Tạp chí Chiến lược kinh doanh - quý IV / 2013

Tạp chí Chiến lược kinh doanh - quý IV / 2013

Published by Booz & Company www.strategy-business.com TWEETING’S NOT ENOUGH  DO YOU HELP OR HINDER? Winter 2013 $12.95 Display until February 25, 2014 New Tools The Global Innovation 1000 32 New Rules Eric Ries, The Thought Leader Interview 90 New Views A Skeptic’s Guide to 3D Printing 20 Reimagining Innovation Best Business Books OF 2013 Enroll. Re-boot. Transform: stanfordsep.com STANFORD EXECUTIVE PROGRAM June 22 – August 2, 2014 Application Deadline: April 30, 2014 Change lives. Change organizations. Change the world. Are you searching for an Executive Education Program that enables business leaders to forge new paths to success? Is your goal to acquire the knowledge and vision to drive innovation, lead change, and transform your career? Are you committed to recasting your thinking and writing the next chapter? Then this is your summer. This is your six weeks. This is your GPS. Ask yourself these leading questions. One of the most striking new digital innovation tools is the customer im- mersion lab. As described in “The Global Innovation 1000: Navigat- ing the Digital Future,” by Barry Jaruzelski, John Loehr, and Richard Holman (page 32), the lab is a vir- tual reality environment for iden- tifying new product opportunities. Engineers, marketers, and custom- ers use an all-encompassing video game–like interface to (for example) play with new products—operating the controls, opening the packag- ing, doing everything but tasting the food. Because the users’ move- ments and comments are tracked and analyzed, the tool becomes a model of customer response, yield- ing more insight than face-to-face observation of real customers. When Alfred Korzybski coined the expression “the map is not the territory” in his book Science and Sanity back in 1933, he was writ- ing about the tendency of people to draw the wrong conclusions from observations of the physical world. Conceptual models in those days were limited descriptions of reality, either so specialized that only scien- tists could understand them, or so vague as to be meaningless. These days, computer-augmented mod- els such as immersion labs are so detailed, precise, and far-reaching (incorporating data from so many people and places) that they super- sede reality. The map is truer than the territory—or at least truer than our perception of it. These new digital tools are designed to improve the ratio of breakthroughs to breakdowns, and they probably will. But they are also likely to provide new ways for companies to overcommit and over- extend themselves. Thus, it’s fit- ting that this issue should include some sober looks at technologies and methodologies. For example, Booz & Company researchers Curt Mueller, Andrew Schmahl, and Andrew Tipping scrutinize the same-day delivery of products (page 6). Their take? That bricks-and- mortar stores, if they rethink their distribution model, could gain an unassailable competitive advantage. Other stories in this issue ex- amine platform market businesses that link customers to one another (page 9), the limits of Twitter-based marketing (page 12), the slow ad- vent of the digital grid for electric power (page 14), and (with justifi- able enthusiasm) the bundling of healthcare services (page 26). Fi- nally, in “A Skeptic’s Guide to 3D Printing,” Tim Laseter and Jeremy Hutchison-Krupat show how mod- els of declining cost can predict the evolutionary trajectory of any lead- ing-edge technology (page 20). In a world of powerful models, we need quality management more than ever. Eric Ries, author of The Lean Startup, makes this point in the issue’s Thought Leader inter- view on page 90. He notes that suc- cessful Silicon Valley startups are paying more attention to the “bor- ing stuff” of building managerial capability, even as mature organiza- tions are learning to flex new tools to manage innovation. If you’re in- terested in doing the same, there’s no better tool than our annual best business books section (page 56), edited by Theodore Kinni—a map of powerful management writing that is at least as compelling as the territory it covers. Art Kleiner Editor-in-Chief kleiner_art@strategy-business.com Illustration by Lars Leetaru The Map Is Truer than the Territory comment editor’s letter 1 editor’s letter Same-Day Delivery? Not So Fast Curt Mueller, Andrew Schmahl, and Andrew Tipping Traditional retailers can outshine their online competitors in the distribution game. The High Risk of Platform Markets Dylan Minor Companies like dating sites and online auctions that link complementary partners can dominate for years or be swept away in an instant. Jonah