Effectiveness Of The Composite Model For Value Creation

The composite model is an interactive system for value creation comprised of four domains of practice: Strategy, Process, Organization, Tools/Technologies (SPOT). Each component set of practices in the model is interdependent with others in the development system. The model achieves system-level capabilities by hybridizing the advantages of antithetical types of enterprise, the mechanistic-bureaucratic and organic forms of enterprise design. Mechanistic development systems keep costs low by standardized controls. The organic system fosters collaborative freedom among diverse specialists to generate innovation. Melding benefits from each of these types of enterprise design enables composite systems to achieve multiple competitive advantages simultaneously, such as cost-effective innovation. The composite model generates emergent properties. The composite effect of SPOT domains of practice exceeds the sum of each separate component. Synergistic benefits emerge if multiple domains of practice are deployed as mutually reinforcing combinations.The evolution of the composite model was stimulated by the exponential rise of hyper-competition. Increasingly, enterprises must compete simultaneously along four vectors of competitive advantage: time compression, cost reduction, quality improvement, and innovation. The composite model combines social and technical practices that enable development systems to deliver all four sets of performance advantages collectively. By contrast, most managerial interventions focus on a single advantage, such as lowering costs. Value development systems capable of simultaneously achieving innovation in addition to cost efficiencies are rare. Appendix Table 3A enables readers to evaluate the extent to which their enterprise focuses on simultaneously achieving all four types of competitive advantages or makes takeoffs among them. Appendix Table 3B enables readers to assess the extent to which they simultaneously implement all four domains of SPOT in synergistically reinforcing ways or emphasize some more than others.