The Company of the Future Frances Cairncross BOOK OVERVIEW In The Company of the Future: How the Communications Revolution is Changing Management, Frances Cairncross spells out the growing need for managers and companies to embrace and exploit the very technologies that have upended their jobs and businesses. Managers must look inside improving the relationships among managers and employees before they can realize the enormous potential that new technologies hold for enabling collaboration with customers, suppliers, and partners. This book is an invaluable guide for managers looking to wed technological and human skills in ways that enable effective talent management and customer relationship building, fast and flexible decision-making, and open, credible communications among all partners. The book can be used in any MBA or executive education course intended to give managers the tools to anticipate and master the challenges ahead in our networked world. The suggested business cases provide practical examples of problems that face managers looking to create the company of the future. The Company of the Future is divided into 10 (self-standing) chapters that focus on each area of business activity including:! Management, Information and Technology (Chapter 1)! Knowledge, Decision Making and Innovation (Chapter 2)! Customers and Brands (Chapter 3)! Recruiting, Retaining, and Training (Chapter 4)! Communities and Corporate Culture (Chapter 5)! Purchasing (Chapter 6)! Strategic Suppliers (Chapter 7)! Corporate Structure (Chapter 8)! Leading and Managing (Chapter 9)! The Company of the Future (Chapter 10) SUGGESTED CASES 1. Overview Title: Bush Boake Allen Authors: Stefan Thomke and Ashok Nimgade Product #: 9-601-061 Description: Bush Boake Allen, a flavor and fragrance firm, is considering strategic options that would integrate customers into its flavor development process via a new Internet-based design platform. As this
approach could result in dramatic changes to the firm s business model and relationship with customers worldwide, Julian Boyden, president, CEO, and chairman, faces serious opposition from senior managers. Teaching purpose: Developed to show how Internet-based design platforms are changing the relationship and roles between product development, marketing, and customers. Also shows new opportunities for customer "lock-in" in increasingly competitive markets with diminishing loyalty. Finally, shows to what extent customers can be empowered to design their own products in markets with heterogeneous needs. Subjects: Business marketing; Customer retention; Electronic commerce; Internet; Management of change; Product development; Research and development; Supply chain How to use this case with the book: Bush Boake Allen is a company facing several changes in the environment and in its own operations. The case illustrates several topics discussed in the book, such as:! Knowledge, decision making, and innovation: New technology will allow customers to create products, i.e. bring their own ideas into the process. How will this shape the entire innovation process? Where will knowledge accumulate?! Customers and brands: How will the new technology change the customer relationships in the different alternative ways of deploying the technology? Opportunities and threats? Can BBA become a brand?! Recruiting, retaining and training: Will the new technology make it less or more difficult to retain key personnel? What incentives could be designed to encourage the use of new technology and simultaneously retain the most improtant people? Could the technology be used in training key personnel?! Communities and corporate culture: BBA has had a very open culture. Will the new technology change it?! Purchasing and Strategic Suppliers: How can the new technology change the roles of both BBA as a supplier to its customers and BBA as purchaser from its suppliers?! Corporate Structure: New technology can move more control to customers. How will it affect corporate structure? What about IPR? If customers develop their own products, who will own the IPR for the product? How will the old tradition of basing business on trust, not patents, affect this development? Centralized vs. decentralized structure.! Leading and managing: Many employees are virtuosi who are difficult to manage. What challenges will the new technology pose to managing them? The executives of the company are not unanimous
about the ways to use the new technology. How should top management resolve the issue? Is BBA paying enough attention on ensuring that everyone in the company will adopt the new technology? Who should participate in making the decision on how the technology will be deployed? 2. Chapters 1 and 2: Management, Information and Technology and Knowledge, Decision Making and Innovation A company is the sum of what its people understand and know how to do well. Value lies increasingly in creative ideas and knowledge. Chapter 2 explores the importance of getting intelligent people to share what is in their heads and for information to flow sideways through a company not just up and down. The chapters will teach managers the importance of setting central standards for knowledge management and then once the standards have been set fostering openness. These two principles and the lesson learnt from these two chapters will give managers the tools to maximize the value of the ideas and knowledge that it employees possess. The suggested case is PriceWaterhouseCoopers: Building a Global Network. The case takes managers through the