Three Profs Win McKinsey Award
Articles about the disastrous effects of outsourcing on the American economy and the origins of creative business strategies have earned three HBS professors top honors in the annual competition for best contributions to the Harvard Business Review. Professors Gary Pisano, Willy Shih, and Clayton Christensen have won the 2009 McKinsey Awards, presented by HBR and McKinsey & Company.
Pisano and Shih took first-place honors for their July-August 2009 article, “Restoring American Competitiveness.” Second place went to Christensen and two coauthors, Jeffrey Dyer of Brigham Young University and Hal Gregersen of INSEAD, for “The Innovator’s DNA” in the December 2009 issue.
In their article, Pisano and Shih argue against U.S. companies’ decision to outsource manufacturing in the mistaken belief that it holds no competitive advantage. As a result, they say, this country has lost not only its ability to develop and manufacture high-tech products like televisions, memory chips, and laptops, but also the expertise to produce emerging “hot products” such as the Kindle e-reader, high-end servers, solar panels, and the batteries that will power the next generation of automobiles.
(The Kindle 2 graphic illustrates their point.)Christensen and his coauthors report the results of a six-year study to uncover the origins of creative business strategies in particularly innovative companies. Their research shows that five “discovery skills” — associating, questioning, observing, experimenting, and networking — distinguish the most creative entrepreneurs from other executives. Not to worry if you’re not born with innovator’s DNA, they assert. It’s something you can cultivate on your own.
Why Amazon’s Kindle 2 Can’t Be Made in the U.S.
In their McKinsey Award–winning article in Harvard Business Review, HBS professors Gary Pisano and Willy Shih point out that the Kindle 2 e-reader was designed by Amazon’s Lab126 unit in California. But the vast majority of its components are made in China, Taiwan, and South Korea, and it is assembled in China.
Flex circuit connector
Made in China
REASON U.S. supplier base eroded as the manufacture of consumer electronics and computers migrated to Asia.
Electrophoretic display
MADE IN TAIWAN
REASON Its manufacture requires expertise developed from producing flat-panel LCDs, which migrated to Asia with semiconductor manufacturing.
Highly polished injection-molded case
MADE IN CHINA
REASON U.S. supplier base eroded as the manufacture of toys, consumer electronics, and computers migrated to Asia.
Wireless card
MADE IN SOUTH KOREA
REASON South Korea used its infrastructure for designing and manufacturing consumer electronics to become a center for making mobile phone components and handsets, especially products using CDMA technology, which is widely used in South Korea.
Controller board
MADE IN CHINA
REASON U.S. companies long ago outsourced the manufacture of printed circuit boards to Asia, where there is now a huge supplier base.
Lithium polymer battery
MADE IN CHINA
REASON Battery development and manufacturing migrated from the U.S. to Asia along with the development and manufacture of consumer electronics and notebook computers.
