Cost management brings clear benefits to organizations—including the benefit of decision-making clarity. But the journey to the boardroom does not end here. The many companies that have progressed beyond this level have learned they cannot concentrate only on the defensive and cost management levels of the value hierarchy. If they do, they will likely miss opportunities to capture maximum value from their IP. To seize such opportunities, companies need to progress to the next level: Level Three: Capture Value.
1. Boeing’s experience with outsourcing as a speed advantage in the “Dreamliner” case points out the flip side of the comparative advantage paradigm. Nevertheless, the front-end decision was sound and it became a matter of execution, a matter difficult to manage or control from the outside of the supplying company. This is another important lesson in the make-versus-buy discussion.