Opportunity at the Interface Part 2 - Competitive Advantages
Today I am going to go a little bit deeper on interfaces looking at some more applied aspects we are all familiar with and one example my fellow life sciences veterans will be familiar with.
Let’s explore a real-world situation of and interface in our daily lives and how it scales: our roads and automobile-based transportation. The primary interface needing management is the drivers with one another, but certainly not the only one.
1. Rural gravel roads
a. In a very rural setting (like where I grew up in the near north in Manitoba), gravel roads with very low numbers of drivers is the primary road type. The actual structures and rules needed to keep drivers safe from each other are minimal, mostly stop signs at intersections and speed limits which in reality are not enforced.
2. Paved rural roads
a. We are now in a more densely populated areas(like rural southern Ontario). Speeds increase, there are more vehicles on the road, and we have various lines on the roads to delineate where passing is permissible. Speed limits are enforced by police. We start to see basic traffic lights at major intersections or where roads intersect with other major roads.
3. Urban and Major Highways
a. Speeds increase more and we are into congested traffic conditions. There are specialized types of roadways from high capacity urban roads to freeways. There is far more law enforcement presence and enforcement. Collision reporting centers exist to handle when there are “problems” with the driver to driver interface. Specialized multi-signal traffic lights come into play. Specialized turning lanes. Pedestrian signals to govern crossing and the management of the driver – pedestrian interface. Bike lanes. A lot more rules are at play.
The point is that when the interfaces become more numerous and more complicated, additional structure is needed so that efficient flow of traffic can be maintained safely. The efficient movement of people and goods is the output of the successful management of these interfaces. Anyone who has lived or travelled to third world countries that lack the set of rules and enforcement we have in fully developed countries can attest to the nightmare that basic navigation in these urban areas is. The creation of the rules and infrastructure systems we have in place required leadership. These systems evolved over generations. The nature of a well managed interface is not static. The maintenance and improvement of these interface management systems are arguably a competitive advantage to our economy requires ongoing leadership.
The level of effort applied in managing the interface should be commensurate with the level of risk of negative outcomes, but also to the level of opportunity to create value.
I think the same is true at an organizational level. A not so new paradigm is becoming more common: contract manufacturing. This has enabled the creation of companies that have an idea for a product, and by using contract manufacturing organizations (CMO’s) the barriers to entry have been reduced; arguably a good thing. There is no longer a need to raise potentially massive amounts of capital to build their own manufacturing facility. What is needed on the part of these “idea” companies AND from the contract manufacturing organizations (CMO) is exceptional skill at interface management. The most basic part is technology transfer, but it is much more than just tech transfer. The CMO’s that excel at managing these interfaces have a competitive advantage over CMO’s that are not as capable at interface management. Some CMO’s even expand their service offerings to taking on management of other interfaces on behalf of the idea companies and are actually CDMO’s, contract development and manufacturing organizations. It should go without saying, but I’ll say it anyways: the CMO has a primary core competency in manufacturing. What I am arguing here is that there is another core competency that is needed at interface management.
I can’t help but point out a chemistry analogy: through the skillful management of these interfaces the activation energy needed (ie: barrier to entry) to getting an idea to market is reduced by the CMO paradigm that actually introduces a seemingly unnecessary interface. There is opportunity that is created in this interface and it can actually function as a form of catalyst! Value is created by virtue of this interface being well structured, managed and led.
In the next newsletter I will keep beating on this drum taking a deeper look at outsourcing through this lens of interfaces, the characteristics needed in interface leaders, and HR implications.
In closing, I wish you all a happy, healthy and prosperous 2026, and I have a challenge for you: what interfaces are you responsible for that you can make work better? There is probably some low hanging fruit.
With gratitude for your readership and thoughts,
Nik