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Fusion Strategy: How Real-Time Data and AI Will Power the Industrial Future

4.7 4.7 out of 5 stars 54 ratings

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Two world-renowned experts on innovation and digital strategy explore how real-time data and AI will radically transform physical products—and the companies that make them.

Tech giants like Facebook, Amazon, and Google can collect real-time data from billions of users. For companies that design and manufacture physical products, that type of fluid, data-rich information used to be a pipe dream. Now, with the rise of cheap and powerful sensors, supercomputing, and artificial intelligence, things are changing—fast.

In Fusion Strategy, world-renowned innovation guru Vijay Govindarajan and digital strategy expert Venkat Venkatraman offer a first-of-its-kind playbook that will help industrial companies combine what they do best—create physical products—with what digitals do best—use algorithms and AI to parse expansive, interconnected datasets—to make strategic connections that would otherwise be impossible.

The laws of competitive advantage are changing, rewarding those who have the most robust, data-driven insights rather than the most valuable assets. To compete in the new digital age, companies need to use real-time data to turbocharge their products, strategies, and customer relationships. Those that don't risk falling on the wrong side of the next great digital divide.

Fusion Strategy is the way forward.


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From the Publisher

Fusion Strategy: How Real-Time Data and AI Will Power the Industrial Future

AI will radically transform physical products—and the companies that make them.
Indra Nooyi endorsement
Linda Yates endorsement
Vimal Kapur endorsement
Fusion Strategy is the way forward

Editorial Reviews

Review

Advance Praise for Fusion Strategy:

"Fusion Strategy will be the definitive way for industrial companies to win against new competitors." — Indra K. Nooyi, former Chairman and CEO, PepsiCo; Member of the Board, Amazon

"I would strongly recommend that executives in industrial businesses read this book and learn how to integrate hardware and software to create customer value." — Vimal Kapur, CEO, Honeywell

"Fusion Strategy is a masterpiece. . . ." — Linda Yates, founder and CEO, Mach49

"Fusion Strategy will become part of the vocabulary of how we think about winning." — Marc N. Casper, Chairman, President, and CEO, Thermo Fisher Scientific

"Fusion Strategy is going to be central to unlocking value creation and securing the future success of every company." — Shailesh Jejurikar, Chief Operating Officer, Procter & Gamble

"A compelling vision for the next wave of digitization . . . . This is a great book." — Jeff Immelt, former Chairman and CEO, General Electric; Venture Partner, New Enterprise Associates

"Reading Fusion Strategy has been a truly mind-expanding experience for me." — Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited, India

"Govindarajan and Venkatraman have pointed corporations toward a North Star during some of the most challenging times." — Kinya Seto, President and CEO, LIXIL, Japan

"Fusion Strategy is essential reading for all our managers." — Anish Shah, Managing Director and CEO, Mahindra Group, India

"Fusion Strategy is an important book for our leaders as it makes the case that real-time insights have now surpassed assets as the most valuable competitive advantage that every company must seek." — N. Chandrasekaran, Chairman, Tata Sons; former CEO, Tata Consultancy Services, India

"Fusion Strategy moves beyond the buzzword hype around data and AI and brings much-needed clarity and strategic direction to the backbone of our economy—the industrial sector." — Marc Bitzer, CEO, Whirlpool Corporation

About the Author

Vijay Govindarajan (VG) is widely regarded as one of the world's leading experts on strategy and innovation. He is the Coxe Distinguished Professor at Tuck School of Business at Dartmouth College and a former Marvin Bower Fellow at Harvard Business School. He is the author of the bestselling books Reverse Innovation and The Three-Box Solution.

Venkat Venkatraman is the David J. McGrath Jr. Professor in Information Systems at the Questrom School of Business, Boston University. He is considered one of the foremost authorities on how companies develop strategies to win with digital technologies.

Product details

  • Publisher ‏ : ‎ Harvard Business Review Press (March 12, 2024)
  • Language ‏ : ‎ English
  • Hardcover ‏ : ‎ 224 pages
  • ISBN-10 ‏ : ‎ 164782625X
  • ISBN-13 ‏ : ‎ 978-1647826253
  • Item Weight ‏ : ‎ 1 pounds
  • Dimensions ‏ : ‎ 6.06 x 1.02 x 9.37 inches
  • Customer Reviews:
    4.7 4.7 out of 5 stars 54 ratings

About the author

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Vijay Govindarajan
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Vijay Govindarajan, known as VG, is widely regarded as one of the world’s leading experts on strategy and innovation. VG, NYT and WSJ Best Selling author, is the Coxe Distinguished Professor at Dartmouth College’s Tuck School of Business and the Marvin Bower Fellow at Harvard Business School. The Coxe Distinguished Professorship is a new Dartmouth-wide faculty chair. He was the first Professor in Residence and Chief Innovation Consultant at General Electric. He worked with GE’s CEO Jeff Immelt to write “How GE is Disrupting Itself”, the Harvard Business Review (HBR) article that pioneered the concept of reverse innovation – any innovation that is adopted first in the developing world. HBR picked reverse innovation as one of the Great Moments in Management in the Last Century. In the latest Thinkers 50 Rankings, Govindarajan was ranked the #1 Indian Management Thinker.

