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Convergence II 
Great; you say; but why is it only in the past few years that we started to see in 
the United States the big surges in productivity that should be associated with such
a technological leap? Answer: Because it always takes time for all the flanking 
technologies; and the business processes and habits needed to get the most out of 
them; to converge and create that next productivity breakthrough。
Introducing new technology alone is never enough。 The big spurts in productivity come 
when a new technology is combined with new ways of doing business。 Wal…Mart got big
productivity boosts when it combined big box stores…where people could buy soap
supplies for six months…with new; horizontal supply…chain management systems that
allowed Wal…Mart instantly to connect what a consumer took off the shelf from a 
Wal…Mart in Kansas City with what a Wal…Mart supplier in coastal China would produce。 
When computers were first introduced into offices; everyone expected a big boost in 
productivity。 But that did not happen right away; and it sparked both disappointment 
and a little confusion。 The noted economist Robert Solow quipped that computers are 
everywhere… except 〃in the productivity statistics。〃
In a pathbreaking 1989 essay; 〃Computer and Dynamo: The Modern Productivity Paradox 
in a Not…Too Distant Mirror;〃 the economic historian Paul A。 David explained such 
a lag by pointing to a historical precedent。 He noted that while the lightbulb was
invented in 1879; it took several decades for electrification to kick in and have 
a big economic and productivity impact。 Why? Because it was not enough just to install
electric motors and scrap the old technology…steam engines。 The whole way of doing



manufacturing had to be reconfigured。 In the 
178 
case of electricity; David pointed out; the key breakthrough was in how buildings; 
and assembly lines; were redesigned and managed。 Factories in the steam age tended 
to be heavy; costly multistory buildings designed to brace the weighty belts and other 
big transmission devices needed to drive steam…powered systems。 Once small; powerful 
electric motors were introduced; everyone hoped for a quick productivity boost。 It 
took time; though。 To get all the savings; you needed to redesign enough buildings。 
You needed to have long; low; cheaper…to…build single…story factories; with small 
electric motors powering machines of all sizes。 Only when there was a critical mass 
of experienced factory architects and electrical engineers and managers; who 
understood the complementarities among the electric motor; the redesign of the 
factory; and the redesign of the production line; did electrification really deliver 
the productivity breakthrough in manufacturing; David wrote。 
The same thing is happening today with the flattening of the world。 Many of the ten 
flatteners have been around for years。 But for the full flattening effects to be felt; 
we needed not only the ten flatteners to converge but also something else。 We needed 
the emergence of a large cadre of managers; innovators; business consultants; 
business schools; designers; IT specialists; CEOs; and workers to get comfortable 
with; and develop; the sorts of horizontal collaboration and value…creation processes 
and habits that could take advantage of this new; flatter playing field。 In short; 
the convergence of the ten flatteners begat the convergence of a set of business 
practices and skills that would get the most out of the flat world。 And then the two 
began to mutually reinforce each other。 
〃When people asked; 'Why didn't the IT revolution lead to more productivity right 
away?' it was because you needed more than just new computers;〃 saidRomer。 〃You needed 
new business processes and new types of skills to go with them。 The new way of doing 
things makes the information technologies more valuable; and the new and better 
information technologies make the new ways of doing things more possible。〃 
Globalization 2。0 was really the era of mainframe computing; which was very 
vertical…command…and…control oriented; with companies and their individual 
departments tending to be organized in vertical silos。 Globalization 3。0; which is 
built around the convergence of the ten flat179 
teners; and particularly the combination of the PC; the microprocessor; the Internet; 
and fiber optics; flipped the playing field from largely top…down to more side to 
side。 And this naturally fostered and demanded new business practices; which were 
less about command and control and more about connecting and collaborating 
horizontally。 
〃We have gone from a vertical chain of command for value creation to a much more 
horizontal chain ofcommand for value creation;〃 explained Carly Fiorina。 Innovations 
in companies like HP; she said; now come more and more often from horizontal 
collaboration among different departments and teams spread all across the globe。 For 
instance; HP; Cisco; and Nokia recently collaborated on the development of a camera/ 


cell phone that beams its digitized pictures to an HP printer; which quickly prints 
them out。 Each company had developed a very sophisticated technological specialty; 
but it could add value only when its specialty was horizontally combined with the 
specialties of the other two companies。 
〃How you collaborate horizontally and manage horizontally requires a totally 
different set of skills〃 from traditional top…down approaches; Fiorina added。 
Let me offer just a few examples。 In the past five years; HP has gone from a company 
that had eighty…seven different supply chains…each managed vertically and 
independently; with its own hierarchy of managers and back…office support…to a 
company with just five supply chains that manage 50 billion in business; and where 
functions like accounting; billing; and human resources are handled through a 
companywide system。 
Southwest Airlines took advantage of the convergence of the ten flat…teners to create 
a system where its customers can download their boarding passes at home。 But until 
I personally altered my ticket…buying habits and reengineered myself to collaborate 
horizontally with Southwest; this technological breakthrough didn't produce a 
productivity breakthrough for me or Southwest。 What the bizhub commercial is about 
is the difference between the employee who understands the convergent technologies 
in the new bizhub machine (and how to get the most out of them) and the employee in 
the very same office who does not。 Not until the latter 

changes his work habits will productivity in that fictional office go up; even though 
the office has this amazing new machine。 
Finally; consider the example of WPP…the second…largest 
advertising…marketing…communications consortium in the world。 WPP; which is based 
in England; did not exist as we now know it twenty years ago。 It is a product of the 
consolidation of some of the biggest names in the business…from Young & Rubicam to 
Ogilvy & Mather to Hill & Knowlton。 The alliance was put together to capture more 
and more of big clients' marketing needs; such as advertising; direct mail; media 
buying; and branding。 
〃For years the big challenge for WPP was how to get its own companies to collaborate;〃 
said Allen Adamson; managing director of WPP's branding firm; Landor Associates。 〃Now; 
though; it is often no longer enough just to get the companies in WPP to work together 
per se。 Increasingly; we find ourselves pulling together individuals from within each 
of these companies to form a customized collaborative team just for one client。 The 
solution that will create value for that client did not exist in any one company or 
even in the traditional integration of the companies。 It had to be much more 
specifically tailored。 So we had to go down inside the whole group and pluck the 
individual who is the right ad person; to work with the right branding person; to 
work with the right media person for this particular client。〃 
When GE decided in 2003 to spin off its insurance businesses into a separate company; 
WPP assembled a customized team to handle everything from the naming of the new 

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