These two authors show how a business can differentiate itself and offer a substantial value added. By delivering superior goods and services, these will not be subject to commodity pricing anymore, and will reward their respective companies with premium pricing, higher ROE, and higher shareholder value.
The value added comes from involving the customer in co-designing the product he wants, and servicing the product with the customer's ongoing online feedback. The author gives several examples of companies that are using these practices of the future today. Sumerset Houseboats, a houseboat construction company, actively engages its customers in the boat designing process. Deere, the farming equipment manufacturer, has developed a GPS system that monitors and diagnoses farming equipment usage and equipment problems by its farming customers.
There is no question that such intense customer centric practices represent substantial competitive edges. The companies that can innovate and deliver such services at a profit will become the winners of tomorrow.
Imagine if nowadays you could truly benefit of such troubleshooting services on your home PC. Offsite, the computer manufacturer would monitor that the latest virus, bugs, spyware have not infected your system. If it did, it would clean up your system automatically and restore it to health. Would not you think that such a PC would be worth a 100% mark up over the current commoditized PC that typically falls apart within months after being attacked endlessly by bugs.
The type of co-created added value the two authors talk about is the best step forward in protecting the U.S. technological lead going forward. The companies that do that well will survive and thrive. The ones who do not will see their products being taken away by lower cost competitors delivering the same commoditized products utilizing Chinese manufacturing and Indian programming. Given that the two professors are of Indian origins, no one can argue they did not give us a fair warning.
This book is well written and very innovative. If you are an entrepreneur, business strategist, business consultant, MBA student or professor, this is a must read. If you are none of those, it is still a very interesting and important book showing a good roadmap on how the U.S. can maintain its technological leadership.
Contrary to what that reader from Dallas argues, the book actually meets and exceeds the premise and objectives it sets for itself. Let me highlight some of these:
"This book sets the agenda for top management for co-creating the future."
"Our task is here to 'amplify weak signals' from a diversity of institutions, industries, and countries, and to represent readers with a new frame of reference for value creation."
"While we do not suggest a revolution, we do see wide departures from traditional ways of sensing, thinking, and doing."
"Throughout this book, we use a lot of examples as thinking props to convey our perspective and key ideas, not to illustrate best practices."
Given all these disclaimers, it is not fair to criticize a book for not being what it never claims to be in the first place. I advise the readers to carefully read the preface before considering buying or reading the book. If you determine you fit the profile of the intended readers and engage the book with the right mind set, you will be well rewarded with your investment.
There is a little bit of that in here - - but you must muddle through poorly highly academic/esoteric/jargon-laden prose to find it (For example: "Thus, a key variable in the quality of the transaction experience is consumer heterogeneity").
Beyond that, the book goes way off focus at times, spending pages, for example, to discuss how a company built an information network that let its employees worldwide find a solution together for a particular customer problem. That is neither new, nor "co-creating value WITH CUSTOMERS."
Most disappointing of all - - there is lots of discussion about what companies are doing, but virtually no ROI info attached to prove that what they are doing is really better for the companies' bottom lines or shareholders.
What the authors are saying about the future of the relationship between companies and their customers is fundamentally true. It is a shame they did not engage a stronger writer and/or editor who could help them make their case more persuasively.