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what’s flat, has a long tail and is meshed? our small yet complex world!!

Edge is Core – Consultant urges bee model for business success

June 02, 2010|By Tom Abate, Chronicle Staff Writer

Businesses and individuals should behave like bees, constantly in search of new ideas and opportunities, rather than squirrels that find and hide goodies, says a consultant with a new take on how to compete in a global economy.

John Hagel III, with Deloitte Consulting's Center for the Edge in San Jose, lays out this strategy for success in a book, "The Power of Pull: How Small Moves, Smartly Made, Can Set Big Things in Motion."

Hagel and his co-authors, Silicon Valley thinker John Seely Brown and editor Lang Davison, wrote "Pull" to encapsulate a problem they've observed with Western businesses – a long-term decline in return on assets. In 1965, they said, businesses earned an average of $4.72 for every $100 in assets. This return has fallen to 52 cents per $100 of assets in 2008.

Their prescription for reversing this decline is to work smarter, by creating networks that can respond to new opportunities or challenges.

"We call it shaping serendipity," Hagel said. Companies – and individuals – must partner with others who can help them, using conferences, personal meetings and social networks to find potential collaborators.

Hagel said this runs contrary to Western business thinking, which holds that competitive advantage comes from exploiting some knowledge or process that should be guarded, like the formula for Coke.

But in a rapidly changing world, Hagel said, advantage comes from a network of partnerships to pull together skills, materials and processes that no single company may own.

He cited the success of the Chinese company Li & Fung, which has created a worldwide network of 10,000 suppliers in pursuit of its basic business – filling apparel manufacturing orders for global brands.

"If you go into any shopping mall roughly 40 percent of the apparel is connected to the Li & Fung network," he said, because the Chinese firm can find the right materials, manufacturers and turnaround times for an unimaginable variety of projects.

Hagel offered the iPod as a case of how this is already taking effect behind the scenes.

He traced the iPod's genesis to the former Silicon Valley firm PortalPlayer, which employed a networking model to create a series of music players for Japanese manufacturers.

Hagel said Apple CEO Steve Jobs fused PortalPlayer's underlying technology with an idea being circulated by entrepreneur Tony Fadell, who argued for the creation of a music-distribution service. Apple wrapped all of that up in a device with its vaunted aesthetic appeal.

"The mythology is that the iPod resulted from the genius of one guy, but the actual story is more complex," he said.

Posted via email from edge is core


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