Page 224 - Performance Leadership

Chapter | 12

PERFORMANCE NETWORKS

Shareholder value, profit, and market share are not goals; they
are rewards.

It’s a Networked World

There is a fundamental shift in the organizational model of firms.
Organizations have evolved from corporate hierarchies to networks.
They have morphed from large corporate silos to more informal, agile
alliances of people and firms. The examples are manifold.
Fifteen years ago a typical German car manufacturer built most of
its cars itself in Germany. Every model would have its own design, a
separate engineering team, and its own production plants. Today the
manufacturer builds multiple models on one platform. Plants and
platforms are even shared between multiple brands. Only a small part
of the car is built in-house; most often complete assemblies are deliv-
ered from suppliers from all over the world. On average, manufac-
turers offer more than three times the number of models they did
15 years ago.
As another example, the vast majority of branded sports products
never see the brand’s office from the inside. The brand is responsible
for the design and the marketing and for managing the complete value
chain between production and sales in independent stores. But most,
if not all, products are manufactured by contract manufacturers and
distributed directly to contracted warehouses and retailers. The same
is the case with many consumer electronics brands.

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