications.
Synchronization within industry networks can provide companies with important mutual benefits. In industries where high interdependence is the norm, it is essential for managers to gain a better understanding of how synchronization works and the potential pitfalls across their collaboration networks. Companies need to take stock of their current and potential positions within their industries and markets.
Managers of companies in younger industries need to explore how alignment with other companies can strengthen their company’s position — and how their position might be disrupted. Managers of companies in more mature industries should examine how the structure of the industry might change and how active they want to be in promoting those changes.
Reproduced from MIT Sloan Management Review
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Creating Shared Value at Nestlé
Examples of Nestlé’s commitment to sustainability abound — and they’re impressive. So much so that other business leaders have been applauding. For instance, Douglas R. Conant, the former CEO of Campbell Soup Company, told us in an interview that “Nestlé has got an amazing agenda on social responsibility.”
And earlier this year, Andy Wales, senior vice president of sustainable development at SABMiller, told us in an interview that “In the last five years, a number of food and beverage companies — the leaders include Coca Cola, SABMiller, and Nestlé — have started to raise the risks of water scarcity with leaders of global institutions and national political leaders.”
Nestlé has become so prominent in the food industry for its work around sustainability over the last decade, and you have been in your role that entire time. Tell us about the transformation.
Can you take us back 10 years — what prompted the formation of that organization? What problem were you trying to address by forming this platform?
Were the principles and practices developed by Nestlé, or did they evolve when you partnered with other companies?
Can you give us an example?
That’s great. Let me ask one final question about how Nestlé organizes its sustainability practices. Some companies have a vice president of sustainability, some have advisory boards, some have a CEO who drives the efforts. What’s the big picture for Nestlé?
5 institutional models for successful housing options in Asia
The number of innovative and successful interventions to address housing issues in the Asia Pacific is encouraging – but these efforts must be galvanised, as the Asia and the Pacific is still home to 505.5 million slum-dwellers. Aman Mehta:
Asia has pioneered the people-led process of housing provision as spearheaded by dedicated civil society groups. It is a testament to the fact that while the private sector is able to meet the housing requirements of the rich, the ‘people sector’ has been able to cater to the poor. As seen in Thailand, when government and civil society come together, a large number of people can improve their own living conditions.
Civil society has promoted community-led housing development in Cambodia, India, Indonesia, Mongolia, Nepal, Pakistan, the Philippines, Sri Lanka and Thailand.
"It's too early to tell whether this offer will succeed, and any agreement must verify that the Assad regime keeps its commitments," Obama said. "But this initiative has the potential to remove the threat of chemical weapons without the use of force."
Obama's speech capped a series of dramatic diplomatic developments during which the president's war resolution seemed headed for defeat in Congress until Russia endorsed a scheme for Syria to give up its chemical weapons. The plan, which at first seemed to stem from an off-hand remark by Secretary of State John Kerry, is now being described by administration officials as first broached during last year's G-20 meeting in Mexico.
Obama and Putin failed to reach an agreement at the time, and White House officials say they were surprised at the speed with which Russia embraced the plan after comments by Kerry that his own spokeswoman described as "rhetorical" and "hypothetical."
With plans for a Congressional authorization no on ice, U.S. officials say they are evaluating the Russian proposal, the specifics of which remain vague but would involve Syria declaring giving up its chemical weapons arsenal. "It has to be swift, it has to be real, and it has to be verifiable," an administration official told the Wall Street Journal. "It can't be a delaying tactic, and if the U.N. Security Council seeks to be the vehicle to make it happen, well then it can't be a debating society."
In an indication of the diplomatic difficulties facing the proposal, Russia a proposed French Security Council resolution that appeared to authorize the use of force if the weapons transfer collapsed. Russian Foreign Minister Sergei Lavrov called that condition "unacceptable." rejected
Kerry and Lavrov will meet in Geneva whether he has stumbled on a genuine breakthrough or into a cleverly set trap., where Kerry will try to divine
Syria chemical weapons: With a Russian proposal for Syria to give up its chemical weapons gathering a head of steam, FP's Yochi Dreazen reports on the massive challenges facing such an undertaking.
The plan, according to chemical weapons experts, would be nearly impossible to carry out, and the technical challenges facing such an effort cast significant doubt on the sincerity of Russian and Syrian claims that Bashar al-Assad's chemical weapons stocks can be brought under control.