Tuesday, April 29, 2008

Live, from Interop, it's Tuesday morning!

Well, we’re off to a great start, I thought. It was 9:40 am, and I hadn’t hooked up with my 9:30 meeting – the first of the first day of this massive conference for networking (in every sense of the word). It didn't bode well. However, that time lapse did give me a chance to briefly thumb through a new book by this morning’s keynote speaker, C.K. Prahalad, titled “The New Age of Innovation: Driving Co-Created Value Through Global Networks.” Prahalad, a noted professor at the Ross School of Business on the University of Michigan campus in Ann Arbor, believes new principles of innovation need to be followed if businesses are to remain competitive in this 21st century. One of his guiding principles is that companies should focus on the user experience of each individual customer. He adds, though, that no business has the resources to fulfill each individual’s desires, so there needs to be a shift from owning resources to having access to them. Prahalad notes that businesses have been built on a model created by Henry Ford; each car is the same, has the same features, and is the same color. When customers demanded differentiation and customization, car companies offered different colors, air conditioning, power steering and windows. But again, the choices were limited to what the car company had at in its warehouse. (How many times have you settled for a silver car because the salesman told you that there were no more dark blue cars available?) Prahalad cited Apple as a company that is winning by implementing the twin principles above. With the iPod, for instance, users can download their own songs and create individual experiences. Carrying it further, users also can download videos, podcasts and other assets that Apple neither owns nor controls – creating a truly innovative business model. This new competitive landscape reflects a social movement, in Prahalad’s estimation. There’s a whole generation of consumers who, thanks to Facebook, YouTube and other sites, “will grow up expecting to be treated as unique individuals, and they will have the skills and propensity to engage in a marketplace defined by” this notion of individualized experiences, Prahalad writes.
It’s a fascinating book, just published and released, and available at http://www.amazon.com/New-Age-Innovation-Cocreated-Networks/dp/0071598286

-- David Rubinstein

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