Berger Is Over Twitter Laura W. Geller How the science of social transmission will help your brand catch on—and why tweeting alone is not enough. Waiting for the Digital Grid Don Dawson, Earl Simpkins, and Josh Stillman The modernized grid should revolutionize the way electricity is distributed and used, but its potential hasn’t yet been realized. Let’s Stop Calling Them Leaders Eric McNulty Executives, officials, and managers should have to earn the title of “leader,” not just expect to receive it. s+b Trend Watch Chinese Companies Reclaim “Made in China” TECHNOLOGY A Skeptic’s Guide to 3D Printing Tim Laseter and Jeremy Hutchison-Krupat Excitement about any new technology should be balanced with the application of time-tested forecasting tools. HEALTHCARE Healthcare Shifts from à la Carte to Prix Fixe Gary D. Ahlquist, Minoo Javanmardian, and Sanjay B. Saxena A bundled approach to treatment offers higher quality, lower costs, and a better experience for patients. leading ideas 17 14 6 9 12 essays 26 20 18 32 9 63 COVER STORY: INNOVATION The Global Innovation 1000: Navigating the Digital Future Barry Jaruzelski, John Loehr, and Richard Holman Booz & Company’s annual study of R&D spending reveals the tools that are transforming innova- tion—from customer insight to product launch. Profiling the Global Innovation 1000 The 10 Most Innovative Companies ORGANIZATIONS & PEOPLE Are You Your Employees’ Worst Enemy? Kannan Ramaswamy and William Youngdahl Many leaders inadvertently stand in the way of superior performance. Here’s how to avoid the hindrance trap. Best Business Books 2013 STRATEGY Rebuilding the Temple Mount Walter Kiechel III COMPANY STORIES Lessons in Failure David K. Hurst GLOBALIZATION Here Come the New Competitors John Jullens DIGITIZATION Three Harbingers of Change Howard Rheingold MARKETING Is Your Brand Experienced? Catharine P. Taylor MANAGERIAL SELF-HELP Influence, Inquiry, Action Sally Helgesen LEADERSHIP Running the Detroit Three James O’Toole THE THOUGHT LEADER INTERVIEW Eric Ries Paul Michelman The author of The Lean Startup is thinking big about the challenges facing companies in an economy driven by innovation. END PAGE: RECENT RESEARCH Conglomerates Bounce Back Matt Palmquist Borrowing clout gives large companies an edge in a financial crisis. Cover illustration by Craig & Karl features 32 77 Issue 73, Winter 2013Published by Booz & Company 56 58 63 67 72 46 36 42 90 100 81 86 strategy+business www.strategy-business.com Published by Booz & Company strategy+business (ISSN 1083-706X) is published quarterly by Booz & Company Inc., 101 Park Avenue, New York, NY 10178. ©2013 Booz & Company Inc. All rights reserved. “strategy+business,” “Booz & Company,” and “booz&co.” are trademarks of Booz & Company Inc. 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BOOZ & COMPANY Chairman Joe Saddi Chief Executive Officer Cesare Mainardi Managing Director, Client Centricity Joachim Rotering Chief Marketing and Knowledge Officer Thomas A. Stewart Knowledge and Market- ing Advisory Council Paul Leinwand Fernando Fernandes Rolf Fricker Hilal Halaoui Barry Jaruzelski Follow us Introducing the Best Ideas on Strategy from s+b THE EXECUTIVE GUIDE TO STRATEGY Now available on the App Store and the Kindle Store Or at strategy-business.com/executivestrategy leading ideas 6 strategy+business issue 73 distribution centers, bricks-and- mortar retailers are actually better positioned than e-tailers to deliver products rapidly to customers. And although our survey focused on the U.S., we believe the findings are applicable to other countries with well-developed retail and transpor- tation sectors. With the possibility of free, ground-based, next-day delivery to consumers, the tables may be turning. Paying and Waiting To better understand online shop- ping habits and expectations, we asked consumers how much they would be willing to pay for delivery, and how long they would be willing to wait for their order to arrive. When it came to the first question, the answer was pretty blunt across the board: nothing or almost noth- ing. Nearly half of our survey re- spondents said they were unwilling to pay any fee whatsoever for deliv- ery, and only about 10 percent said they would pay US$10 or more for same-day delivery. This finding confirmed earlier studies that have shown that customers’ online pur- chasing decisions often hinge on the issue of free shipping. Same-Day Delivery? Not So Fast Traditional retailers can outshine their online competitors in the distribution game. by Curt Mueller, Andrew Schmahl, and Andrew Tipping O ffering customers free same- day delivery has long been an elusive goal for e-tailers. Their motivation is simple: