October 2006 Archives

Eric E. Olsen, Frank Plaschke, Daniel Stelter have written an excellent paper which is posted on the Boston Consulting Group web site entitled "Spotlight on Growth: The Role of Growth in Achieving Superior Value Creation".

The paper starts with several questions:

1. "How much revenue growth does a company need in order to achieve its aspirations for shareholder value?
2. What is the right tradeoff between that growth and other priorities - for example, improving returns on capital or increasing payout to investors?
3. Does the source of growth matter? Should a company focus on organic growth, acquisitive growth, or both?
4. How does growth affect a company's valuation multiple?
5. What is the right tradeoff between sort-term and long=term growth?
6. How should a company's growth strategy be positioned with its current investors?"

As one would expect from a BCG study, these questions are explored in depth. The articles appendix includes an analysis of companies that have created value via growth.  The answers are surprising.  It is worth a look.

Jonathan Schwarz is the chief executive officer and president of Sun Microsystems.  He writes a weblog that is worth reading: Jonathan's Blog, and in fact, he contributes to his blog much more frequently than other CEOs. 

On September 12, he wrote a comment in the Financial Times entitled "The five founding principles that drive innovation".  Here is a brief summary.  Needless to say, the article is worth reading.

1. Hire the best and let them lead you. Build and encourage a culture of leadership regardless of title or department and ensure there is communication and interaction between leaders of different departments and product groups.
2. Share. Create communities with partners, customers and business groups that allow collaboration and open innovation. After all, this is the “participation age”.
3. Create small groups and give them autonomy. Steering committees do not work. Create task forces with the ability to identify and create projects that matter. Bring in different voices in the brainstorming phase.
4. Allow public debate. Transparency of ideas and debate is always healthy but you have to know when the debate should end. Then move quickly to focus resources towards achieving the goals.
5. Have the courage to make hard decisions. At Sun, this was to invest when others were cutting and to drive increased focus in our engineering operations.

Stephen Downes describes the differences between groups and networks in this video on google.  I found this on elearnspace.org:

http://www.elearnspace.org/blog/archives/002628.html

Stephen nails it perfectly: "Groups require unity, networks require diversity. Groups require coherence, networks require autonomy. Groups require privacy or segregation, networks require openness. Groups require focus of voice, networks require interaction."

This discussion has significance to knowledge management since groups and networks share information in very different ways.