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A New Way of Working Together

Question: How does collaboration between companies work in \r\ntoday's competitive landscape? 

Ranjay Gulati: \r\nCollaboration between businesses has been an old, old idea. You can go \r\nback to the East India Company, go back to the old shipping ventures \r\nthat were done where a ship will go to the east to get silk and spices \r\nand have a bunch of business people who would basically pool resources \r\nand say, "Okay, I’m investing in this shipping venture, and I’ll get a \r\npiece of the action, a percentage of the profits."

But I think \r\ncollaboration today has taken on a totally new meaning. As you see \r\ncomplexity on the demand side and supply side, you see what I call, \r\nshrinking the core, expanding the periphery. So, let’s look at the \r\nsupply side. On the supply side, you have companies saying, I can’t \r\nproduce all the inputs that go into my part anymore. So I want to shrink\r\n what I used to all core. Core was a lot of things that I produced \r\nmyself. I’m going to do much less of that myself. And you know, so they \r\nstart to do a whole variety of things. Take a look at this device, you \r\nknow, you all know this device, an iPhone. By some accounts, 90% of the \r\ninputs that go into this device are not made by Apple. A vast majority \r\nof them being made by a whole range of suppliers, who work very closely \r\nwith Apple to design, develop, configure, make sure all of these things \r\nare interconnected. Now, that's shrinking the core. 

At the \r\nsame... that has to be with the supply side of complexity all of the \r\nthings they had to get together to make it work. Apple—this is the \r\ncompany that used to produce almost everything itself. Printer cables. \r\nSo, they finally saw the light, they had to operate in a much more \r\ninterconnected world. 

Now you also have demand-side complexity. \r\nCustomers who are much more demanding, wanting different things. And so \r\nyou see what I call expanding of the periphery. Organizations saying, my\r\n customers need to receive bundles. They need to see solutions. They \r\nneed to be able to customize what they have. I’ll go back to the iPhone \r\nagain. A hundred thousand applications in the applications store. None \r\nof which are made by Apple, but allow thousands of us to customize this \r\ndevice for our special needs. And all Apple gets is 30% off the top. \r\nGreat business model. So you start to see organizations shrinking their \r\ncore, expanding their periphery, operating in a much more interconnected\r\n way. 

And they are not alone. Another example of a company that I\r\n looked at is the largest mobile operator in India, Bharti AirTel. \r\nBharti AirTel outsourced first the maintenance of a cell tower network. \r\nSo they were not managing or maintaining its cell towers anymore. They \r\noutsourced the entire IT infrastructure to IBM. Subsequently, they \r\ndecided to spin off the ownership of their cell towers. So, here’s an \r\norganization that does not own its cell towers, does not maintain its \r\ncellular network, and does not maintain its IT systems, or own them. And\r\n you say, "What do you do?" And it’s growing 35% a year, the largest in \r\nIndia which is the fastest growing market in the world. 

Now, I \r\nalso would add that this is not for the faint-hearted. You can look at \r\nthe recent example of Boeing and the delays in its 787, some which is \r\nattributed to its inability to coordinate effectively with its \r\nsuppliers. And by some accounts, depending on how you define this, half \r\nor more of alliances may fail. So, you have to figure out how to manage \r\nalliances because if you’re going to make this a centerpiece of your \r\ngrowth, you have to know how to make alliances work. And there’s some \r\nbasic fundamental principles to effective collaboration that \r\nunfortunately many organizations miss and in those cases this completely\r\n backfires on them. 

Question: What are some examples \r\nof companies that have collaborated effectively? 

Ranjay \r\nGulati: So I think collaboration is not rocket science. It’s human \r\nnature, how do you work together with another entity and make it work. \r\nAnd I think there are some basic principles that are important. The \r\nfirst of them is strategic alignment. Do we share similar goals, or \r\ncompatible goals? You don’t have to have the same goals; you’ve got to \r\nhave compatible goals. And furthermore, these are things that develop \r\nover time, you have to continually reaffirm with each other that do we \r\ncontinue to share compatible goals? We may have had compatible goals \r\nback then, do we have them today? So, how does goal alignment work and \r\nevolve over time is key. 

