Lecture Play time: 55min

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ABOUT THE LECTURE:
Let’s assume, says Rebecca Henderson, that the eagerly awaited convergence in technology has begun, enabling our PCs, phones, cars and appliances to communicate with each other transparently. “Who,” asks Henderson, “will make money in this world?” If you are in the business of making “boxes” -- say, to play downloaded music, or to compute data—you are facing a dilemma, Henderson believes. Customers are no longer seeking the best designed product, but “a total system experience.” Whether the business involves bicycles or cell phones, medical or financial services, the “future in an interconnected world is about selling parts of interconnected systems,” Henderson says. So firms must “think about controlling architecture or influencing the architecture of the system and building the best products within it.”

The challenge will be to seize on the right strategy for competing in a world where a common telecommunications backbone connects devices and people everywhere. If your systems don’t dovetail with the architecture of this telecom backbone, you might face “sudden death” when the market for your product tips toward a different standard. Henderson suggests that organizations are more likely to survive if they embrace public open standards such as Linux, and abandon proprietary software. She advocates “soft standards,” where companies design systems compatible with current and future public standards but at the same time offer customers performance and functionality tailored to their needs.

ABOUT THE SPEAKER:
Rebecca Henderson specializes in technology strategy. Her current research focuses upon the pharmaceutical and biotechnology industries. She received an undergraduate degree in Mechanical Engineering from MIT in 1981 and a doctorate in Business Economics from Harvard University in 1988. She spent 1981-1983 working for the London office of McKinsey and Company.

Her publications include “Underinvestment and Incompetence as Responses to Radical Innovation: Evidence from the Photolithographic Industry” in theRand Journal of Economics, and “Architectural Innovation: The Reconfiguration of Existing Product Technologies and The Failure of Established Firms” with Kim Clark, in Administrative Science Quarterly.

Henderson sits on the Board of the Whitehead Institute for Biomedical Research and on the Board of the Linbeck Corporation. She was recently retained by the Department of Justice as an Expert Witness in connection with the Remedies phase of the Microsoft case, and in 2001 was voted “Teacher of the Year” at the Sloan School.