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Value Creation through Networks

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My presentation at Google's Inspiration Day in March 2013 in Stockholm

Published in: Business

Value Creation through Networks

  1. 1. March 2013 www.hhs.se
  2. 2. "...when the rate of change outside an organization is greater than the rate of change inside, the end is near...." Jack Welch…
  3. 3. Increasing pace of change  Of original Forbes 100 in 1917 - 61 companies ceased to exist by 1987 - 18 of remaining 39 underperformed market by 20% - Only 2 beat market index (GE & Eastman Kodak) - Only 1 (1%) today!  Average S&P 500 company lifespan − 1920s – 67 years − 2010s – 15 years  Dr. Richard Foster, Yale, Sept 2012 − Today's rate of change is at faster pace than ever − By 2020 prediction is > 75% of S&P 500 will be companies we do not know about today http://www.fastcompany.com/3001444/what-zara-pg-and-berlitz-know-about-agility
  4. 4. A Big Bang in the Information Universe 2.7Bln daily comments and ”likes” on Facebook 500Mln daily posts on Twitter and Weibo combined 200k videos uploaded to YouTube daily http://en.wikipedia.org/wiki/Internet, Tomas Larsson, 2012
  5. 5. Big Data is now big money http://hbr.org/2012/10/data-scientist- the-sexiest-job-of-the-21st-century/ar/1
  6. 6. ”No one knows everything, everyone knows something, all knowledge resides in humanity.”networks Adapted from Lévy 1997 Six degrees of separation - Milgram, 1967
  7. 7. Yet we are stuck in our old ways at work…
  8. 8. If only we knew what we know…..
  9. 9. Challenges •Overly connected people •Invisible network silos •Poor awareness of expertise •Network outliersU.S. Brazil Angola Saudi Arabia Canada U.K. Nigeria U.S.Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria U.S. Brazil Angola Saudi Arabia Canada U.K. Nigeria U.S.Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria U.S. Brazil Angola Saudi Arabia Canada U.K. Nigeria U.S. Brazil Angola Saudi Arabia Canada U.K. Nigeria U.S.Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria Networked collaboration brings results Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria Gulf of Mexico Brazil Angola UK Canada Saudi Arabia Nigeria Business results •Poor quality cost down 66% •Operational productivity up 10% •New product revenue up 22% •Customer satisfaction up 24% Cross 2010 Before After
  10. 10. Closed networks lead to failure http://www.enronexplorer.com/focus/19185# Ken Lay CEO of Enron
  11. 11. Exploitation Improving existing value creation activities Exploration Developing new value creation activities Adapted from March 1991
  12. 12. DEMO! From problems solvers to solution finders Open innovation in health care $100mln open innovation challenge 500 submissions
  13. 13. Where have the traditional sources of sustainable competitive advantage been? #1 Innovation Networks of relationships Brand & Reputation FIRM Kaye 1993
  14. 14. #1 Innovation Networks of relationships Brand & Reputation FIRM T Where are tomorrow’s sources of sustainable competitive advantage? Teigland 2010
  15. 15. Est. $30 mln sales 30% profit margin in commodity business 20 employees but a 24x7 global “workforce” of 2.4 million No internal R&D or sales & marketing Threadless A platform for global community collaboration
  16. 16. Shifting market logic Adapted from Ericsson & Augur 2011 Economies of scope and reach
  17. 17. What’s around the corner? 24x7 Global Internet Collaboration + Open Source + 3D Printing http://mashable.com/2013/02/13/robohand/ $60,000 $150 Available for free download on
  18. 18. The Firm The Collectivevs E.g., Microsoft ~ Built by employees within organizational boundaries E.g., Linux ~ Built by users and distributed freely regardless of affiliation Models of Value Creation Teigland, Di Gangi, & Yetis 2012
  19. 19. Some things do not change Innovation Exchange Exchange Trust Trust Relationships Relationships Interaction
  20. 20. What should you think about? How to let go of control? How to enhance networked collaboration inside your organization? How to engage the “crowd” outside your organization?
  21. 21. Karinda Rhode aka Robin Teigland robin.teigland@hhs.se www.knowledgenetworking.org www.slideshare.net/eteigland www.nordicworlds.net RobinTeigland Photo: Lindholm, Metro Photo: Nordenskiöld Photo: Lindqvist If you love knowledge, set it free…

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