practical challenges of setting up a global intranet-based knowledge management system. Title: PricewaterhouseCoopers: Building a Global Network Authors: Ali F. Farhoomand, Marissa McCauley, Peter Lovelock, and Minako Fukagata Product #: HKU095 Description: Price Waterhouse and Coopers & Lybrand merged in July 1998, creating one of the world s largest full-service professional organizations. This case provides a study of how two major organizations are putting together a global knowledge base that would facilitate communication and coordination within the PricewaterhouseCoopers (PwC) practice. Eventually, this knowledge base would be made available to PwC clients. Discusses the changes, issues, and challenges at PwC in building its Intranet, called KnowledgeCurve, a knowledge management system that incorporates all the assets (knowledge, people, skills) of the company to be utilized by the firm. In order for the organization to be successful, it is crucial for PwC to encourage the users to fully utilize the available resources and to contribute information to the KnowledgeCurve. At the time this case was written, PwC is in its initial stages of setting up its Global Knowledge Curve, which would ultimately serve the entire practice. The limitations in using the Global Knowledge Curve led to the creation of Knowledge Curve at each office level, which incorporates the knowledge base and information important to the local level. Subjects: Accounting firms; Information systems; Knowledge management; professional services Supplement: Teaching Note available, Product #HKU095 How to use this case with the book: PriceWaterhouseCoopers is mentioned also in the book as an example of a company that has created an intranet-based knowledge base. This case can be used to explore in more detail the challenges the company faced when it started to build it global knowledge base,
both from technical and from managerial aspects. This case focuses more on the technical side of implementing a global intranet-based solution, but it can be used also to discuss managerial and HR issues related to the introduction of new technology. 3. Chapter 3: Customers and Brands Companies will not just wider their reach by finding new markets, but also by seeking to deepen existing relationships. They will have more information than ever before about their customers and this must be used to keep the most profitable customers, and some companies may even seek to fire customers. On the other side, given the huge increase in product information reaching customers, memorable brands will become more important. The chapter will guide managers through the ways Internet technologies can be used to build loyalty and trust will reliability and good service. The suggested case for this chapter is PassAct, Inc. This is also the recommended case for Chapter 6 and 7. The objectives of the case is to show managers the importance of using Internet-based technologies to deepen relationships with customers and how Internet-technologies are dramatically affecting the purchasing of companies. Title: PassAct, Inc. Author: Andrew McAfee Product #: 9-602-026 Description: PassAct is a virtual distributor for high-tech R&D components and products, taking orders from researchers within companies, passing them on to appropriate suppliers, and monitoring fulfillment. Customers order from a web-based catalog with built-in workflow capabilities. PassAct works with suppliers to integrate their products into this catalog and to use the Internet to transmit order-related information. PassAct itself holds no inventory and adds value by presenting a comprehensive digital catalog and by providing services related to finding and ordering products. PassAct is making significant changes to its revenue model by charging customers and suppliers for services that were previously free. The company wonders how much to charge for these services and what the implications will be. Teaching Purpose: To explore the business of virtual fulfillment and to understand its principal strengths and weaknesses. PassAct is an example of e-intermediation, or the appearance within an industry of new middlemen using the Internet to add value in new ways. By some measures, it has been quite successful to date, and the case serves as a vehicle to explore the reasons for this--what needs does PassAct address that was not being met before the era of the Internet? To understand why PassAct is not yet profitable and what the company intends to do about it. Also, quickly leads to a discussion of why investors in 2000 seem to quickly lose their patience for growing but money-losing Internet businesses and how the new pressures they applied played out in business model changes. Subjects: Distributors, Internt, Research and development; suppliers
