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Intervention by Denise Caruso Read Intervention by Denise Caruso, Executive Director of the Hybrid Vigor Silver Award Winner, 2007 Independent Publisher Book Awards; Best Business Books 2007, Strategy+Business Magazine

A TALE OF TWO NETWORKS

by Mary Adams ~ July 8, 2008.
Permalink | Filed under: Hybrid Vigor, Valuing Intangibles.

I have been following the story of the Tata Nano car for a number of years now. Tata is an amazing Indian conglomerate that operates in seven business sectors through dozens of companies.

The goal of the Nano team is to develop the world’s lowest cost car with a sticker price of roughly $2,500. A recent peak Inside the Tata Nano Factory in Business Week explains the role that diverse suppliers have played in creating component parts of the car that are better and cheaper than those used in other cars. Bosch supplies the computer inside the engine. Rane, the steering system. Ran, the driveshaft. Coordinating with vendors to bring together all these innovations in a coherent whole is a big part of the work of the Tata team.

This story is similar to the story about the Boeing 787 recounted in Wikinomics by  Don Tapscott and Anthony D. Williams. To build this next generation of the 700 series, Boeing made a radical shift from the past. Power to innovate and design the components of the 787 was pushed down to the vendors as never before. As with Tata, Boeing’s role is more focused on coordination of the design and production than on doing it all themselves.

Networks of suppliers are one of the critical intangibles in almost every business today. Computing power and the internet itself are the drivers of this trend. The easier it is to connect with partners and vendors, the less important it is to keep a function inside the corporation. With growing importance, networks become something that must be managed as carefully as internal businesses. The health, performance and results of network partners are all relevant. But this kind of information is not picked up by management information systems that are built to monitor internal operations. Are you monitoring the health of your network?

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