The Future of Competition

FAVORITE BOOKS
By Moje Ramos-Aquino, FPM



THE FUTURE OF COMPETITION: Co-creating unique value with customers
By C. K. Prahalad & Venkat Ramaswamy
(Harvard Business School Press)

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Authors Pahalad and Ramaswamy writes: A profound, but silent, transformation of our society is afoot. Our industrial system us geerating more goods and services than at any point in history, delivered through an ever-growing number of channels. Superstores, boutiques, online retailers, and discount stores proliferate, offering thousands of distinct products and services. This product variety is overwhelming to consumers. Am I buying the right digital camera? Am I getting the best treatment for my chronic ulcer? Am I signing up for the right service? Simultaneously, thanks to the propagation of cell phones, Web sites, and media channels, consumers have increased access to more information, at greater speed and lower cost, than ever before. But who has the leisure and the proficiency needed to sort through and evaluate all these products and services? The burgeoning complexity of offerings, as well as the associated risks and rewards, confounds and frustrates most time-starved consumers.

Product variety has not necessarily resulted in better consumer experiences. (end of quote)

All you need is a refreshing drink to perk you up on a lazy morning. Why do you need to make so many decisions very early and the day has just started? By the time you get to your office, you must have already made a hundred and one decisions, big and small.

Thus the paradox of the twenty-first-century economy: Consumers have more choices that yield les satisfaction. Top management has more strategic options that yield less value. Are we on the cusp of industrial system with characteristics different from those we now take for granted? These question lies at the heart of the book, The Future of Competition.

The authors theorizes that the most basic change has been a shift in the role of the consumer—from isolated to connected, from unaware to informed, from passive to active. They explained how the impact of the connected, informed, and active consumer is manifest in many ways. They outlined a progression from the co-creation experience to the innovation of experience environments to a personalized co-creation experience.

The same is true in our own company. You, as the HROD professional is confronted with so many human resource and organization development (HROD) programs for benefits, training and development, business excellence, etc. It is becoming difficult to make choices and so we go back to our connected, informed and active consumers—our employees.

There is a need to co-create value with our employees. Before, whatever management or HR says goes resulting in dissatisfaction, low productivity, labor relations problems, etc..

Though this book talks about business in general, a little imagination will help you distill the ideas and apply them to your situation in HROD. Don’t just read pure HROD literature, read this book and see how top management think and intend to do things.

The authors gave the example of eBay: Pierre Omidyar wanted “to give the power of the market back to individuals, not just large corporations.” So he founded e-Bay to alter the exchange process—buying and selling—by creating an open auction. In 2001, eBay intermediated over 170 million exchanges for $9.3 billion worth of goods in more than 18,000 categories, with revenues of over $749 million. In 2002, it generated revenues of $1.5 billion, on commissions up to 5.25 percent on transactions. Clearly, eBay has succeeded in creating a platform on which to build global economic democracy. Unlike traditional exchanges, eBay does not distinguish between buyers and sellers, only between roles of the moment. I can sell my antique chair and buy a digital camera simultaneously.

In the initial stage, the eBay process focused primarily on three elements of the exchange: choice of products and services, a clear price-performance advantage because of the auction process, and ease of transactions through easy-to-use tools and clear rules. However, as people started participating, a community with its own rules gradually evolved. People acting as merchants would with thank-you notes to those acting as consumers. Buyers and sellers started grading each transaction in a “Feedback Forum.” The evolving rules of engagement enabled a unique customer experience.

As HROD practitioners, how could you help your organization compete head on by giving your employees a satisfactorily unique experience transacting with your office?

BOOKSHELF



CAREER BOUNCE-BACK: The professionals in transisiton
By J. Damian Birkel & Stacey J, Miller
(AMACOM)


OUTSOURCING FOR RADICAL CHANGE: A bold approach to enterprise transformation
Foreword by Thomas H. Davenport
(Amacom)