VG writes about innovation and execution on several platforms including Harvard Business Review and Bloomberg BusinessWeek. He is a co-leader of a global initiative to design a $300 House.

Govindarajan has been repeatedly identified as a Top 5 management thinker by influential publications including: Outstanding Faculty, named by Business Week in its Guide to Best B-Schools; Top Ten Business School Professor in Corporate Executive Education, named by Business Week; Top Five Most Respected Executive Coach on Strategy, rated by Forbes; Top 50 Management Thinker, named by The London Times; Rising Super Star, cited by The Economist; Outstanding Teacher of the Year, voted by MBA students.

Prior to joining the faculty at Tuck, VG was on the faculties of Harvard Business School, INSEAD (Fontainebleau) and the Indian Institute of Management (Ahmedabad, India).

VG’s research has garnered numerous accolades. He was inducted into the Academy of Management Journals’ Hall of Fame, and ranked by Management International Review as one of the Top 20 North American Superstars for research in strategy. One of his papers was recognized as one of the ten most-often cited articles in the entire history of Academy of Management Journal.

VG is a rare faculty who has published more than ten articles in the top academic journals (Academy of Management Journal, Academy of Management Review, Strategic Management Journal) and more than ten articles in prestigious practitioner journals including several best-selling HBR articles. He received the McKinsey Award for the best article in HBR. He published the New York Times and Wall Street Journal Best Seller, Reverse Innovation.

VG has worked with CEOs and top management teams in more than 25% of the Fortune 500 firms to deepen and integrate their thinking about strategy. His clients include: Boeing, Coca- Cola, Colgate, Deere, FedEx, GE, Hewlett-Packard, IBM, J.P. Morgan Chase, J&J, New York Times, P&G, Sony, and Wal-Mart. Much in demand on the lecture circuit, he has been a keynote speaker in the BusinessWeek CEO Forum, HSM World Business Forum, TED and World Economic Forum at Davos.

VG received his doctorate from the Harvard Business School and was awarded the Robert Bowne Prize for the best thesis proposal. He also received his MBA with distinction from the Harvard Business School where he was included in the Dean’s Honor List. Prior to this, VG received his Chartered Accountancy degree in India where he was awarded the President’s Gold Medal for obtaining the first rank nationwide.

Customer reviews

4.7 out of 5 stars
54 global ratings

Top reviews from the United States

Reviewed in the United States on July 4, 2024
Fusion Strategy, is excellent research backed work by Professors Vijay Govindarajan and Venkat Venkatraman. In an era where data is the new oil, this book skillfully refines it with purposeful intent, offering profound insights to craft immersive, personalized, and adaptive customer experiences in the unpredictable world of VUCA, heralding the dawn of the Fusion Age.

Exemplifying a blend of high-quality content, profound depth, and broad scope, "Fusion Strategy" emerges as the new beacon in strategic thinking. It stands on the shoulders of giants of VG’s earlier books - 3 Box Strategy and Reverse Innovation, two of best among many others, and my personal favorites, this new work illuminates a path for modern industrial navigators. Through their meticulously researched and compellingly presented work, Govindarajan and Venkatraman provide a guiding light—a lighthouse for the new industrial age—offering both a beacon and a compass to steer through uncharted territories.

A highlight of the book is the chapter on "Fusion Strands." This innovative framework weaves together five strands—interlocking, intertwining, infusion, interlinking, and interconnections—to harmonize the symphony of Industrial and Digital realms. Without giving away the culmination, I assure you that the knowledge gained feels akin to mastering a powerful wizarding spell, transforming how you perceive and implement company strategy.

As you turn the final page of "Fusion Strategy," your perspective on strategy will be irrevocably altered. It's a book to revisit, a continuous source of inspiration and guidance, much as I intend to do. My gratitude to Govindarajan and Venkatraman for this enlightening contribution.
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Reviewed in the United States on March 12, 2024
Fusion Strategy lays out an ambitious strategic roadmap for leaders in asset-heavy industries to follow in positioning their businesses for long-term success in the connected intelligence future.

For the past decade I’ve been writing about the Connected Intelligence revolution. I define it as the collision of advanced data processing technologies with massive amounts of available data, resulting in new ways that we see the world, anticipate the future, make decisions, and take action. This revolution has fundamentally transformed many industries, and with the emergence of Generative AI, those disruptions have only accelerated.