If e- tailers can give customers the near- instant gratification of buying in a store, they can eliminate one of the most powerful advantages held by their bricks-and-mortar competi- tors. Alas, costs and complexity have largely kept same-day delivery (de- fined here as delivery between sunup and sundown on a weekday) out of reach and, at best, a niche offering. There have been some notable recent developments, however. In July 2013, eBay unveiled an expan- sion of its eBay Now same-day deliv- ery service into more areas around San Francisco and New York, with plans for Chicago and Dallas. On the heels of that announcement, Amazon said it would hire an addi- tional 5,000 workers to staff its in- creasing number of U.S. fulfillment centers. Both are competing with Google Shopping Express, which launched a pilot service offering same-day delivery from a limited group of participating retailers to the San Francisco area in early 2013. However, the demand for same- day delivery might be weaker than expected. According to a new Booz & Company survey of more than 1,000 online shoppers in the United States, most customers don’t neces- sarily need same-day delivery and, in fact, in many cases they don’t want it. They are getting home from work, going online, and placing an order. But they don’t want the item to arrive while they are making dinner or put- ting their kids to bed, let alone have it sit on their doorstep overnight. This is where it gets interesting for traditional retailers that are will- ing to rethink their business model. By using their hundreds or thou- sands of physical storefronts as local Leading Ideas leading ideas Illustration by Edward McGowan 7 leading ideas sity in a single, planned dispatch minimizes the fuel, capital, and la- bor costs involved in a delivery. Tra- ditional low-cost delivery models achieve density in two ways: long line-haul moves (typically by trac- tor-trailer) that allow companies to use large depots to aggregate supply, and overnight sorting at local deliv- ery stations where incoming supply can gradually amass from multiple sources to fill delivery trucks. But both of these models tend to slow down delivery times. E-tailers continue to wrestle with this density problem, but tradi- tional retailers—particularly na- tional and regional retailers—have a secret weapon that’s hiding in plain sight: their retail storefronts, which they can use as mini distribution centers and sources of fulfillment for local online demand (see Exhibit, page 8). For example, a national retailer with several outlets in the Chicago area might receive hundreds of on- line orders from local customers af- ter its warehouses are closed. But with the right systems in place, the company could identify which local retail stores that have those items in stock are still open. The company could then direct sales staff to select and package those items, and ar- range for a local carrier to pick them up from the store before the doors close. The packages would go from the store to the local delivery station that evening, and the next morning be loaded onto trucks in time for the carrier’s normal local ground-deliv- ery route. Even a smaller retailer without the necessary sales volume to justify a late-night, in-store carri- er pickup could make the same over- night guarantee if, for instance, an employee dropped off the packages at a local delivery station on his or her way home from work. How long are customers willing to wait? Survey respondents indicat- ed that overnight delivery was only 5 percent less valuable to them than same-day delivery, and three-quar- ters agreed or strongly agreed that they would be more likely to pur- chase goods from a retailer that of- fered free next-day delivery than from one that did not. The survey also revealed that 60 percent of on- line shoppers place most of their or- ders after traditional working hours (5 p.m. or later). Only 4 percent of shoppers make their purchases by 9 a.m., and only another 14 percent do so by noon. Given these findings, the future may not bode well for several new, high-profile shipping offerings. They are either too expensive or too limited in their ability to accept orders after business hours—or both. For example, eBay Now’s ser- vice levies a $5 fee. AmazonFresh uses a subscription model, charging customers in Los Angeles $299 per year for “delivery by dinner” of or- ders placed by 10 a.m. Some tradi- tional retailers are also throwing their hats in the ring. For a fee of $15 per order, Nordstrom will de- liver goods to customers in La Jolla, Calif., Seattle, and Bellevue, Wash., by 7 p.m. if they are purchased by 1 p.m. that day. But these and other attempts