Why Every Organization Needs an Augmented Reality Strategy

Michael E. Porter; James E. Heppelmann

Article | Harvard Business Review

Why Every Organization Needs an Augmented Reality Strategy

by Michael E. Porter and James E. Heppelmann

Abstract

While the physical world is three-dimensional, most data is trapped on two-dimensional pages and screens. This gulf between the real and digital worlds prevents us from fully exploiting the volumes of information now available to us. Augmented reality (AR), a set of technologies that superimposes digital data and images on physical objects and environments, is closing this gap. By putting information directly into the context in which we’ll apply it, AR increases our ability to absorb and act on it. AR will become the new interface between humans and machines, say Michael E. Porter of Harvard and James E. Heppelmann, the CEO of the industrial software maker PTC. Many people are familiar with AR entertainment applications, such as Snapchat filters, but AR is being applied in far more consequential ways in business. Pioneering organizations are already implementing it in product development, manufacturing, logistics, marketing, service, and training—and are seeing major gains in quality and productivity. AR improves how users visualize information, receive and follow instructions, and interact with products. AccuVein, for instance, uses AR technology that converts the heat signature of a patient’s veins into an image superimposed on the skin, making them much easier to locate. Boeing uses AR to show trainees how to assemble an aircraft wing—and has cut the time it takes them to do that task by 35%. At GE, factory workers have achieved a similar gain in efficiency by using voice commands in AR experiences to perform complex wiring. AR will have a wide impact on how companies compete. This article walks readers through the questions firms need to ask when integrating it into their strategies and operations. The article also includes HBR’s first embedded AR experiences, which readers can launch by downloading a new HBR app on their mobile devices and then pointing them at targeted images in the magazine’s pages.

Keywords: Technological Innovation; Innovation Strategy; Organizational Change and Adaptation; Performance Effectiveness;

Format: Print

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Citation:

Porter, Michael E., and James E. Heppelmann. "Why Every Organization Needs an Augmented Reality Strategy." Harvard Business Review 95, no. 6 (November–December 2017): 46–57.

In 2006 Harvard Business School’s Michael E. Porter and Nitin Nohria launched a study tracking how large companies’ CEOs spent their time, 24/7, for 13 weeks: where they were, with whom, what they did, and what they were focusing on. To date, Porter and Nohria have gathered 60,000 hours' worth of data on 27 executives, interviewing them—and hundreds of other CEOs—about their schedules. This article presents the findings, offering insights not only into best time-management practices but into the CEO’s role itself. CEOs need to learn to simultaneously manage the seemingly contradictory dualities of the job: integrating direct decision-making with indirect levers like strategy and culture, balancing internal and external constituencies, proactively pursuing an agenda while reacting to unfolding events, exercising leverage while being mindful of constraints, focusing on the tangible impact of actions while recognizing their symbolic significance and combining formal power with legitimacy.

Medtronic is adapting its strategy to changes in health care competition and payments. It has decided to develop new relationships with payers, hospitals, and physicians to become more accountable for patient outcomes and total costs. The case describes new forms of partnerships for therapy optimization, management of acute care episodes, and management of chronic care patients. The case also illustrates how integrated practice units (IPUs) provide focused, comprehensive care for two high-volume and expensive medical conditions: type-1 diabetes and morbid obesity.

Case | HBS Case Collection | February 2009 (Revised May 2018)

Cleveland Clinic: Transformation and Growth 2015

Michael E. Porter and Elizabeth O. Teisberg

The Cleveland Clinic's health care services are internationally renowned for quality. In 2008, The Clinic began to restructure the organization into teams defined around patient needs, rather than traditional medical specialties. "Patients First!" takes shape as the teams measure and report outcomes, coordinate care, and develop to support improving value for patients. In addition to restructuring care delivery in the hospitals and throughout northeastern Ohio, The Clinic has investments, facilities, and staff in several other states in the U.S. as well as in Canada and Abu Dhabi. Now in 2015, as the Clinic's domestic and international footprint continues to expand, its leadership is also focused in maintaining the Cleveland Clinic brand and providing optimal clinical care. Students can explore strategy transformation, geographic expansion, the process of introducing new measurement approaches, alignment of activities with strategic goals, and issues in leading change both within a company and across an economic sector.

Keywords: health; health care operations; health care quality; health care; strategy and leadership; strategy development; Health Care and Treatment; Leading Change; Goals and Objectives; Growth and Development Strategy; Measurement and Metrics; Service Delivery; Organizational Change and Adaptation; Outcome or Result; Health Industry; Cleveland;

Citation:

Porter, Michael E., and Elizabeth O. Teisberg. "Cleveland Clinic: Transformation and Growth 2015." Harvard Business School Case 709-473, February 2009. (Revised May 2018.) View Details

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Why Every Organization Needs an Augmented Reality Strategy

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