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An Interview with Lynda Applegate

(originally published by Booz & Company)

It is now a commonplace that to succeed in the New Economy, most companies will have little choice but to develop multiple alliances with other firms inside their industry's value chain. But that is no simple task. For in a global marketplace where the communications system is ubiquitous, the borders porous, and technology transfer nearly instantaneous, the lines that once separated manufacturers, vendors, distributors, retailers and even media are no longer clear. One's collaborators may simultaneously be one's competitors - a situation dubbed "coopetition" by former Novell Inc. C.E.O. Raymond J. Noorda.

Managing coopetition may well be the trickiest but most valuable skill in the Internet Economy. As Lynda M. Applegate points out, the greatest opportunities will likely accrue to those companies that establish themselves as market facilitators, brokering the information and relationships among firms in a "coopetitive" community and "leveraging the resources of the community itself." Smart companies, says Professor Applegate, the M.B.A. Class of 1952 Distinguished Professor of Business Administration at the Harvard Business School, "pay attention to their customers, their suppliers, their partners and all stakeholders in their electronic community."

Prof. Applegate is among that small group of scholars whose research on the impact of information technologies on markets, industries and organizations predates the advent of the World Wide Web. An active international consultant, she has both worked at the Ford Motor Company and advised venture-backed Internet startups. Her festive office, adorned with real and photographed flowers as well as tribal art, bears the remnants of several such recent projects, including a infant T-shirt, a coffee mug, and, from, a chocolate highheeled shoe.

Prof. Applegate concedes that coordinating coopetition may seem yet one more in a series of impossible tasks confronting business leaders in the new century. But in her 150 published case studies, two books, and more than 25 articles and book chapters, she has devoted considerable research to its pre-Internet past. Indeed, she finds the antecedents to today's alliance-management challenges in the histories of such earlier innovators as the American Hospital Supply Corporation and American Airlines. She addressed these in a conversation with Strategy & Business in her Harvard office.

Reprint No. 00113

Randall Rothenberg,
Randall Rothenberg is editor-in-chief of strategy+business.

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