Deloitte Shift Index Findings: Global Collaboration Will Improve Business Competitiveness

The Deloitte Center for the Edge recently got my attention with its findings that competition is intensifying globally with a US return on assets dropping consistently across 15 different industries by 75% over the last 40 years!

DeloitteFirmPerformance1965-2008

Some other key findings: 

US competitive intensity has more than doubled during the last 40 years. The “topple rate” at which big companies lose their leadership positions, has more than doubled, suggesting that “winners” have increasingly precarious positions. Customers appear to be gaining and using power as reflected in increasing customer disloyalty. 

The exponentially advancing price/performance capability of computing, storage and bandwidth is driving an adoption rate for our new “digital infrastructure,” that is two to five times faster than previous infrastructures, such as electricity and telephone networks.

The Shift Index consists of 3 indices: Foundation, Flow and Impact, plus 25 other metrics that together quantify the stock, pace and implications for change. Given that competition is intensifying, here are some ways organizations might improve their performance.

1. Recognize the Foundation Wave: The business landscape has changed through the spread of the digital infrastructure and this has been reinforced by long term public policy that shifts towards economic liberalization. Changes in Foundations tend to reduce barriers to entry and movement, leading to a doubling of competitive intensity.

2. The Flow Wave looks at drivers of performance shaped by digital infrastructure. This wave looks at the flows of knowledge, capital, and talent enabled by foundational advances. Knowledge flows are the key to improving performance. This is a key area where many conventional businesses fail as they are too insular and have developed serious blindspots. This is the opposite of “Command and Control” leadership.

3. The Impact Wave comes last, as it will take time for companies to participate in and harness knowledge flows leading to improved performance and more innovation.

Successful firms will shift from what’s worked in the past, scalable efficiency to scalable learning. 

This is a huge shift for most large US companies, and many of them are failing due to their closed nature, lack of flexibility and poor use of technology to gallop past competitors and collaborate with suppliers, customers and many other sources to develop innovative products. 

Think Apple Computer when you think about a successful company by these “Shift Index” standards.  Apple has kept its entrepreneurial magic largely by reaching out and being innovative in product development, and using all the technology, including social networks to continue expanding its connection to knowledge. This is a company that knows its customer. It’s no coincidence that Apple customers enjoy the experience of using its products. Who doesn’t just love their iPhone!

The conclusions and details of this study go far beyond what I can cover in a blog.  Check it out. I think a lot of what it preaches is what good competitive intelligence has been preaching for YEARS.  Keep reaching out and connecting both internally and externally and build on the intelligence you gather. Stay connected with people through all the means technology allows you to reach them. Isn’t this the foundation of a good early warning system?

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Improve your Competitiveness: Learn about AIIP

 

Chris Marcy Linda

Chris Marcy Linda

 

Marcy Phelps, CEO of  Phelps Research and AIIP (Association of Independent Information Professionals) President and Linda Rink CEO of Rink Consulting and Chair of AIIP’s Industry Relations Committee were interviewed by Chris Kenneally, Director of Author Relations for Copyright Clearance Center during SLA’s 2009 Annual Conference! In the spirit of cooperative intelligence, here are some facts about AIIP that Marcy and Linda shared.

I must disclose that I am a proud AIIP member, and that I get enough benefit from our electronic community sharing forum to justify the annual membership dues: never mind the local AIIP gatherings we have in Colorado, my home state or the annual AIIP conference–all rich repositories of connection and knowledge sharing.

Another great AIIP member benefit is that many electronic providers of information give us special benefits and discounted rates. This allows AIIP members to reach information that the average person doesn’t have access to. Another reason that information vendors give AIIPers those discounts is that the reach of AIIP is huge, not only our direct clients, but we have a publication, Connections which shares many tidbits of our trade.  Numerous members are authors of books, articles and blogs.

AIIP’s has 600 members in over 20 countries, information professionals who run our own businesses and support businesses which range from start-ups to Fortune 1000 companies. Some members specialize by industry, and one that seems particularly prominent is pharmaceuticals. While many AIIP members are researchers, we also have library consultants, writers, editors, and taxonomists. AIIPers do a lot more than simply find information: many members provide analysis to help clients make sense of the information, and provide ongoing updates.

Many people come to AIIP companies since they have not done their homework, nor do they know how to do their homework or if there is a niche for their business ideas. For example, they don’t know how large the market is for their product or haven’t developed a prospect list or industries to target for marketing. Everything that goes into writing and developing a business plan needs to be researched, and many people think they can just go online and dabble around and get it, and that’s not the case.

