Competitive Advantage from Better Interactions

Tacit interactions are becoming central to economic activity. Making those who undertake them more effective isn’t like tweaking a production line.

Scott C. Beardsley, Bradford C. Johnson, and James M. Manyika

We found that the performance of companies in relatively tacit-interactive sectors varied far more than that of other companies. The level of performance variability (defined as the standard deviation of performance divided by the mean level of performance) was 0.9 for companies in sectors with a low level of tacit interactions. Among companies in sectors with a middling number of tacit interactions it was 5.5, … [ Read more ]

Scott C. Beardsley, Bradford C. Johnson, and James M. Manyika

Managing for effectiveness in what economists call tacit interactions—the searching, coordinating, and monitoring activities required to exchange goods, services, and information—is about fostering change, learning, collaboration, shared values, and innovation. Workers engage in a larger number of higher-quality tacit interactions when organizational barriers (such as hierarchies and silos) don’t get in the way, when people trust each other and have the confidence to organize themselves, … [ Read more ]

The Role of Regulation in Strategy

Companies have everything to gain from forging a strong link between regulation and strategy. By shifting their approach to regulation from confrontation or passive compliance to a proactive and informed dialogue with external stakeholders, they can help construct more balanced regulatory frameworks and ensure a better outcome for the organization.

Regulation That’s Good for Competition

Market economies need regulation to facilitate fair competition and to protect consumers, the environment, and vulnerable workers from unfair practices. Too often, however, regulation has the opposite effect: hindering competition and protecting some groups at the expense of others, which is what happens when, for example, minimum-wage regulations limit the creation of jobs for low-skilled workers. A report by the McKinsey Global Institute highlights the … [ Read more ]