competing in the networked economy : Preview

March 3 - 6, 2007
The Inn at Spanish Bay
Pebble Beach, CA 93953

Preview
The optimal boundaries of the firm-and of entire industries-have changed. The economy is converging around a few distinct mega-industry clusters, creating more competition within them. Information technology has contributed to this consolidation, enabling the management of larger organizations and the seamless flow of information among value chain participants. At the same time, it has empowered customers to self-organize, and to interact with companies in new ways.  

Where and how companies create value is different in the networked economy than it was during the industrial era. We believe firms that make their industries and their customers more efficient will grow faster and will out-earn the rest-although what this means exactly will vary by industry. For example, in health care, an emerging winner might vertically integrate health care services, using a comprehensive patient record to guide treatment, prevention, and wellness services for individuals. Another winner could be the financial services firm that simplifies payment transactions between patients and their doctors. In telecom and media, a winner might figure out how to offer location-based marketing and promotion via cell phone. Even international militaries, combining their assets to deal with a common threat, could make the global military infrastructure work more efficiently.

While the networked economy poses new opportunities for companies to create value, it also poses risks to most organizations because executives haven't fully figured out the new rules, or effective strategies to play the new game. Business models are becoming more like markets (for products and information) and customers are self-organizing around them. Witness Google, YouTube, Amazon, or eBay-each has a business at the core, but it's the network of customers and how they contribute and interact with each other that gives the model its power. Yet few companies have figured out how to tap into the power of networked consumers. Just witness Wal-Mart's recent embarrassment when news became public that its public relations firm was behind writing false blogs that promoted the retailer.

At this DiamondExchange, we will explore the implications of the networked economy for specific industry clusters-public sector, telecom/media, health care, products, and financial services-and the relevancies across sectors, such as security, ethics, and standards adoption. To facilitate our discussions, we will bring together a broad range of senior executives and thought leaders from industry and the public sector who can share unique insights relevant to us all.

Since 80% percent of world trade flows over the oceans, ensuring the safety and security of shipping lanes is vital to the health of the global economy. Yet no single navy has the resources to protect against the increasing threats from piracy, smuggling, and terrorism-all of which have the potential to disrupt commerce. Admiral Mike Mullen, chief of naval operations for the U.S. Navy, the top ranking U.S. naval officer and member of the Joint Chiefs of Staff, is an avid proponent of the 1,000 Ship Navy concept which would create a virtual, global navy where the resources of various nations band together. The 1,000 Ship Navy would help in times of crisis, such as natural disasters, and would work together to prevent illicit activities, preserving the efficiency and reliability of the global shipping network. In his keynote address at the DiamondExchange, Admiral Mullen will discuss his vision for the 1,000 Ship Navy and the new era of international trust and cooperation it signifies.

Competing in the Networked Economy means addressing our customers differently-for they are buying, evaluating, and using products and services differently. To match their agility, companies need to develop new ways to interface with them "at the edge" using new media and technology. John Sviokla, vice chairman of Diamond, will share his view of how the networked economy affects different industries, and the implications for how companies can get more involved with their customers.

There are opportunities even for companies that are not, at their core, technology-driven companies. These firms can still use technology to transform how they work internally, and the value they provide to customers-and even some of the services they provide to their customers. Dave Weick, chief information officer of McDonald's Corporation, has helped McDonald's take advantage of some of the new forms of collaboration and information sharing within his organization. For example, the company uses blogs to communicate internally and solicit feedback on major initiatives and it has implemented a corporate Yahoo! portal to facilitate worldwide communication. McDonald's has even started providing broadband internet access to patrons in certain restaurant locations. Such technologies have fundamentally changed how the organization works together, and how it interacts with customers.

Technology tends to advance faster than most organizations can absorb it, and faster than most individuals can use it to change how they work. So, we will host a cross-industry panel which will include Cathy Brune, senior vice president and chief information officer at Allstate Corporation, Toby Redshaw, corporate vice president, IT Strategy, Architecture and eBusiness at Motorola, and Alene Korby, chief information officer of Kraft Foods, who will discuss what competing in the networked economy means for them as they lead technology organizations that must support changing customer, operational, and organizational needs.

Technology has changed the economics of what is possible and how organizations can work together. Nowhere is this more true than the health care industry, which sits on the verge of major restructuring brought about by consumerism, technology, and consolidation. From the health care sector, we will hear from Dave Watson, senior vice president and chief technology officer at Kaiser Permanente on what his organization has achieved by implementing its "closed loop" process to cut out inefficiency, cost, and lag time to provide high quality health care to patients.

The networked economy is built on standards which facilitate communications, interoperability, and efficiency. We will explore issues related to standards development and the importance of not-for-profit entities in establishing them. Arthur Holden, chairman and founder of Pharmaceutical Biomedical Research Consortium, Ltd. and senior vice president of Illumina, Inc., Judy Sprieser, former CEO of Transora, and Rick Prelinger, founder of the Prelinger Archives for film, and board president of the Internet Archive, will share their views of how standards are best established and by whom.

The internet has created new boundaries and expectations for privacy and behavior, creating new temptations and ethics challenges for individuals and companies alike. The recent scandal at Hewlett-Packard highlights the importance for executives of understanding where they draw their ethical boundaries. Chunka Mui, co-author of Unleashing The Killer App, will lead a panel discussion on the new business ethics, drawing together people from a range of disciplines who think deeply about morality and society on a daily basis. The panel will include Vice Admiral John G. Morgan of the U.S. Navy and John Perry Barlow, co-founder of the Electronic Frontier Foundation and a Fellow with Harvard Law School's Berkman Center for Internet and Society.

By joining us at the DiamondExchange, you'll build relationships and dialog with other people who are thinking about what competing in the networked economy means for their industry and their firm. You will come away relaxed, informed, and with renewed resolve to tackle some of these issues in your organization.