Standards & Strategy - Alignment for Competing in Increasingly Open Worlds

Watched this wonderful speech by Rebecca Hendersonof MIT Sloan School.With the eagerly awaited convergence in technology has begun, enabling our PCs, phones, cars and appliances to communicate with each other transparently. “Who,” asks Henderson, “will make money in this world?”. Examine this from the perspective of new overlapping technologies competing to conquer for example the digital home - cable, DSL,ISP's, Munites, Wireles Providers etc. If you are in the business of making “boxes” - say, to play downloaded music, or to compute data—you are facing a dilemma, Henderson believes. Customers are no longer seeking the best designed product, but “a total system experience.” Whether the business involves bicycles or cell phones, medical or financial services, the “future in an interconnected world is about selling parts of interconnected systems,” Henderson says. So firms must “think about controlling architecture or influencing the architecture of the system and building the best products within it.” The challenge will be to seize on the right strategy for competing in a world where a common telecommunications backbone connects devices and people everywhere. If your systems don’t dovetail with the architecture of this telecom backbone, you might face “sudden death” when the market for your product tips toward a different standard. Henderson suggests that organizations are more likely to survive if they embrace public open standards such as Linux, and abandon proprietary software. She advocates “soft standards,” where companies design systems compatible with current and future public standards but at the same time offer customers performance and functionality tailored to their needs.Excellent one to watch.