Issue 3, 1999

Personal Mastery Moving from Blame to Accountability

Marilyn Paul

When something goes wrong in an organization, the first question that is often posed is, "Whose fault is it?" When there's data missing in accounting, it's the bookkeeper's fault. If we lose a key customer, it's the sales group's problem – "They promised more than we could deliver!" [...]

Issue 3, 1999

Industry Outlook Report The Telecommunications Revolution

Werner A. Knetsch, Martyn F. Roetter, and Patrick E. White

The global telecommunications industry is embroiled in fundamental and revolutionary change. To a degree unprecedented in history – and unequaled in any other industry at this time – telecommunications industry participants are facing a revolution in the basic technologies used to build and operate the network as well as the opening of their protected monopoly markets to full, unfettered competition. Both operators and equipment suppliers face new competitors with billions in financial backing, multiple mergers and acquisitions around the globe, and a shift to completely new business paradigms. In the face of this onslaught, the incumbent telecommunications companies are forced to rationalize costs, make their organizations more efficient, and deal with markets that are becoming ever more articulate in their demands. For some industry observers, the wave of change sweeping the industry feels nothing short of apocalyptic. [...]

Issue 3, 1999

Industry Outlook Report The Energy Industry at the Start of the New Millennium

Christopher E.H. Ross

Each year, my colleagues and I take time to reflect deeply about the future of energy markets and the industry. This year's conversations were particularly challenging given the turbulent environment, which we metaphorically compare to "riding the rapids."1 These rapids, or trends, include abrupt U–turns in oil prices, a squeeze on margins throughout the industry supply chain, mind–boggling megamergers, and growing evidence that traditional vertically integrated structures are misaligned with the direction of change. Then there is an ongoing technology revolution to reckon with, and a climate–change debate that threatens the very future of the fossil fuels industry. [...]

Issue 3, 1999

Viewpoint Developing Great Leaders

Yoshio Ishizaka and Douglas A. Ready

Companies whose strategic ambition includes achieving breakaway innovation often make the mistake of focusing exclusively on the "hard" side of innovation: developing new technologies, new products, and new ways of delivering services to customers; measuring progress toward their innovation objectives; and keeping close tabs on the linkages between innovation and profitability. In our experience, while all these activities are essential, they are not sufficient. For companies to achieve significant and sustained innovation, they must also embrace the "soft" aspects of becoming innovation–centered: clarifying a compelling set of enduring values, creating a culture of innovation throughout the company, and developing the leadership talent required to sustain this culture. [...]

Issue 3, 1999

The Long Game: Creating Revolutionary Change Through Radical Innovation

Robert Shelton

Innovation is like golf: there is a long game and a short game, and success depends on mastering and integrating both. [...]

Issue 3, 1999

The Innovation Premium: Capturing the Value of Creativity

Ronald S. Jonash and Tom Sommerlatte

Wall Street increasingly places a higher value on innovation than on virtually any other approach to generating growth. This power to increase both the top line and the bottom line – growth in total revenue and growth in earnings – is something investors consistently reward – and pay a premium for. More than leadership change, more than mergers or acquisitions, more than renewed commitment to cost reduction, investors reward innovation. We call this effect the innovation premium. [...]

Issue 2, 1999

Viewpoint The Nutraceuticals Industry: Harnessing Convergence to Create Competitive Advantage

Riz Rizavi and Peter Folstar

The nutraceuticals business has experienced tremendous growth over the past few years and is currently estimated to exceed $65 billion a year in global sales. The term "nutraceutical" is used to describe any food, or part of a food, that offers a medical or health benefit beyond simple nutrition. Such benefits may include the prevention or treatment of disease. These products range from pure compounds and herbs used in capsules (e.g. ginseng) to foods that contain added bioactive (biologically active) ingredients, such as orange juice enhanced with calcium. [...]

Issue 2, 1999

Half of Your R&D Is Wasted - But Which Half and on What?

Jean-Philippe Deschamps

When the reengineering wave of the 1990s hit R&D operations, Chief Technology Officers (CTOs) jumped to justify their companies' R&D spending levels, striving for functional efficiency, process effectiveness, and value for money invested. Companies began streamlining processes, sending developers closer to the market, and aligning R&D with business strategy. [...]

Issue 2, 1999

Systems Innovation as a Source of New Business Opportunities

Tom Sommerlatte and Michael Braun

Business leaders have long recognized systemic thinking as a useful source of ways to improve products, services, and processes. Examples of approaches based on systemic thinking include value analysis and process reengineering, which have proven effective in making the various elements of a product or service fit together and in integrating partial business functions (such as order processing, inventory management, purchasing, and production planning) into comprehensive business processes. Supply chain management and organisational learning, among other disciplines, have derived from this effort. [...]

Issue 2, 1999

Innovation Metrics: A Framework to Accelerate Growth

John Collins and Darren Smith

More than 70 percent of Wall Street analysts consider a company's ability to innovate consistently to be a key determinant of its value. However, only one in three of these analysts claims confidence in measuring innovation. [...]

Issue 2, 1999

Diffusing Knowledge and Learning: Lessons from BP's Pacesetter Network

Humberto Vainieri, Robert Hanig, Rick Porter, Alan Thomas, and Paul Monus

One of the key dimensions of British Petroleum's (BP's) outstanding success over the past few years has been its commitment to demonstrating distinctive performance within its industry and beyond. This commitment led the company to not only improve the technical and structural aspects of its business and organisation, but to explore the mindsets and improve the behaviors of its leaders and staff as well. The Pacesetter program included a significant focus in this area. [...]