Then you have structure issues. When \r\nyou form these collaborations, you have two aspects of structure, \r\nthere’s an economic structure and then there’s a government structure. \r\nThe economic structure is about incentives, carrots and sticks. Who does\r\n what and what are the penalties associated with that. That gets done \r\npretty well by the lawyers and business development people who are \r\ninvolved in the alliance, the structuring of the incentives in the \r\ncollaboration. But the second part, which has to do with the government \r\nstructure, which is the decision-making, information sharing, how things\r\n will get done, doesn’t happen. And it doesn’t happen because the guys \r\nwho are going to manage the deal are not involved in creating the deal. \r\nAnd so the guys that are doing the dealmaking are not so interested, \r\ninvolved in that part of it. 

The third piece of the equation is \r\nthe process of behavioral issues. This one really kills them. And these \r\nhave to do with the dynamics of interaction between the entities. Are we\r\n culturally aligned? Are we behaviorally aligned? Are we emotionally \r\naligned? And you might say; how can two organizations be emotionally \r\naligned? You can look at organizations that have long histories of \r\ncollaboration. Fuji-Xerox, been around for 50 years. CFM, which is \r\naligned with GE and a French company, to make jet engines; been around \r\nfor decades. So you have alliances that do persist and endure over time \r\nand they do so because they have a structure that is aligned, the goals \r\nare aligned, you have governance in place and you have the behavioral \r\nsides in place. And it’s the coming together of all of these that allow \r\nyou to really be an effective collaborator. Common sense; doesn’t \r\nhappen. 
\r\n\r\n\r\n\r\n\r\n

Recorded on April 20, 2010

Collaboration between businesses isn’t rocket science. So why are so many companies missing the boat on creating alliances?

Why it’s hard to tell when high-class people are incompetent

A recent study gives new meaning to the saying "fake it 'til you make it."

Pixabay
Surprising Science
  • The study involves four experiments that measured individuals' socioeconomic status, overconfidence and actual performance.
  • Results consistently showed that high-class people tend to overestimate their abilities.
  • However, this overconfidence was misinterpreted as genuine competence in one study, suggesting overestimating your abilities can have social advantages.
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Maps show how CNN lost America to Fox News

Is this proof of a dramatic shift?

Strange Maps
  • Map details dramatic shift from CNN to Fox News over 10-year period
  • Does it show the triumph of "fake news" — or, rather, its defeat?
  • A closer look at the map's legend allows for more complex analyses

Dramatic and misleading

Image: Reddit / SICResearch

The situation today: CNN pushed back to the edges of the country.

Over the course of no more than a decade, America has radically switched favorites when it comes to cable news networks. As this sequence of maps showing TMAs (Television Market Areas) suggests, CNN is out, Fox News is in.

The maps are certainly dramatic, but also a bit misleading. They nevertheless provide some insight into the state of journalism and the public's attitudes toward the press in the US.

Let's zoom in:

  • It's 2008, on the eve of the Obama Era. CNN (blue) dominates the cable news landscape across America. Fox News (red) is an upstart (°1996) with a few regional bastions in the South.
  • By 2010, Fox News has broken out of its southern heartland, colonizing markets in the Midwest and the Northwest — and even northern Maine and southern Alaska.
  • Two years later, Fox News has lost those two outliers, but has filled up in the middle: it now boasts two large, contiguous blocks in the southeast and northwest, almost touching.
  • In 2014, Fox News seems past its prime. The northwestern block has shrunk, the southeastern one has fragmented.
  • Energised by Trump's 2016 presidential campaign, Fox News is back with a vengeance. Not only have Maine and Alaska gone from entirely blue to entirely red, so has most of the rest of the U.S. Fox News has plugged the Nebraska Gap: it's no longer possible to walk from coast to coast across CNN territory.
  • By 2018, the fortunes from a decade earlier have almost reversed. Fox News rules the roost. CNN clings on to the Pacific Coast, New Mexico, Minnesota and parts of the Northeast — plus a smattering of metropolitan areas in the South and Midwest.

