Michael Hammer cites the case of a PC-maker that set out to imitate Dell’s famous ‘Build to Order’ system of computer assembly. The company found its attempts were frustrated by both its head of manufacturing, who feared for his job, and its head of marketing, who did not want to upset his existing retail outlets.
William Baumol argues that large companies have been learning important lessons from the history of innovation. Most have both cut back and re-directed their Research and Development spending in recent years. Innovation by big companies is now based less on the discoveries of white-coated scientists, and more on incremental improvements in the processes that constitute daily operations.
According to marketing specialist Vijay Vishwanath, companies also need to adjust to the ongoing fragmentation of markets. Once-uniform mass markets are breaking up into countless “niches”, in which everything has to be customised for a small group of consumers.
Erik Brynjolfsson claims that the roots of the USA’s productivity surge originate in ‘a genuine revolution in how American companies are using information technology to reinvent their business processes from top to bottom’.
Questions
1. the need for companies to cater for ever more specialised sets of customers
2. an explanation for the recent upward trend in the US economy
3. an example of company personnel who resisted innovation
4. a shift in the way many companies are organizing their budgets