Business networks and the sharing economy are topics of increasing interest, as businesses begin to recognize the implications they will have on the Future of Business. To dive deeper into these topics, we launched the Future of Networks interview series where we have been reaching out to experts across the globe to learn more.
This week’s interview is with Joe Pine (@joepine), internationally acclaimed author, speaker, and management advisor to Fortune 500 companies and entrepreneurial start-ups. Joe is also the cofounder of Strategic Horizons LLP. Joe shares his predictions for the sharing economy and his perspective on the benefits of a truly networked supply chain.
An informal “sharing economy” is beginning to emerge out of the fact that everyone is connected together—things like car sharing and house sharing. Where do you see that going?
This is a very intriguing development, one that has already gone beyond the niche that most people might have expected. The logical conclusion is that we will see markets for the sharing of most all consumer durables over time, anything that has significant value (so that some will not want to spend the money to buy them), that is often left unused and idle, and which people do not mind sharing. (While designer handbags fit the bill, men’s shoes not so much.) What will be interesting is when companies go beyond one particular thing (cars, houses, handbags, etc.) and start becoming exchanges for all things sharable — as Amazon went beyond books to pretty much all things remotely buyable (double entendre intended).
What are the implications of having a truly networked supply chain where everyone is connected in real time?
The possibilities are great, especially if you extend the supply chain into a demand network that encompasses customers — in fact begins with the customer with the capabilities of the company and its suppliers and partners pulled from that point of demand. So then customers themselves — whether consumers or businesses — can be part of that network, where you have access to them and their individual wants and needs in real time, responding instantaneously to new demand by dynamically reconfiguring the network’s capabilities to meet it.
As companies outsource more and more to their supplier networks how will this affect their ability to innovate?
Outsourcing affects innovation, no doubt. When companies turn over parts of their business to other companies, they effectively lose the capabilities they once had in that arena, and therefore the ability to innovate. Where the function is not core to how the company creates economic value — outsourcing cleaning, cooking, parking, and so forth, and for some companies (not most) manufacturing and IT — then that’s fine, and the company may even gain benefits of the innovation its outsourcing partner introduces because that function is core to how it creates value. It can be a problem when the function is core, however, for not only does a company tend to lose the innovation possibilities inherent in what it outsourced but also the effects of that arena networked with the rest of the company’s innovation capabilities.
Now there are ways to ameliorate this — and picking the right outsourcing partner is key, so that they understand your needs and innovation desires. But also, realize that we can use the open innovation possibilities to not only work forward to customers but backward to suppliers, including outsourcers. So do not neglect the opportunities for continued innovation with your outsourced partners.
Joseph Pine is an internationally acclaimed author, speaker, and management advisor to Fortune 500 companies and entrepreneurial start-ups alike. He is cofounder of Strategic Horizons LLP, a thinking studio dedicated to helping businesses conceive and design new ways of adding value to their economic offerings. Connect with Joe on Twitter @joepine and on LinkedIn.Comments