Outsourcing innovation

Stephanie Overby of CIO magazine interviews Harvard Business School professors David Pisano and Willy Shih about IT innovation and outsourcing.

Gary Pisano, Harry E. Figgie, Jr. Professor Of Business Administration, Harvard Business School: Just look at what has happened in the mobile communications industry today. A lot of PC companies first gave up manufacturing, and then design. They became reliant on third party suppliers. Now we see what Apple has done with the iPad, and it seems to me there are an awful lot of PC manufacturers scrambling to find an "off- the-shelf" design to compete in the tablet computing space. The problem is, from my perspective, there is nothing unique about any of those designs. They have not competed well against the iPad.

Shih: One global head of IT of a large airline company once told me, "You can't outsource your thinking." I think that captures one of the essences of what we're saying. It's important to understand where your capabilities come from, and how you sustain them.

I think most C-level executives know and understand that this is happening. However, short term thinking and the drive for profits means that not much will change. Most CEOs and CFO only stick around long enough to see bonus paid out of the cost savings.

I used to work in a multimedia research and development lab. In the late 90's I switched to IT engineering.  Now it's IT service delivery management. What's next?

via (@mimmordino)

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  • Mind Of M
    7th August 2011 at 7:49 PM

    Sadly, it is true.  Thanks to our disposable CxO's, we are not the leaders in innovation.  Short term thinking to maximize profits and retain shareholders from running off to the next big thing du jour is the order of the day.  What America needs are real leaders again.

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