John Hagel had a great riff at the Innovative Marketing Conference today on companies not understanding -- or deciding -- what business they're really in. According to Hagel, there are three fundamental types of business:
- Infrastructure management: companies that do routine, high volume tasks, such as manufacturing, transportation, call centers, etc.
- Product innovation and commercialization: companies that focus on developing great new products and services
- Customer relationships: companies that based on serving specific customers' needs.
Hmm...but don't many companies do all three, or at least two of three? Yes they do, but according to Hagel that's a problem. It's hard to do more than one of them well, he said, because they each require different cultures, economics, and skills. All three can be profitable, but only if they are managed as a focused business, and companies that try to do more than one typically underperform because they fail to see the inherent internal conflicts.
So what business are you in?
Related Stories: | Topics:Management, marketing blogjam, John Hagel, Innovative Marketing Conference |
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Recent Comments | 3 Total
June 9, 2006 at 9:54am by Jay Jarsh
Looks like Hagel has paraphrased if not plagiarized the subsatnace of "The Discipline of Market Leaders" by Treacy & Wiersema (copyright 1995!!!). This is not new stuff. But it does seem to be getting a renewed traction here recently.
June 10, 2006 at 1:28am by Rob Leavitt
Thanks Jay, similarities for sure -- but Hagel has been on this for a long time himself, including a big piece on "unbundling the corporation" in the Harvard Business Review in the late 90s. And good ideas are worth repeating!
June 12, 2006 at 6:48am by Marcin Grodzicki
I don't quite understand, what is the difference between Product innovation and Customer Relation? Is it a cut between development and sales? But why do we get commercialization then?