Technology is rapidly changing the business landscape. Industries are no longer clearly defined. The advent of the smartphone and popularity of mobile apps, for example, have driven companies in every industry to get in the software development business. As a result, it can be difficult to determine where to direct your energy and investments. Experts warn executives not to lose sight of their core business and to invest accordingly.
In the Harvard Business Review article, Unbundling the Corporation, John Hagel III and Marc Singer define three major business types:
- “The role of a product innovation business is to conceive of attractive new products and services, and figure out how to best bring them to market.”
- “The role of a customer relationship business is to find customers and build relationships with them.”
- “The role of an infrastructure business is to build and manage facilities for high volume, repetitive operational tasks such as logistics and storage, manufacturing, and communications.”
It’s likely that your company is involved in each of these lines of business. However, very few companies can focus on more than one of these areas well. And yet, that’s what too many companies attempt to do. The problem, according to Hagel and Singer, is that “Although organizationally intertwined, these businesses are actually very different. They each play a unique role; they each employ different types of people; and they each have different economic, competitive, and even cultural imperatives.”
Put simply: The different lines of business tend to be at odds with one another. You can’t invest in R&D while trying to minimize costs. As a result, if you stretch your company across more than one business, you risk doing none of them well and ultimately failing. In order to succeed in today’s marketplace, you must decide which type of business you are, and then invest accordingly. Let’s take collaboration technology as an example.
Investments in collaboration technology should focus around facilitating communication between the key players that are responsible for bringing those goods or services to life: engineers, researchers, designers and developers. The solution should make conversations as natural as possible as the format is likely to be free form. The technology should also be pervasive as conversations need to happen as needed.
Customer relationship management
Nothing builds customer relationships better than face-to-face communication, but being in the same room with customers isn’t always feasible. If this is your area of focus, collaboration solutions should be available to functions like marketing, sales and customer service, and be open and easily accessible to customers.
If you’re in the infrastructure management game, you need to be lock-step with your supply chain. Staying connected in real-time with distributors, wholesalers and other suppliers is critical for greater inventory management, tracking and reporting, and receiving updates on trends and insights to ensure the right products are delivered and stocked. A collaboration solution should enable you to connect with suppliers in real-time at the store-level to discuss critical updates that impact product deliverables.
Regardless of which business type is your focus, your investment in a collaboration solution will inevitably extend beyond it. Hagel and Singer write, “These three businesses—customer relationship management, product innovation, and infrastructure management—rarely map neatly to the organizational structure of a corporation. Product innovation, for example, typically extends beyond the boundaries of a product development unit to include such activities as conducting market research, qualifying component suppliers, training sales and support people, and designing marketing materials. Rather than representing discrete organizational units, the three businesses correspond to what are popularly called ‘core processes’—the cross-functional work flows that stretch from suppliers to customers and, in combination, define a company’s identity.”
Again looking at collaboration solution investments to illustrate this concept, this notion of facilitating core processes means that if you’re a product innovation company, you don’t just give collaboration solutions to engineering. Rather, you allow engineering to help define the major processes and workflows that would benefit from a collaboration solution that is rolled out cross-functionally.
If you’ve been considering investing in collaboration solutions for your organization, define your business type and start your roll-out with that area of the business. When you facilitate more efficient and effective communication in alignment with your key differentiator, your product or service becomes exceptional in a world of commodities.