So far, the most significant impacts have been felt in what the authors of Fusion Strategy call asset-light industries like entertainment and advertising. This book is for the asset-heavy industries that undoubtedly see disruption heading their way.

There’s so much that I like about this book. It is very well organized, introducing four “vectors of value” early that become the overall organizing framework for the rest of the book, and using a consistent structure to the four corresponding chapters that make up the core of the work. The authors provide specific considerations, decisions, and actions for readers to pursue in their businesses, and they use examples of what real companies are doing in representative asset-heavy industries.

While I agree with the direction provided by the authors, I question how many incumbent leaders in asset-heavy industries will actually be able to follow their guidance. I doubt that the cultures, investors, or unions of these companies will allow most of them to fundamentally transform themselves as outlined in the book. Thankfully companies like John Deere (currently) and IBM (in the past) have demonstrated that it’s not impossible.

Fusion Strategy is a relatively short book (about 180 pages), made up of 9 chapters broken into three parts.

The first part, titled “When Steel Meets Silicon”, provides the conceptual foundation for the approach the authors lay out in the remainder of the book. Some of the concepts they introduce may be familiar to readers and some will be new, but this section brings it all together into the foundation on which they build.

Part two, titled “Vectors of Value”, has one chapter on each of these four potential strategies. This is the core of the book. Each chapter follows the same format:

- An introductory section using a real world example to describe the potential impact of the strategy.

- A section on the “Paradigm Shifts” companies need to achieve in pursuing each strategy.

- A section titled “The Journey Ahead” which walks through four sequential steps companies must pursue in the given strategy.

- A “Checklist” for each strategy — outlining the key questions companies will need to answer in pursuing the strategy.

The final section of the book is titled “Conquering the Fusion Frontier” and only has one chapter which summarizes the entire book into five principles with two recommended best practices for each.

While I’m skeptical that many industrial leaders will follow the path outlined by Govindarajan and Venkatraman, I believe they should. I strongly recommend this book to any leader in an asset-heavy industry.
Reviewed in the United States on March 12, 2024
The last two decades have been about digitizing information goods focused on asset-light sectors fueled by the rapid acceptance of smartphones, monetization through advertisements, and a blatant disregard for individual privacy and identity. The digitization of the industrial world is just beginning with the business infrastructure defined from the chip to the cloud. This transformation may happen over a longer period—perhaps two decades or more. But companies must think now and plan today. #nvidia's rise over the last year is a testament to the rearchitecting of the business infrastructure with #AI at the core. #genai has received much attention in the consumer sector. We expect #genai to become more central in the industrial world, with digital twins acting as an integrated view of the enterprise, including suppliers, partners, and customers. We hope you will read the book and reflect on the ideas. We understand fully that we have barely scratched the surface. Our examples may be limited to what we have studied, but we hope the central ideas extend to a much larger landscape than what we have covered in the book. Every industry is, by definition, in the B2B2C space, even if the company's immediate focus may be B2C. The launch of the book is not the end but the beginning. Please write your reviews and email us if the ideas align with your thinking (or even contradict). We want to learn. We want to know where our ideas resonate and where we may have missed the mark. The best way forward is through a spirited interchange of ideas to unlock business value in many sectors propelled by real-time data and AI

Top reviews from other countries

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JB
5.0 out of 5 stars Interesting read
Reviewed in the United Kingdom on June 5, 2024
Fascinating read thank you.
lucia arias schreiber
4.0 out of 5 stars Negocios e IA
Reviewed in Spain on May 23, 2024
Interesante perspectiva del futuro de los negocios en base a los últimos desarrollos de la IA, en especia la generativa.
B.Sudhakar Shenoy
5.0 out of 5 stars Exceptionally good
Reviewed in India on April 29, 2024
Historians tend to compare Digitization to the invention of the printing press, and the Internet to the birth of the railways. The combination of Moore’s law and Metcalfe’s law has transformed the world beyond our imagination in the last two decades, with changes far more profound and disruptive to many an industry and also the way we live, transact, commute and communicate.

However, there were some brilliant minds who could foresee many of the current trends as early as the late 1990’s. Peter Drucker the Guru of modern management, in ‘Management Challenges for the 21st Century-1999’ gave us broad hints on the emergence of the knowledge economy. Stan Davis gave an excellent framework in ‘Blur: The speed of change in the connected economy-1999’, of a six-lane exchange highway, and said that in a digital economy our conventional understanding of a ‘Product’ and ‘Service will be blurred. ‘A Service is a Product in action and a Product is Service waiting to happen’. This book, Fusion strategy, in my opinion is a brilliant testimony of this phenomenon. What makes it a true classic is the rare combination of expertise from business strategy (VG) and cutting-edge digital technologies (Venkat).

