The Connected Company

Good profits come from creating value for customers. Bad profits come at the expense of happy customers and long-term sustainable growth. Bad profits come from customers who are locked in, who feel trapped or abused. Bad profits come from nuisance fees, like airlines charging extra for checked baggage, car rental companies charging $10 per day for

The complexity of the new networked, interdependent economy creates an ambiguous, uncertain, competitive landscape. Companies must be flexible enough to rapidly respond to changes in their environments, or risk extinction.

What is true in nature is also true in strategy. Strategies don’t evolve in a vacuum. They coevolve, as organizations interact with each other and with their environments.

If change is happening on the outside faster than on the inside the end is in sight. — Jack GE Welch

This works for McDonald’s because they have narrowed customer expectations to match a factory-like service.

A company where most of the policies and procedures that constrain and limit employees are unnecessary, because every worker is fully authorized to act as a representative of the company, to make decisions, and to authorize expenses when necessary. If you can imagine these things, then you are imagining a learning company.

Service networks thrive by making a set of complementary services more easily available to customers.

We no longer live in an industrial economy. We live in a service economy. And to succeed in a service economy, we will need to develop new habits and behaviors. And we will need new organizational structures.

When in doubt, don’t look inside your company for answers. Turn around and face the market. Get back in touch with your customers.