Shaping strategy

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A company’s bid to rally an industry ecosystem around a new competitive view is an uncertain gambit. But the right strategic approaches and the availability of modern digital infrastructures improve the odds for success.

Shaping Strategy in a World of Constant Disruption
by John HagelIII, John Seely Brown, and Lang Davison

Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 Shaping Strategy in a World of Constant Disruption 11 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications

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Shaping Strategy in a World of Constant Disruption
The Idea in Brief
Hammered by relentless technological change, many companies take a reactive stance: They focus solely on keeping up,protecting their existing markets, and improving their performance. But a few companies take a proactive stance by executing shaping strategies: They use technology changes to create new business ecosystems that benefit themselves and other participants. Take Google’s AdSense: It has reinvented the advertising business by enabling advertisers, content providers, and potential customers to connect withone another quickly, easily, and cheaply. To succeed, a shaping strategy needs a critical mass of participants, say Hagel, Brown, and Davison. Shapers can attract them by: • Convincingly articulating opportunities available to participants • Defining standards and practices that make participation easy and affordable
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The Idea in Practice
To be a successful shaper, take the following steps. To be a participant, look for a firm that takes these steps: COMMUNICATE A “SHAPING VIEW” Formulate a view of the future that highlights how a broad industry or market is changing and identifies the opportunities for a wide range of participants. Example: Salesforce.com’s founder used speaking engagements atsoftware industry conferences not to pitch his new company, but to describe the fundamental forces transforming the business landscape. He explained how, in an increasingly competitive world, companies that managed customer relationships more skillfully than rivals would win. He explained that applications to support customer-centric imperatives (such as salesforce automation) would best be deliveredas network-based services, not discrete software packages installed in enterprises. By accessing these services, companies could reduce their IT infrastructure investments and easily upgrade as new functionality became available. By offering such services, Salesforce.com achieved an $8 billion market cap in less than a decade. DEVELOP A SHAPING PLATFORM A shaping platform is a set of standards andpractices that organize and support participants’ activities—making it easy and inexpensive for participants to develop and deliver their own products or services. Example: Google’s AdSense has protocols governing how ads are submitted, priced, presented, and paid for. It allows even small advertisers and Web sites to invest minimal time and effort, with little oversight from Google, and stillgenerate value for one another. This platform’s scalability makes specialization by participants economically attractive: AdSense can connect the maker of a
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product that appeals to a tiny niche with the largest imaginable pool of prospective buyers of that product. DEMONSTRATE SHAPING ACTS Companies won’t participate in a shaper’s proposed business ecosystem if they worry that the shaper...