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JoAnn Hackos, PhD
CIDM Director
www.infomanagementcenter.com
A report in the August 4, 2002, issue of the Financial Times (FT) focused
on the "twin challenges that today's executives face—to deliver efficiency gains
while creating new sources of growth." As we all recognize, the pendulum has
swung in the past several years toward efficiency—what Peter Drucker described
30 years ago as "doing things right." Cost cutting—layoffs—outsourcing—offshoring.
All are attempts to boost profits by lowering costs at a time when higher revenues
are elusive.
But efficiency has its limitations, as Drucker made clear. The most efficient
producer of buggy whips is out of business today. Only by pursuing the "evil twin,"
effectiveness will our companies succeed in maintaining leadership positions in their
markets. Our theme at the Best Practices conference this year, Innovation: Making
It Happen, echoes the FT's month-long summer school. How do we ensure that our
organizations are effective? How do we know what "right" things to focus on, rather
than endlessly optimizing the same old products and processes?
Key speakers at the FT summer school, W. Chan Kim and Renee Mauborgne, are the
authors of the Harvard Business Review article, "Tipping Point Leadership."
This article, along with Malcolm Gladwell's book, The Tipping Point, and John
Kotter's, The Heart of Change, are center points for the CIDM Best Practices
conference and the yearlong Innovator's Forum that begins in September.
Kim and Mauborgne argue that our organizations are being ill served by their
focus on beating the competition. When companies concentrate on making their existing
practices more efficient than those of the competition, they ignore opportunities to change
the nature of the business through innovation. They note that divergent thinkers in
the airline industry, like JetBlue, continue to increase market share by taking
customers away from the big airlines. The big airlines engage in massive cost cutting
but seem unable to change the nature of their business.
Information development faces the same challenges. We seek to become more
efficient through single sourcing, content management, and changes to internal
processes. We work very hard to produce the same content with fewer resources.
But when someone suggests that we innovate by learning what customers really need,
we shrink away, unwilling to assume responsibility for the customers' experience with
information delivery. We argue that we have no time to study customers and still
deliver on deadline. We claim that "they won't let us" spend time on innovation.
The lecturers at the FT summer school have a solution to the
stalemate—outsourcing. If an organization cannot find innovative thinking
inside their organizations, they should pursue resources outside.
For most managers, outsourcing means pursuing efficiency, not effectiveness.
Information development is outsourced to decrease personnel costs, not to develop
innovative solutions. However, that has not always been the case. In fact,
we detect an emerging interest in outsourcing to organizations that provide
innovative and cost-effective solutions to delivering information to customers.
Twenty years ago, a small number of innovative suppliers dominated the
information-development market. They largely disappeared when lower
costs, not innovation, became dominant, and were replaced by large contract houses in
the US and now in developing nations like India.
How should we respond to the twin challenges? I argue that we should pursue them
both aggressively. Certainly, we need to reduce the costs of developing information
in every way we can. But we cannot neglect innovation. In fact, to do so invites
outsourcing. The giant tomes that describe everything there is to know about a
product can easily be produced elsewhere, by less costly workers. But minimal,
innovative approaches to information development can be produced only by people
who know the customers well. The answer then is to pursue innovation, including
reaching outside the company to premier information designers for new ideas.
Join me at the Best Practices conference and the first session of the
Innovator's Forum in September. You'll be happy you did.
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