"Frightening map"

Image source: Reddit / SICResearch

This sequence of maps, showing America turning from blue to red, elicited strong reactions on the Reddit forum where it was published last week. For some, the takeover by Fox News illustrates the demise of all that's good and fair about news journalism. Among the comments?

  • "The end is near."
  • "The idiocracy grows."
  • "(It's) like a spreading disease."
  • "One of the more frightening maps I've seen."
For others, the maps are less about the rise of Fox News, and more about CNN's self-inflicted downward spiral:
  • "LOL that's what happens when you're fake news!"
  • "CNN went down the toilet on quality."
  • "A Minecraft YouTuber could beat CNN's numbers."
  • "CNN has become more like a high-school production of a news show."

Not a few find fault with both channels, even if not always to the same degree:

  • "That anybody considers either of those networks good news sources is troubling."
  • "Both leave you understanding less rather than more."
  • "This is what happens when you spout bullsh-- for two years straight. People find an alternative — even if it's just different bullsh--."
  • "CNN is sh-- but it's nowhere close to the outright bullsh-- and baseless propaganda Fox News spews."

"Old people learning to Google"

Image: Google Trends

CNN vs. Fox News search terms (200!-2018)

But what do the maps actually show? Created by SICResearch, they do show a huge evolution, but not of both cable news networks' audience size (i.e. Nielsen ratings). The dramatic shift is one in Google search trends. In other words, it shows how often people type in "CNN" or "Fox News" when surfing the web. And that does not necessarily reflect the relative popularity of both networks. As some commenters suggest:

  • "I can't remember the last time that I've searched for a news channel on Google. Is it really that difficult for people to type 'cnn.com'?"
  • "More than anything else, these maps show smart phone proliferation (among older people) more than anything else."
  • "This is a map of how old people and rural areas have learned to use Google in the last decade."
  • "This is basically a map of people who don't understand how the internet works, and it's no surprise that it leans conservative."

A visual image as strong as this map sequence looks designed to elicit a vehement response — and its lack of context offers viewers little new information to challenge their preconceptions. Like the news itself, cartography pretends to be objective, but always has an agenda of its own, even if just by the selection of its topics.

The trick is not to despair of maps (or news) but to get a good sense of the parameters that are in play. And, as is often the case (with both maps and news), what's left out is at least as significant as what's actually shown.

One important point: while Fox News is the sole major purveyor of news and opinion with a conservative/right-wing slant, CNN has more competition in the center/left part of the spectrum, notably from MSNBC.

Another: the average age of cable news viewers — whether they watch CNN or Fox News — is in the mid-60s. As a result of a shift in generational habits, TV viewing is down across the board. Younger people are more comfortable with a "cafeteria" approach to their news menu, selecting alternative and online sources for their information.

It should also be noted, however, that Fox News, according to Harvard's Nieman Lab, dominates Facebook when it comes to engagement among news outlets.

CNN, Fox and MSNBC

Image: Google Trends

CNN vs. Fox (without the 'News'; may include searches for actual foxes). See MSNBC (in yellow) for comparison

For the record, here are the Nielsen ratings for average daily viewer total for the three main cable news networks, for 2018 (compared to 2017):

  • Fox News: 1,425,000 (-5%)
  • MSNBC: 994,000 (+12%)
  • CNN: 706,000 (-9%)

And according to this recent overview, the top 50 of the most popular websites in the U.S. includes cnn.com in 28th place, and foxnews.com in... 27th place.

The top 5, in descending order, consists of google.com, youtube.com, facebook.com, amazon.com and yahoo.com — the latter being the highest-placed website in the News and Media category.
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Mother bonobos, too, pressure their sons to have grandchildren

If you thought your mother was pushy in her pursuit of grandchildren, wait until you learn about bonobo mothers.

Pixabay
Surprising Science
  • Mother bonobos have been observed to help their sons find and copulate with mates.
  • The mothers accomplish this by leading sons to mates, interfering with other males trying to copulate with females, and helping sons rise in the social hierarchy of the group.
  • Why do mother bonobos do this? The "grandmother hypothesis" might hold part of the answer.
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