In my own experience, in large MNC’s, that are focussed on manufacturing, IT and business, live in tightly insulated mutually exclusive silos. IT is typically a function that is least understood and appreciated, and called in to ‘support’ by providing transactional software and IT infrastructure like networks and computers. I sincerely hope that this book is the wake-up call to all manufacturing companies to harness the power of digital technologies, embed intelligence, connect their products and services and with real time data rich insights, provide differentiated customer experiences. This unlocking of fresh value would be the true competitive advantage for large asset heavy firms. To some extent this is an extension of frameworks adopted by asset light firms that have transformed analogue (example music) into digital.

Datagraphs are the foundation of fusion strategy. They ‘capture relationships, links and interrelationships between a company and its customers through product-in-use data and are the fundamental building blocks of the fusion strategy’. Datagraphs help in four analyses- descriptive, diagnostic, predictive and prescriptive, that build on data network effects and offer deep and powerful insights. Such data rich insights create new products, customer experiences and services. AI is at the core of this concept, harnessing on the abundance of real time data, superfast networks, and algorithms. In this paradigm, the concept of competitive strategy migrates from a ‘firm-centric’ view (classical Micheal Porter’s 5 forces) to a network of ecosystems across industry boundaries. The book, Your Strategy Needs a Strategy (2015) from BCG Consultants Sinha, Haanaes and Reeves, is a good read on this.

I loved the framework ‘Four Strategies in the Differentiated Battlegrounds’ introduced in chapter 4 of this book. It has Reach of datagraphs on X-axis and Richness of data on Y-axis, thereby explaining 1. Fusion Products, 2. Fusion Services 3. Fusion Systems and 4. Fusion Solutions. This enables firms to analyze their current position and plan their next move to win the battle for customers in the digital era. This digital fusion framework provides the industry blueprint and road map for differentiation with accelerated ‘Clock Speeds’ (Clockspeed: Winning Industry Control in the Age Of Temporary Advantage by Charles Fine, 1999). It is the unique fusion of Computing, Connectivity and Cloud in sync with Scale, Scope and Speed.

With excellent case studies from leading companies like Tesla, GM, Deere and Honeywell to name a few, the concepts are explained with real life examples. This, is just the beginning. What we have seen till date is just the first phase of digital transformation that accounts for asset light, largely analogue systems, a mere 25 percent of the global GDP. The Fusion frontier that is waiting to be harnessed forms the rest 75 percent, amounting to a whopping $ 75 trillion in value.

I was fortunate to participate (thanks to Prof VG’s generous gesture) in a webcast from TUCK school, prior to this book launch in February 2024. Frankly, this session needs to be converted into an executive education program, to benefit global executives, both from business and IT, to implement the concepts in this book. $75 trillion is hard to ignore by any standards!

Outstanding book.
12 people found this helpful
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Steef Klein
5.0 out of 5 stars “Fusion Strategy” will be the strategic digital compass for every industrial company.
Reviewed in the Netherlands on March 12, 2024
VG's and Venkat's "Fusion strategy" will be the strategic digital compass for many manufacturing companies who want to survive in executing their digital challenges. The authors provide a superior insight that is based upon the changing industrial industry in the coming decade, where data graphs connected to physical products will deliver huge additional non-tangible company value.

By seamlessly integrating physical products with data graphs, companies can unlock a wealth of untapped intangible value, enabling them to enhance operational efficiency, optimize production processes, and strengthen customer relationships.

The fusion of a company's physical - and digital domains, including AI/ML-driven products, smart systems, services, and solutions will create network effects, between intelligent equipment, partners, suppliers, customers, and even customers of customers.

To understand the mechanisms of this new revolution, this book is a must-read for every company's CEO and its executive team. It provides the necessary information for your company to survive this digital challenge.

Steef Klein - Digital Business/IT Strategist - BITSA BV.
Customer image
Steef Klein
5.0 out of 5 stars “Fusion Strategy” will be the strategic digital compass for every industrial company.
Reviewed in the Netherlands on March 12, 2024
VG's and Venkat's "Fusion strategy" will be the strategic digital compass for many manufacturing companies who want to survive in executing their digital challenges. The authors provide a superior insight that is based upon the changing industrial industry in the coming decade, where data graphs connected to physical products will deliver huge additional non-tangible company value.

By seamlessly integrating physical products with data graphs, companies can unlock a wealth of untapped intangible value, enabling them to enhance operational efficiency, optimize production processes, and strengthen customer relationships.

The fusion of a company's physical - and digital domains, including AI/ML-driven products, smart systems, services, and solutions will create network effects, between intelligent equipment, partners, suppliers, customers, and even customers of customers.

To understand the mechanisms of this new revolution, this book is a must-read for every company's CEO and its executive team. It provides the necessary information for your company to survive this digital challenge.

Steef Klein - Digital Business/IT Strategist - BITSA BV.
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