How to use this case with the book: PassAct is a company that develops an emarketplace solution to streamline purchasing. The case illustrates issues discussed in chapters 6 (Purchasing) and 7 (Strategic Suppliers) of the book. It can also be used to discuss communications, brands, corporate structure and business models, and managing change. 4. Chapters 4 and 5: Recruiting, Retaining, and Training; and Communities and Corporate Culture Nothing matters more to a company than finding the best people for a job and then keeping their skills upto-date. For every business, acquiring and grooming talent is the single most important challenge. Chapter 4 will gives managers practical insights into how companies can ensure that they are able to recruit and retain the best employees; and keep up every employees skills up to date. Managing talent is also about capturing innovative ideas from middle managers and those further down the line. Chapter 5 will show managers that successful collaboration will require excellent communication and incentives that reward sharing information and working for common goals. The suggested case, Zaplet, Inc. (A), will take managers through an example of a company experiencing rapid growth and the importance of recruiting key employees and matching the organization shape and culture to the corporate strategy. Title: Zaplet, Inc. (A) Author: Dorothy Leonard and Brian DeLacey Product #: 9-601-165 Description: Start-up Zaplet, Inc. has radical software, prestigious venture capital funding, and a multitude of business opportunities. New CEO Alan Baratz must select a strategy and redesign the organization to deliver. This case describes the roles and philosophies of the founders and the Kleiner, Perkins venture capitalist in building the company, the creation of the options for various business applications, and the process of selecting a business focus. Issues include the role of experimentation in selecting a market for new technology, the influence of venture capital, the importance of recruiting key employees, transitions for founders, and matching organizational form to strategy. The key decision is how to further focus the company. Teaching Purpose: For courses about innovation: To stimulate discussion about the transition in startups from founders to experienced management, how to build a technology-based business, and the influence of prestigious venture capitalists. For general courses: To consider mentoring and the role of an expert (the venture capitalist) in the creation of value, and to think about designing organizations and the importance of key personnel decisions.
Subjects: Entrepreneurial management; Entrepreneurship; High technology; Innovation; Organizational design; Organizational learning; Product development; Product positioning; Software Supplement: Teaching note available, Product # 9-601-165 How to use this case with the book: Zaplet, a company mentioned also in the book, is a startup that is growing to its next phase. This involves changing the management style and focus, but also ways to motivate employees and manage internal competition. It also illustrates different areas of innovation, from free experimenting to focused innovation. These changes will be reflected in corporate culture and personnel. The case can be used to discuss issues described in Chapter 2 (Knowledge, Decision Making, and Innovation), Chapter 5 (Communities and Corporate Culture), chapter 8 (Corporate Structure) and Chapter 9 (Leading and Managing). 5. Chapters 6 and 7: Purchasing and Strategic Suppliers Chapter 6 and 7 provide managers with dramatic insights and lessons into how Internet technologies will radically alter the way companies buy from other companies. A key challenge for managers will be to develop a clear and open relationship with suppliers to allow them inside the machine to give them extraordinary access to their databases and inner workings to integrate operations and make collaboration more effective. The two chapters will demonstrate to managers that, the long-term consequences of Internet technologies will be much more extensive than the initial effects and will come only once significant organizational change has take place. The suggested case, PassAct, Inc., looks at the practical challenges of developing an internet-based approach to procurement and managing strategic suppliers. (See Chapter 3 for case information.) How to use this case with the book: PassAct is a company that develops an emarketplace solution to streamline purchasing. The case illustrates issues discussed in chapters 6 (Purchasing) and 7 (Strategic Suppliers) of the book. It can also be used to discuss communications, brands, corporate structure and business models, and managing change. 5. Chapters 8 and 9: Corporate Structure and Leading and Managing Chapters 8 and 9 brings together the key messages of the book focusing on the importance for managers to recognize that to benefit from the amazing potential of Internet technologies, they must reorganize their companies to build the company of the future. The role of the center will change: only by setting standards in areas such a purchasing and information technology - will managers be able to reap the productivity gains. Without the right organizational structure, culture, and staff, a company will not fully benefit from even the most sophisticated technology. Chapters 8 and 9 demonstrate to managers to key
factors in designing the structure of the company of the future and recognizing the skills managers must have to create the company of the future. The suggested case for these chapters is Zaplet, Inc. (A). (See Chapters 4 and 5 for case information.) How to use this case with the book: Zaplet, a company mentioned also in the book, is a startup that is growing to its next phase. This involves changing the management style and focus, but also ways to motivate employees and manage internal competition. It also illustrates different areas of innovation, from free experimenting to focused innovation. These changes will be reflected in corporate culture and personnel. The case can be used to discuss issues described in Chapter 2 (Knowledge, Decision Making, and Innovation), Chapter 5 (Communities and Corporate Culture), Chapter 8 (Corporate Structure) and Chapter 9 (Leading and Managing).