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Executive Interviews: Interview with David B Yoffie on Collaboration
March 2008
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By Dr. Nagendra V Chowdary
David B Yoffie Max and Doris Starr Professor of International Business Administration, Senior Associate Dean, Chair, Executive Education at Harvard Business School. 
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What are Hard Power and Soft
Power"? Between Joseph S Nye, Jrs
two powers Hard Power and Soft
Power which onedo you thinkis better
andunderwhat circumstances can
each one of themshould be applied?
Hard power are the tangible resources
(sticks and carrots) that a firmcan use
in order to influence a player in the
market. Soft power is about the ability
to influence players indirectly
through persuasion and coalitions.
Large companies should always try to
develop hard power resources; small
companies rarely have the luxury of
using hard power, and generally must
depend on soft power to offset the
threat from stronger complements.
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Why do you think all too often
many managers fail to think about
howthey can use hard power tomanage
complementors?
When managers think about managing
their friends, they generally
donot think of hard power. Friends are
not often seen as competitors. Therefore,
managers worry about cooperation
competition for value. It would
be ideal if hard power was unnecessary
in managing complements; but
what our research shows is that even
tightly connected complements will
have frictions and compete over who
gets the value. -
How can one build hard power?
What can companies learn from
Microsoft and Intel?What are the potential
dangers of investing in hard
power?
There is no danger in investing hard
power; there is only danger in abusing
hard power. Microsoft was taken to
court by theUS and European governments
over their heavy handed use of
their hard power resources. If a large
company is too aggressive in leveraging
hard power, it can produce a backlash
from competitors, customers,
and/or governments. How can one build soft power?
What can companies learn fromIBM
and Linux? What are the limitations
and potential dangers of investing in
soft power?
Soft power requires an ability to lead.
Building and creating coalitions of
other firms or individuals are soft
skills that are hard to develop. IBMs
successwith Linux came fromitswillingness
to make large investments
which benefitted many players in
their ecosystem, well beyond themselves.
However, since soft power often
involves intangible investment, if
those investments fail to bear fruit, the
firm can be left with nothing. Unlike
hard power, investments in soft power
are like investments in advertising or
R&D:When they fail, theremay be no
residual value. What is the role of business
schools in sensitizing the students to
this part of the competitive strategy?
At Harvard Business School,we teach
a large number of cases specifically on
this set of issues. Are there any lessons, in your
view, that the companies can pick up
from healthcare industry especially
the way amultiple fracture surgery is
carried out for effective collaboration
results?
I'mafraid i can't answer this question.
1.
From Competition to Collaboration Case Study
2. ICMR
Case Collection
3.
Case Study Volumes
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The Interview was conducted by Dr. Nagendra V Chowdary, Consulting Editor, Effective
Executive and Dean, IBSCDC, Hyderabad. This Interview was originally published in Effective Executive, IUP,March 2008. Copyright © March 2008, IBSCDC
No part of this publication may be copied, reproduced or distributed, stored in a retrieval
system, used in a spreadsheet, or transmitted in any form or medium – electronic,
mechanical, photocopying, recording, or otherwise – without the permission of IBSCDC. |
