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This article explores how service-company attempts to win market share by offering numerous customer options can be counterproductive and can create consumer anxiety. The authors research the product offerings at major North American banks and find a large range between one bank offering four credit cards and another offering 29. They define “productization” as when service organizations add value by providing products that complement their service offerings. Unfortunately, productization is often left unchecked, resulting in product bias in a firm’s innovation strategy and the proliferation of products. Excessive complexity produced by productization hinders employees’ ability to manage service encounters, and productization as a differentiator is unlikely a defensible position. <br><br>When considering productization in a service environment, firms should remember that product satisfaction should be subordinate to good service and that a product’s capability and reputation should complement the service delivery and customer perception of the service. To better serve customers, firms should a) review the vision and direction of the organization, b) reduce complexity by understanding what type of customer is served, c) eliminate products that do not support the vision, complement the service or appeal to the identified customer, d) apply freed resources to train front-line employees and e) guard against the introduction of inappropriate new products and services.

The tendency of firms during an economic slowdown to wait for the economy to improve and then plan to act often leads to stagnation. Lack of resources has been identified as a major challenge that firms face in implementing strategy. Lean innovation, despite a negative reputation, is an effective means of harnessing resources and eliminating excessive complexity in business. Lean innovation both frees up resources so that they can be applied to innovation projects, and creates a morale boost through eliminating waste. Ideas, the author suggests, are often found from suppliers, employees, and customers, not just R&D departments. Central to the lean innovation framework is the generation, refinement, and spread of ideas. In determining how to refine our ideas, it helps to frame the situation with a question: “What problem is being solved?” The importance of an innovation culture is illustrated by the example of Kodak, which lacked such a culture and went bankrupt after the spread of digital cameras. Indeed, incumbent firms are often unprepared to deal with the appearance of a new model and fail to adapt. Conversely, Netflix embodies the spirit of an innovation culture, as it was willing to introduce video on demand even if it meant eroding growing revenues from its traditional video rental delivery service.

Managing supply chain risk can be extremely daunting due to the many moving parts in a supply chain. This article highlights this risk and suggests what firms operating in the global environment can do to manage it. It explains how organizations consider global sourcing for reasons of organization, improvement, finances, and revenues. A major under-appreciated factor in dealing with offshore suppliers is the element of risk, with one key risk factor being the cultural gap between two firms. The first levels of risks are familiar and include preconceived circumstances and are often based on past experience. The next levels, however, are typically less likely to be risk factors, but their consequences are more severe when they do become factors. Categories of risk include culture, distance, communication, urgency, and intellectual property. Leaders most often consider intellectual property, but neglect one or more of the other potential pitfalls. To illustrate supply chain risk, this article considers the example of a global French automotive parts firm with a problematic Greenfield operation in China. The operation’s supply chain crises resulted in the French firm spending far more than it had expected with a low-cost supplier. This article proposes fundamental changes to the French firm’s approach that would have led to cost savings: 1) source two suppliers at the outset; 2) spend the necessary time to understand the cultural and operational dynamics in China; and 3) embrace visibility as a simple and effective risk-assessment tactic.

It may make sense to offer 12 varieties of lattes, at least to the company that markets the offering. In most cases though, too many choices create complexity and frustrate the customer. Moreover, there are times when the offering flummoxes the company's staff. Slimming and streamlining the offering is the way to go, says this author, who suggests 3 practical steps an organization can apply to simplify things.

Increasingly, companies are outsourcing the manufacture of parts for their products. But what should they be looking for in a supply partner and what form should these partnerships take? The authors look to the auto industry for answers.