Leaner not necessarily better for corporate Headquarters

edit Quick, do you believe that smaller, leaner corporate headquarters are associated with higher performance? A recent study published in the Strategic Management Journal suggests that such a taken for granted belief may not make sense. A very insightful bit of research -

Here's the citation:
Collis D, Young D, Goold M. 2007. The size, structure and performance of corporate headquarters. Strategic Management Journal 28: 383-405

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Is Web 2.0 a bubble?

edit I was recently asked to comment on whether Web 2.0 is a 'bubble' - here's what I think.

Both web 2.0 and the dot.com surge are/were driven by a common human bias: this is to over-state the implications of major societal/business/regulatory changes in the short term and to under-state them in the longer term. The dot.com era companies were, in many cases, prescient. The problem was that they did not quite factor in how long the changes would require to generate cash flows in the near term.

If you look at the statistics, a lot of the predictions made for the dot.com era have by now come true. The Web is destabilizing industries ranging from media to retail to telephony. More and more people all over the world are buying via e-commerce. I believe something like 30% of retail transactions have some e-commerce aspect to them (whether it is searching or getting information as well as actually ordering on line). Efficient markets for everything from the stuff in your closet (eBay) to obscure sound tracks (ITunes and other sites) and even your mate (think match.com) have been facilitated by the Web. It just took 13 years, not 3, for the changes anticipated to become a reality.

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From good ideas to actual businesses

edit Our colleague, Walter Derzko gives some interesting insights into why good ideas don't get results - see his blog at - http://smarteconomy.typepad.com/smart_economy/2007/02/why_good_ideas_.html

With respect to innovation, one study suggests that you need 3,000 ideas to get one commercial launch - see this article: Stevens, G.A., J. Burley. 1997. 3000 raw ideas - 11 commercial success! Research Technology Management 40(3) 16-27.

In a recent study my colleague Thomas Keil and I have just finished, we found that very different management processes are needed to make sure that outcomes other than launch result in good ideas getting circulated in a company.

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Desperate shortage of the college educated

edit I heard a fascinating statistic the other day that really should give all of us pause. It seems that 2/3 of all jobs in America require a college education, yet only 1/3 of the potentially eligible population goes to college in this country. Either we are going to have to drastically ramp up our numbers enrolled, or we will face an even more serious skills crunch than we already have for employees with sufficient skills to work in our new economy. That was really interesting.

Another issue that I don't think we have grappled with very well is the fact that as the economic basis of our businesses change, the skills we need to deploy change as well -- and yet we make few provisions for upgrading skills throughout the life of an employee, consistently and on a planned basis.

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XM and Sirius to merge - Why are we not surprised?

edit So XM and Sirius satellite radio have announced that they are finally going to merge. We called that one years ago! What the two have been doing is engaging in a competitive war of attrition that is guaranteed to end with one killing the other off, or in a desperate bid to avoid the ultimate game of competitive chicken, a merger such as the one proposed.

What is fascinating is how companies get themselves into these situations over and over again. Almost the exact same scenario played out years ago with British Satellite Broadcasting and Rupert Murdoch's Sky TV satellite network. The two went head-to-head with incompatible systems, losing millions of pounds each month, until a merger deal was finally forged, combining the two into B Sky B.

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