4: Coordinate the Uncoordinated
Traditionally, firms created power by vertical integration - doing as much as possible within the company. When processes remained unchanged for decades, this was effective in capturing the entire profit margin of the supply chain.
But in the present day, there is greater power in flexibility: owning a coal mine, an iron mine, and a smelting plant is profitable so long as your product is made of steel - but as soon as you change to aluminum, all of these assets become unprofitable and burdensome. To be nimble, you must be able to switch supplier quickly, without encumbering you capital.
The author switches to speak about military tactics. The way in which an army can defeat another army of equal size, or even one that is significantly larger, is through maneuvers: coordinating the troops you have better than the enemy. In business, we often see small firms topple large ones by coordination.
Revolutions and Coordination
Revolutions provide many examples of a state with a sizable standing army being touted by a smaller and more poorly equipped force of rebels. This reflects four basic ingredients of effective coordination: speed, syndication, integrity, and transparency.
Speed
Speed is highly effective: being able to do things more quickly and make adjustments on the fly, and the increase in speed, usually due to technology, is staggering.
He mentions Paul Revere's 13.5-mile ride to alert the American forces that the British Army was on its way. On horseback it took two hours; by car he could have done it in half an hour. By phone, maybe ten minutes. With Twitter, it could have been done in three seconds.
Syndication
Syndication means getting many diverse parties to combine their efforts. Consider that ancient Rome, a massive empire, was overpowered by barbarians that were largely independent tribes who banded together and coordinated their attacks.
He mentions technology, again, as a method to share a message, with social media enabling a message to reach millions within a few minutes.
Integrity
A problem with syndication is distortion - like the "telephone chain" game children play, the message is changed as it is passed from one person to another, sometimes by omission and sometimes with intent to distort it.
He mentions technology, again, as a method to send a message directly to large numbers of people, without anyone changing it along the way.
Transparency
Traditional companies relied heavily on opacity to preserve their reputations: if they treated a customer or employee horribly, there was little chance of many people hearing about it unless the story got picked up by the press.
He mentions technology, again, as the foe of opacity: companies cannot keep secrets. But on the other hand, neither can people spread malicious rumors - as the social media comes to the defense of the wrongly accused with equal or greater passion.
Case Study: inVentiv Health
The author's first case study is too vague to be meaningful: two firms were "in an emerging business model: and performed "nonstrategic activities" for clients. His client, inventive, provide "a comprehensive set of services" and accumulated a "diverse constellation of companies ... each with a unique capability."
(EN: It goes on like that for quite a while, remaining entirely vague on what the company actually did, and communicates nothing concrete.)
Case Study: FedBid
The author mentions FedBid, a firm that provided a centralized service for government suppliers. In essence, it took advantage of the federal government's purchasing processes that require agencies to solicit bids from potential suppliers, a long and time-consuming process, by creating a reverse-auction site in which agencies could post their needs and suppliers could bid to provide them. By 2010, the marketplace had grow to support $1.15 billion worth of products sold to the federal government.
Case Study: Rave Mobile Safety
Rave Mobile began as a message broadcasting service. For example, it would help universities to broadcast messages to students' cell phones - such as if classes were cancelled due to weather, the message would reach students in minutes.
The problem is that such a service is very short-lived. Any university with a Facebook or Twitter page was soon able to send such updates without engaging a third-party service to send them.
So the firm found another problem to solve: the inability of cell phone users to be physically located in the case of emergencies. The company provided a free application to users that would upload their location details, and as a paid service emergency call centers could subscribe to it to pinpoint the location of people who called them using cell phones.
The service since expanded to enable users to populate a database of information that may be useful in an emergency: details about health conditions, medical allergies, contact information for others to be alerted, and the like.
While the author does not indicate the firm's commercial success, he hints that it is positioning itself to become "the definitive database for 911 services."
Case Study: Blink
The case of Blink airlines is mentioned, which began as an MBA project to do a cost-analysis to determine whether purchasing a fleet of corporate jets would be more cost-effective than flying its middle managers on commercial airlines.
They discovered that not only would it save the firm 25% on its travel costs (provided they could travel in groups of four or more). It was more time-efficient for business travellers, who could avoid having to check in two hours in advance, collect checked baggage, and often stay overnight when commercial flight schedules were unaccommodating.
They then found a market among firms that were too small to purchase their own fleet, and even to purchase time-shared aircraft, and they are pioneering an "air taxi" service in England and France.
(EN: While the author seems impressed by the idea, it remains a small firm, and even after nearly a decade has a "fleet" of only six jets. It remains a partnership, so financials are not available to determine whether the firm has been successful, or is even solvent.)
Conclusion
(EN: The conclusion offers no new information or insight.)