Pertinent to the copyright world: AIIP members follow a strict code of ethics, and one of the elements of the code is that we not only have to adhere to and follow copyright laws, but we need to teach others about it.

On a personal note, I specialize in primary research–that is finding and talking to people who “know” the answers to business issues my clients seek. Most AIIP colleagues are experts in electronic research, the necessary pre-requisite to primary research. They dig up awesome information and great contacts for me to follow-up with. My firm gives clients recommendations for action and digs up opportunities for additional revenue streams, which is particularly appreciated in this weak economy.

I feel fortunate to meet my AIIP colleagues in our electronic sharing forum and you can connect with us through our AIIP member directory, which is open source, and you can research and search for an information professional by name, industry expertise, location…

Thank you Chris Kenneally for giving Marcy and Linda this opportunity to share the good news about AIIP! Check out the podcast!

Jeffrey Immelt’s Ideas on Renewing America’s Competitiveness

As we approach this Independence Day in America, my cooperative spirit pushes me to share Jeffrey Immelt’s ideas about how to renew America. Jeff Immelt, CEO of GE is one of America’s stewards of leadership and innovation and I highly recommend that you view his talk given in late June 09 at the Detroit Economic Club.

JeffImmeltAmerica has a myriad of economic problems, not the least of which is it has moved from a technology-driven manufacturing economy to one that is services oriented. We are known as a country where CEOs are viewed as short-term speculators, which has been re-enforced by our “leadership” in the financial global meltdown. There is something seriously wrong when “a mortgage broker is pulling down $5 million a year while a Ph.D. chemist is earning $100,000.”

Jeff thinks the US needs to create an industrial renewal as follows:

1. Invest in new technology

2. Win where it counts in Clean Energy and Affordable Healthcare

3. Become a country that’s good at manufacturing and exports

4. Embrace public/private partnerships

5. Encourage leaders that are also good citizens

During this recession, GE has not reduced its R&D expenditures, which are pegged at 6%, while the US average is only 2% of sales. In 2008, GE exported $19 billion and plans to increase exports each year. GE is partnering with local government to fix the US educational system by investing at inner city schools to improve math and science since only 4% in the US study engineering, which often produces innovators.

GE has two great initiatives to stimulate innovative product development: “eco-imagination” and “health-imagination”. Eco-imagination focuses on alternative, clean energy development and renewable energy products as well as making better use of traditional energy sources. One initiative is a GE + Duke energy coal degasification plant project. America is like the Saudi Arabia of coal supply! Through innovations in health research, GE will launch hundreds of new products in the next few years to reduce the cost of healthcare, particularly in areas like infant care and mammography.

GE invests $1B per year in training. One way this has paid off is that their educated locomotive teams reduced the time it takes to manufacture a locomotive from 100 days to 20. Jeff’s talk is full of these examples of “can do”, which I think is missing from America’s fabric in these tough times.

GE practices what it preaches: it changes with the global demand for its products. Over 50% of what GE produces today didn’t exist 10 years ago. GE will introduce more new products during this recession than any time in its history.

Big business needs to fund small businesses to invent and in the supply chain to compete globally. He states that as “Business leaders we are responsible for the competitiveness of our own country.” This comes from a free marketer and Republican. I wish more of our country’s leadership felt this way. The US is at a competitive disadvantage globally since the private and public sectors are often at odds and do not cooperate like they do in most other countries in the world! The US needs to welcome government as a catalyst for leadership and change. Look at all the creativity and innovation that came from NIH and NASA over the years. The government can be creative and foster cooperation!

I’ll conclude by sharing that Jeff is practicing what he preaches: GE is investing $100 million to develop a manufacturing lab near Visteon Center in the Detroit metro. This will provide 1200 professional jobs to start. Jobs will focus in three areas of innovation: advanced manufacturing technology including applications in aviation and energy products; software applications such as the smart grid; and a training program for information technology. GE is working with the public sector in Detroit and drawing talent from MI universities, in addition to the local work force.

I hope more of America’s leadership adopts Jeff Immelt’s attitudes and practices so America can once again feel proud. US competitiveness will only improve as we become a more self confident society. America’s consumer spending is not going to pull us out of this recession: this alone is not sustainable! America’s business investment in technology, innovation and value-added manufacturing will.

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