The Richard Beckhard Memorial Prize

The Winners:

Stoyan V. Sgourev
MIT Sloan School of Management

Ezra W. Zuckerman
MIT Sloan School of Management

Authors of:
Improving Capabilities Through Industry Peer Networks

This year’s winning article highlights an intriguing way in which managers at smaller regional companies in the United States can improve their ability to stay abreast of industry trends: with the help of networks of noncompeting peers from other geographic areas. The authors call these networks industry peer networks. While trade associations are the best-known venue for interaction between companies in the same industry, industry peer networks comprise small groups of noncompeting peers who gather regularly, in an atmosphere of significant intimacy and trust, to exchange information and discuss matters of company performance.

The authors identify five key practices and characteristics of industry peer networks, including membership by multiple groups of noncompeting peers, selective admission, face-to-face group meetings, detailed discussion of management issues, and sharing of financial data. Participation in groups that follow these practices will help companies overcome two major problems with smaller regional companies — myopic business practices and inertia. Sgourev and Zuckerman continue their research to show potential pitfalls to avoid when joining an industry peer network and other forms of potentially valuable peer networking.

The judges felt that this year’s article was particularly in line with Dick Beckhard’s goal of helping organizations change and grow. Prof. Eleanor Westney said, “Sgourev and Zuckerman provide a valuable counterpoint to the widespread emphasis on competitor benchmarking with their research on how companies learn from structured interactions across noncompeting peer firms. Their extensive data collection and analyses provide a strong foundation for understanding and building learning networks across firms. They show how small groups of companies, primarily in the service and retail sectors, can share data and management knowhow to overcome the myopia and inertia that are the major barriers to learning and change.”

This year’s panel included distinguished members of the MIT Sloan School of Management Faculty: Erwin H. Schell Professor of Organization Studies John Van Maanan, and Society of Sloan Fellows Professor of International Management D. Eleanor Westney.

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