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Emerald Group Publishing Limited
Article Type: Editor’s letter From: Strategy & Leadership, Volume 43, Issue 4
A number of the offerings in this issue examine the new role of the customer – from the perspective of the mobile Individual Enterprise, customer-focused IT and the management revolution precipitated by continuous innovation. We also unveil an intriguing M&A methodology, a contrarian view of cash strategy, and a case study of the implementation of a new vision. The articles and their distinguished authors are:
“The individual enterprise: all for one and one for all” by IBM consultants Fred Balboni, Saul J. Berman and Peter J. Korsten. The emergent Individual Enterprise is enabled by mobile devices that use sophisticated analytics to put consequential information in the hands of a new breed of empowered employees. But there’s a bigger opportunity: organizations that design their business and information systems with this Individual Enterprise model in mind can evolve their business models, or even create totally new ones, and thus realize the full transformational benefits of mobility. The goal of companies that undertake this design challenge is ever more engaged and appreciative end customers who get precisely what they need, when and where they need it, at lower cost.
“Customer-focused IT: a process of continuous value innovation” by V.K. Narayanan, Professor of Strategy & Entrepreneurship and the Director of the Center for Research Excellence at LeBow College of Business, Drexel University. Transition to a digital economy and the pervasiveness of IT in a firm’s operations together has brought the IT function in corporations to the threshold of a needed transformation: from an orientation that prizes technical excellence to one that achieves continuous innovation by finding new opportunities to provide value to customers. Chief Information Officers (CIO’s) are uniquely positioned to lead this transformation and associated innovation initiatives for their corporations.
“Customer preeminence: the lodestar for continuous innovation in the business ecosystem” by Stephen Denning, the author of The Leader’s Guide to Radical Management. The emergence of the customer as the lodestar for guiding corporate value-chain decisions is a striking feature of the 21st Century business landscape. The transformation of customers from passive consumers to their new role as, in effect, the determining partners in corporate strategy has produced a fundamental rethinking of how a corporation must be led and managed. Continuous innovation requires a shift from vertical to horizontal management. It’s not just a new process or methodology, but a different ideology – a different way of viewing and acting in the world.
“A new M&A methodology: five lessons in anticipating post-merger resource interactions and challenges” by Sayan Chatterjee and Nir N. Brueller offers a Merger Information Advantage strategic framework. The value and the associated premium from an M&A come from the subsequent interactions of the combined resources of the two firms. The authors map the typical integration challenges of five categories of M&As with specific resource interactions, and show how acquirers can develop an information advantage for each category. Their research shows that the best single predictor of information advantage is an acquisition process built around an acquisition process that allows a firm to really understand one type of resource interaction in-depth. This knowledge becomes its competitive advantage.
“Revisiting the concept of a competitive ‘cash advantage’” by Joseph Calandro, Jr, a managing director of a global consulting firm and Fellow of the Gabelli Center for Global Security Analysis at Fordham University. When firms do not have productive ways to invest in growth – through imminent value-adding acquisitions or promising innovation initiatives – conventional wisdom holds that a payout to shareholders is a sensible course of action. For some firms, though, a substantial cash reserve can provide a critical strategic advantage, enabling them to confidently take action during downturns when competitors must be cautious or to bargain hunt for weakened rivals during financial crises.
“Case: S Group’s vision for strategic transformation: ‘Your Own Store’” by Kari Neilimo, Hannu Kuusela, Elina Närvänen and Hannu Saarijärvi. In 2005, the S Group – formed in 1904 in Finland as a network of customer cooperatives – committed to creating and implementing a new company vision: Your Own Store. In their concept Your Own Store is owned by its customers, has an extensive retail store network close to the customers, provides various rewards for customer members, is prosperous and financially viable and is connected to and supported by the local community. The S Group vision linked five operating dimensions together to create a new business model that could compete with price-cutting retailers. Using the vision to guide practice, the managers were able to revitalize the cooperative brand and make acquisitions that produced value for the cooperative customer.
And don’t miss Kenneth Grossberg’s crotchety column, “Customer service is core to strategy, but it’s under threat.”
Robert M. Randall