Completed in 1928, Henry Ford’s River Rouge plant was a marvel of its age. It was almost 100% vertically integrated, even producing its own steel and by the 1930s over 100,000 employees worked there, producing nearly every component for the cars that Ford built. It was, at the time, considered to be a key advantage.
Nobody makes factories like that anymore though. It wouldn’t make any sense. In today’s economy, it would be impossible for any one firm to be competitive in more than a handful of the thousands of components that go into a modern automobile. That’s why today we have global supply chains.
All to often, we think of innovation as an problem of developing internal capabilities but in today’s world, far more value can be unlocked by widening and deepening connections. So we need to learn to use the entire ecosystem, including partners, suppliers, customers and open resources and think in terms of value networks rather than value chains. Continue reading “Innovation Isn’t About What You Control, But What You Can Access”