at same-day delivery are likely to struggle to expand beyond their narrow geographies. The Storefront Advantage The trick for traditional retailers is to understand their positional ad- vantage with regard to density (the number of packages being handled in a given geographic area). Free de- livery depends on low delivery costs, and low delivery costs depend on density. This is because greater den- leading ideas 8 strategy+business issue 73 traditional and digital offerings is required to make a nationwide plan for low-cost overnight delivery fea- sible and capable of reaching its full potential. Enhance real-time inventory management. Inventory systems must provide transparency into where every SKU is located. This detail must go beyond knowing in which store an item can be found, to knowing in which department, down which aisle, and on which particular shelf. Optimize fulfillment systems. Fulfillment systems are needed that can immediately determine which particular retail store can satisfy an order. This decision requires balanc- ing factors such as proximity to the customer, current (and predicted) inventory levels, and staff capacity for selecting the ordered items and packing them for pickup. Create a flexible workforce. Sales staff may be asked to fulfill on- line orders during what would oth- erwise be idle time. They need training to use the retailer’s order- taking technology and must learn how to locate, pack, and label items for shipment. New approaches to sales personnel compensation (espe- cially at commission-heavy retailers) may also be required. Develop robust logistics part- nerships. It’s critical to select a transportation partner (or partners) capable of picking up parcels later in the evening than is currently typi- cal, closer to store closing times of 9 to 10 p.m. Transportation part- ners might not enthusiastically offer late-night service, but the retail in- dustry accounts for a substantial amount of their delivery business— which gives them a vested interest in helping traditional retailers compete with e-tailers. Send a strong marketing mes- sage. A large-scale marketing cam- paign is important in helping retail- ers spread the word about a next-day delivery offering, and in articulating the benefits of ordering from the company’s website instead of from an e-commerce competitor. Managing bricks-and-mortar stores has so consistently been framed as a disadvantage that it’s easy to underrate the value of physi- cal proximity to customers. In reali- ty, these stores may be just the ad- vantage retailers need to gain an edge over their online competitors. A handful of retailers are already ex- perimenting with the “store-to- home” concept, mostly to move out- of-season stock and leverage idle sales capacity—but not to fulfill or- ders in the evenings and get them to the customer’s door the next day. As Amazon, eBay, and Google push ag- gressively into rapid delivery, tradi- tional retailers must not hesitate to respond. The storefront advantage is real, but it’s not permanent. + Reprint No. 00213 Curt Mueller curt.mueller@booz.com is a partner with Booz & Company and leads the firm’s supply chain practice. He is based in Chicago. Andrew Schmahl andrew.schmahl@booz.com is a principal with Booz & Company’s engineered products and services practice, and is based in Chicago. Andrew Tipping andrew.tipping@booz.com is a partner with Booz & Company and leads the firm’s U.S. transportation practice. He is based in Chicago. Also contributing to this article were Booz & Company partner Scott Corwin and principal Umut Aytekin. A Rapid Delivery Strategy Admittedly, this distribution strate- gy will not be easy for any retailer, and each needs to consider a range of questions: Which product catego- ries are most sensitive to delivery speed? How do our customers’ needs change during the peak holiday sea- son? Are time-definite delivery win- dows more valuable to our custom- ers than overall speed? Execution of this strategy, which would likely take several months to implement, will require retailers to take a cross-functional approach that involves thoughtful planning, IT investments, and close ties with transportation partners. Most important, it must treat stores and their inventory differently—not as a burden but as a source of com- petitive advantage. The following steps can help retailers get started. Coordinate across channels. Senior leaders must commit to tearing down the last remnants of silos between offline and online domains. Full cooperation across The Rapid Delivery Win-Win By leveraging local stores as distribution centers, retailers can significantly decrease the gap between their cost to deliver and the consumer’s willingness to pay. $10 $5 $15 $20 Estimated transportation cost to deliver, in US$ 1 hour 3 days 4–5 days Same day Standard overnight Consumer’s willingness to pay Potential new cost to deliver 2 days Source: Booz & Company analysis [...]