Issue 2, 1999

The Challenges of Profound Change

Peter Senge, Bryan Smith, Art Kleiner, Charlotte Roberts, Rick Ross, and George Roth

In 1988, the Harvard Business Review carried an article called "Planning as Learning," by Arie de Geus, coordinator of group planning at Royal Dutch/Shell. Though he was not well known outside of Shell, his article resonated with a great many people–particularly this line: "We understand that the only competitive advantage the company of the future will have is its managers' ability to learn faster than their competitors." Eight years later, the American CEO most admired by his peers, Jack Welch of General Electric, had come to the same conclusion. Welch made this statement in a GE annual report: "Our behavior is driven by a fundamental core belief: The desire and the ability of an organization to continuously learn from any source–and to rapidly convert this learning into action–is its ultimate competitive advantage." [...]

Issue 1, 1999

Industry Outlook Report The Chemicals Industry in 2010

David Hurwitz and Gordon Nechvatal

The global chemicals industry provides a steady stream of new products and innovative technologies, enhancing quality of life and helping sustain scarce resources. On average, however, industry participants have failed to deliver the financial performance that today's capital markets expect, suggesting the need to change the way they operate. Other fundamental driving forces – including social/environmental, macroeconomic/political, market dynamics, and technical developments – are adding to the pressure for change. In response, chemical firms will need to transform themselves, rethinking the way they create value for their customers and focusing on core competencies and core activities. [...]

Issue 1, 1999

How Electronic Commerce Is Reshaping Industry Structures

Michael R. Taylor, Nicholas Athanasiou, John Collins, Kurt Eichhorn, Arno Hesse, Michael Keating, Eberhard Kurz, Philip D. Metz, Vikram Nair, Eckhard Ortwein, Christopher E.H. Ross, and Kian Wright

Across the business landscape, individual companies and whole industries are reeling from the impact of unprecedented change brought about by electronic commerce (EC). Major new competitors have come out of nowhere, fueled by access to seemingly limitless capital. Previously unknown Davids are slaying Goliaths, at least in terms of shareholder value creation. "Amazon" – a word formerly associated primarily with the region of South America surrounding the world's largest river – now denotes one of the Internet's major success stories and by extrapolation has become a verb, as in, "Barnes and Noble was Amazonned". [...]

Issue 1, 1999

How Electronic Commerce Is Transforming Business Processes

Michael Keating, Philip D. Metz, Curtis Holcomb, Martha Nicholson, and David L. Jones

It wasn't too long ago that the idea of a company outsourcing its data processing was considered a revolutionary stroke of genius. Outsourcing allowed the company not only to cut costs and prune assets, but to rent time on its own applications. In the world of Internet–based computing, this innovation will quickly evolve to the next step, in which companies will outsource not only the computer running the transaction process, but the process itself. Now that one company's production planning system can be seamlessly merged with another company's inventory management system, and both systems can be managed by a third entity charging transaction fees to both of them, it is easy to see the next model: companies with no "physical" presence in the world except for the desks that host the "minders" (and even these might be spread across the planet, reflecting the work habits and lifestyles of the individuals involved). E–Trade, the Internet stock trading company, is an early prototype of this type of venture. Over the next decade, other models will emerge that will stretch current notions of the enterprise and radically challenge such basic concepts as ownership, markets, and – most certainly – competition. [...]

Issue 1, 1999

Tracking Electronic Commerce: Signals of Change

Peter Shapiro and Arno Hesse

While virtually all businesses today seem to have their own Web sites, most businesses have yet to become deeply involved in electronic commerce (EC): 80 percent of EC is conducted by the top 25 suppliers on the Internet. As the CEO of a large publishing house has said, "Once you can tell the success story of electronic commerce without mentioning Amazon, Cisco, and Dell, I will take this trend for real." When will EC become real for companies other than the pioneering early adopters? For many businesses, this question will be a key strategic issue – for some, even an issue of survival. The ability to recognise early indicators of accelerated e–commerce growth will help these businesses to know when to "take this trend for real". [...]

Issue 1, 1999

Innovation in a Wired World

Philip D. Metz

Signs of an innovation revolution are emerging in leading firms all over the world. Companies such as Boeing and Motorola are applying advances in information technology and communications to "wire" portions of their innovation and product creation processes. Chrysler, Cisco Systems, Dell Computer, and Fiat all use the Web as a new sales channel and – to their competitors' consternation – as a source of instantaneous market data to guide product development. Others, such as Ford, General Motors, and Hewlett–Packard employ some form of computer–based development, design, or drawing. And many companies are employing online "knowledge management systems". [...]

Issue 1, 1999

The Big Picture: An Overview of Electronic Commerce

Arun N. Maira and Michael R. Taylor

The emergence of the Internet has given rise to four major application families: cyber communities, digital households, digital workplaces, and electronic commerce. Of these applications, electronic commerce has grown fastest. It is now poised to have an immediate and transformative impact on how companies execute their core business processes, how consumers shop and purchase, how value is created and distributed within industries, and ultimately how the global economy is structured. [...]

Search by keyword

About Prism

Twice a year, Arthur D. Little covers the latest cutting-edge thinking on strategy, technology and innovation in its corporate magazine Prism. For over 20 years Prism has continually set the standards in innovative thinking and groundbreaking concepts in the world of business and management.

| |Bookmark Arthur D. Little