Business Impact

Needs We Didn't Know We Had

Sense & Respond: Capturing Value in the Network Era

If customers didn’t have to carry all their purchases in hand-held baskets, grocer Sylvan Goldman realized in 1936, they might buy more. He invented the shopping cart-and became the father of the modern supermarket.

Meeting needs that consumers don’t yet know they have is still the key to success in the free market, agree the contributors to Sense & Respond. But in today’s competitive, seemingly saturated markets, would-be Goldmans need much more information to be able to innovate successfully, according to this group of academics and business managers. And help, they assert, has arrived just in time-in the form of cheap, powerful information-sharing networks such as the World Wide Web.

In the book’s vision, the breadth and connectivity of the Web and related information technologies will enable lumbering old “make-and-sell” businesses, weighed down by lengthy product-development cycles and ritualized mass production, to take wing as flexible “sense-and-respond” organizations that electronically monitor consumer preferences and, with the help of their own internal networks, swiftly redesign their products and services to match. The Web can also act as the 21st century’s shopping cart, vastly increasing consumer choice and convenience.

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Several chapters, however, take a hard look at the uncertainties faced by organizations hoping to profit from this transformation. Contrary to media hype, for example, the book warns that the United States isn’t a nation of technophiles; the products that dominate the new “multimedia” industry will be those that offer the clearest economic advantages to consumers-and require the least actual change in their behavior.

Oh, and it helps if they set the industry standard. Microsoft, not surprisingly, makes frequent appearances in the book, both as a sterling example of the modern sense-and-respond organization and as one of the likeliest winners in the multimedia race. The company scrapped its rigid, top-down, highly tardy software development procedures in 1990, we learn, and started treating product specifications as fluid and incorporating many rounds of customer feedback. That meant all wasn’t lost in late 1995, when the company recognized the commercial significance of the Internet and swiftly brought out its own browser, Internet Explorer, to rival Netscape’s Navigator.

Of course, the old make-and-sell companies aren’t headed for the guillotine quite yet; my copy of Internet Explorer 4.0 is so bug-ridden that it regularly hangs my computer. But no responsible manager can deny that networked multimedia technologies are already transforming customer relations, even if it isn’t yet clear where profits are to be had. Sense & Respond brings some sense to this revolution.

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