... strategy+business Online strategy-business.com • Web-only content published weekly • Recent Research • Author’s Choice • Archive of all articles Subscribe for free • s+b’s e-mail newsletters • RSS updates on 16 subjects Talk with us editors@strategy-business.com Facebook.com/strategybusiness Twitter.com/stratandbiz Linkedin.com/today/ strategy-business.com strategy-business.com/ GooglePlus strategy-business.com essay... Foreign-funded companies 1,000 All Chinese companies China loosens foreign trade restrictions 800 600 Chinese non-state-owned 400 200 Chinese state-owned 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Source: “An Emerging Innovation Power: 2013 China Innovation Survey,” Sept 2013, booz.com/made-in-china; General Administration of Customs of the People’s Republic of China; Booz & Company analysis strategy+business... that their experiences with bundles had been largely positive Consumers give high marks to bundled care for its clarity about the process, from diagnosis through treatment and rehabilitation “Oneprice-covers-all is attractive, but even more attractive is the promise of a coordinated team providing care and treatment,” said one participant, a middle-aged man suffering from prostate cancer The right plan... be complex and costly initiatives bundles, HEALS are all-in-one, develop bundles for highly standard The economic opportunity for the end-to-end packages for specific outpatient procedures like tonsil- health system must be big enough medical conditions and procedures lectomies and insertion of ear tubes, to cover its investment during the They combine medical care, financ- for which the results are generally... enjoying monopoly-like profits with a diminished threat of competitive entry from others + FIND YOURSELF AT THE CENTER OF SOLUTIONS Here is where actionable business knowledge can help you solve immediate challenges And where gaining practical business skills from a world-class faculty gives you better tools for leading your company Learn more about Executive Education gsb.columbia.edu/execed How the... potentially lower out-of-pocket expenses These attitudes held almost regardless of respondents’ age, health status (sick versus well), or type of insurance plan (PPO, HMO, high-deductible, and so on) But consumers do have some concerns—for example, many have serious reservations about traveling any significant distance to receive care Qualitative interviews with patients who had already received treatment... believe the principles are as ap- ensuring the health system’s ability a guaranteed outcome To make this propriate for these relatively simple to thrive over the long term work, HEALS assembles a multidis- procedures as for their more complex ciplinary team that collaborates to counterparts The principles give improve outcomes over time, along patients a simpler, more transpar- cause they will be dealing... commodity-grade plastics or metals, this will require a very high level of sophistication Finally, although they are unlikely in the near term, breakthroughs in nanotechnology or in the ability to inexpensively create the raw materials needed for 3D printing from recycled household waste could completely change the economic trade-offs We may eventually live in a world where factories that mass-produce... setting your schedule back 2 00 Meeting with Bo ss 30 Gain cutting-edge business insights in over 30 two-day and week-long programs designed with your busy schedule in mind The MIT Sloan Executive Education portfolio of short courses, led by senior MIT Sloan faculty, provides the latest insights, strategies, and tools to launch disruptive ideas, reach emerging markets, and develop new sources of revenue... of new market and customer insight enablers “Collect- ing the data is just part of what we do,” he says “It’s really about using that input to come up with market uptake estimates for each potential product and an understanding of its business value That aids us greatly in deciding where to focus our day-to-day activities as well as planning our long-term strategy.” Catalent’s story is similar to that . 4955 customerservice@ strategyandbusiness .info www .strategy- business. com/ subscribe strategy+ business P.O. Box 8562 Big Sandy, TX 75755 strategy+ business magazine. Karl features 32 77 Issue 73, Winter 2013Published by Booz & Company 56 58 63 67 72 46 36 42 90 100 81 86 strategy+ business www .strategy- business. com Published