Stories
Stories
Design Rules: The Power of Modularity (Volume 1)
by Carliss Y. Baldwin and Kim B. Clark
(The MIT Press)
Today's fast-paced global economy often seems to operate as an independent force, but its products, firms, and markets are all derived from human effort and intelligence, as HBS professor Carliss Baldwin and Dean Kim Clark remind readers in their new book, Design Rules: The Power of Modularity. Baldwin and Clark are intrigued by the underlying structure of these human-designed products and systems and the ways in which they evolve beyond their original incarnations to transform entire economies and cultures. Understanding this phenomenon of design evolution, the authors write, "is crucial to comprehending the opportunities and the risks that change creates."
The authors describe their book as an examination of "the process of design and how it affects the structure of industry." From a business landscape replete with possibilities, they select a single modern-day example -- the electronic computer -- as the focus of their study. Baldwin and Clark argue that the computer industry could not have experienced its unprecedented levels of innovation and growth without embracing the concept of modularity -- the building of complex products from smaller subsystems that can be designed independently yet function together as a whole. It was modularity, the authors assert, that freed designers to experiment with different approaches while working within the norms of established design rules.
Thus, the computer industry was transformed from a quasi monopoly (dominated by IBM) into a large modular "cluster" of related subindustries, a development made possible by the decentralization and multiplication of design options. When the forces of modular design eventually took center stage in the early 1990s, the computer industry's balance of power -- economic and strategic -- was changed forever.
As Baldwin and Clark explain, "The architecture of modularity partitions designers' efforts and efficiently coordinates their actions." The process of design evolution "directs their searches and appropriately rewards their efforts." The result of this dynamic has been one of history's great technology success stories.
In a second volume of Design Rules, the authors will examine how the interrelated processes of design and industry evolution operate once a modular cluster has formed.
American Business, 1920–2000: How It Worked
by Thomas K McCraw
(The American History Series/Harlan Davidson)
The past decade has brought such enormous change to the business world that it can be easy to lose sight of the equally tumultuous periods that have preceded it. In American Business, 1920–2000: How It Worked, Thomas McCraw, the Isidor Straus Professor of Business History, presents a succinct and insightful analysis of the entrepreneurs and companies that have left their impression on world industry. McCraw examines these economic developments in the context of events such as World War II, tracing the decentralizing effects of the draft, rationing, and Ferdinand Eberstadt's Controlled Materials Plan. Also included are overview chapters on the impact of women and African Americans on business, as well as considerations of three vital sectors of the American economy: finance; chemicals and pharmaceuticals; and computers, Silicon Valley, and the Internet.
From the past eighty years of "relentless change," McCraw offers colorful illustrations of how business transformed the country's economic and cultural landscape. Alfred P. Sloan's stunning turnaround of General Motors and his creation of multidivisional structures present a fascinating portrait of one of the century's most impressive business minds. Neil McElroy and D. Paul ("Doc") Smelser of Procter & Gamble introduced soap operas to radio and television audiences, a marketing coup that resulted in "the longest-running and most successful media strategy in U.S. advertising history," according to Advertising Age.
McCraw reminds readers that despite the present-day size of behemoths such as McDonald's and Ford Motor Company, each began as a small, entrepreneurial venture. And as unique as each company's innovations may have been -- whether it was Ray Kroc's refinement of franchise economics or Henry Ford's perfection of assembly line production -- every organization faced the key business problem of determining where to place the decision-making power along the employee-manager continuum.
"The outburst of information technology capped an eighty-year trend in which decision rights moved mostly downward within business hierarchies," McCraw concludes, highlighting factors such as increased consumer power, intensified competition, and the human toll from corporate downsizing as a few of the other significant developments of the latter part of the 20th century. As entirely new economies and industries continue to evolve at a dizzying pace, American Business, 1920–2000 provides a welcome vantage point for appraising the past and surveying the future.
Low Risk, High Reward: Starting and Growing Your Business with Minimal Risk
by Bob Reiss with Jeffrey L. Cruikshank (foreword by Howard H. Stevenson)
(The Free Press)
Entrepreneurs are not risk seekers; they are risk managers, risk sharers, and risk minimizers.
This is a central lesson in Low Risk, High Reward, a new book by Bob Reiss (MBA '56) and former HBS Bulletin editor Jeffrey Cruikshank (51st PMD) that is based on Reiss's experiences as the founder of fourteen successful start-up companies. (One of these start-ups, a novelty-watch distributor, was named one of the nation's fastest-growing companies in 1992, 1993, and 1994 by Inc. magazine.) In addition, Reiss draws upon several dozen interviews that he conducted with other entrepreneurs in a variety of fast-moving industries.
Reiss explores entrepreneurial issues across the life span of a company, from finding good ideas, to raising money, to building products, to getting orders and reorders. He also focuses on the skills and attributes of the successful entrepreneur, including a separate chapter on what he calls "numeracy": the ability to understand and use numbers to help one's business. Included in the book is a useful appendix that instructs the reader in how to create and read a twelve-month operating cash flow statement.
Many HBS readers will recognize "The R&R Case," by HBS professor Howard Stevenson. Introduced in the 1980s, the case focuses on one of Reiss's business ventures, and for many years it was the first case taught in entrepreneurship electives at the School. Reiss provides his own commentary on the case, which distills a number of the important themes in the book.
In the book's introduction, Reiss writes that Low Risk, High Reward is intended for a wide spectrum of readers -- from those who already own their own businesses; to nine-to-fivers poised to take the entrepreneurial plunge; to graduate-school, college, and even high-school students for whom entrepreneurship is still a distant dream. In Low Risk, High Reward, Reiss offers them all a key piece of advice gleaned from his many years on the entrepreneurial front lines: "Working smart can be even more important than working hard."
HBS Press Books in Brief
Leading the Revolution, by Gary Hamel, offers an action plan -- indeed, an incendiary device -- for any company or individual intent on becoming or persevering as an industry revolutionary. This book will ignite the passions of entry-level assistants, neophyte managers, seasoned VPs, CEOs, and anyone else who worries that their company may be caught flat-footed by the future.
More Than a Motorcycle: The Leadership Journey at Harley-Davidson, by Rich Teerlink and Lee Ozley, is the story of the purposeful transformation of an American icon. Part corporate biography and part memoir of a rare CEO/consultant partnership, this book chronicles Harley-Davidson's transition from a command-and-control culture to an open organization in which employees take responsibility for charting their own course.
The Harvard Business School Guide to Careers in Marketing, 2001 Edition, will prove an indispensable resource for anyone considering a career in marketing. Based on the research and experiences of HBS graduates, students, and faculty, this all-in-one career guide describes marketing career opportunities and provides guidance on the recruiting process.
Harvard Business Review Interviews with CEOs contains insights on cutting-edge issues and timeless business topics from prominent CEOs. Eight interviews create an extensive and stimulating seminar on the latest business practices. (Paperback)
Harvard Business Review on Work and Life Balance provides offerings ranging from the renowned "mommy-track" article to perspectives on telecommuting that will help HR professionals and employees at all levels understand the often delicate balance between our professional and personal lives. (Paperback)
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