McKinsey’s Business Trends to Watch

1 12 2008

McKinsey Quarterly offers some interesting observations on a host of key business trends that are being driven by the influence of technology like Web 2.0. Given the recent discussions, more food for thought.

These trends fall within three broad areas of business activity: managing relationships, managing capital and assets, and leveraging information in new ways.

I want to highlight the first and third in this post. Much of what os.a is all about relates to these MQ Trends.

You can find McKinsey entire article here.

Managing Relationships

Distributing co-creation

Technology now allows companies to delegate substantial control to outsiders–co-creation–in essence by outsourcing innovation to business partners that work together in networks. By distributing innovation through the value chain, companies may reduce their costs and usher new products to market faster by eliminating the bottlenecks that come with total control.

os.a Examples: New businesses created around networks versus traditional management hierachy

Using consumers as innovators

Consumers also co-create with companies… But the differences between the way companies co-create with partners, on the one hand, and with customers, on the other, are so marked that the consumer side is really a separate trend. These differences include the nature and range of the interactions, the economics of making them work, and the management challenges associated with them.

os.a Examples: Tapping end users to “co-create” content, product or services

Tapping into a world of talent

As more and more sophisticated work takes place interactively online and new collaboration and communications tools emerge, companies can outsource increasingly specialized aspects of their work and still maintain organizational coherence. Much as technology permits them to decentralize innovation through networks or customers, it also allows them to parcel out more work to specialists, free agents, and talent networks.

os.a Examples: Extracting more value from interactions

Technology tools that promote tacit interactions, such as wikis, virtual team environments, and videoconferencing, may become no less ubiquitous than computers are now. As companies learn to use these tools, they will develop managerial innovations–smarter and faster ways for individuals and teams to create value through interactions–that will be difficult for their rivals to replicate.

os.a Examples: Ride the LongTail , Web 2.0 Adoption by Companies by Global Region

Leveraging information in new ways

Putting more science into management

Leading players are exploiting this information explosion with a diverse set of management techniques. Google fosters innovation through an internal market: employees submit ideas, and other employees decide if an idea is worth pursuing or if they would be willing to work on it full-time. Intel integrates a “prediction market” with regular short-term forecasting processes to build more accurate and less volatile estimates of demand.

os.a Examples: Prediction markets for associations




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